Harris Corp (HRS)

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Harris Revenue Declines Across All Business Units -- Update

May 05, 2015 09:34:00 (ET)

By Doug Cameron And Chelsey Dulaney
Harris Corp. said Tuesday it expected to win antitrust approval for its planned acquisition of Exelis Inc. without having to make any asset disposals, and said the $4.6 billion deal is still slated to close in June.

The remaining stumbling block in talks with the Justice Department is its ownership of intellectual property related to a planned Army radio upgrade that it was confident of resolving, Chief Executive Bill Brown said on a post-earnings call.

"We don't believe it will require any divestiture of assets," Mr. Brown said as the aerospace and defense company reported forecast-beating fiscal third quarter profits. Harris has received a second request for information from the Justice Department over the Exelis deal.

Harris has secured some big Pentagon radio contracts this year, notably the $3.9 billion Rifleman deal announced last week. It is also competing for a larger award in the second half, though Mr. Brown said it was too soon to call a bottom for the military radio market.

The company's commercial business has been hit by the slowdown in energy markets that has reduced demand from oil and gas companies. Mr. Brown said this would weigh on sales, though it was transferring some available spectrum to alternative markets such as cruise-line operators, where demand for Internet services is soaring.

Harris retained its full-year guidance, though the dip in energy markets and Pentagon budget pressures reduced revenue by 6.4% in the latest quarter from a year ago,

For its fiscal third quarter ended April 3, Harris reported a profit of $125.7 million, or $1.20 a share, down from $141.4 million, or $1.31 a share, a year ago. Excluding acquisition costs, per-share earnings were $1.32.

Revenue in Harris's communications business fell 1.4%, and revenue in the government communications systems business declined 4.5%. Revenue in its integrated networks solutions business was off 14%.

Orders in the quarter were $1.21 billion, up from $1.11 billion a year earlier.

Write to Doug Cameron at [e-mail] and Chelsey Dulaney at [e-mail]


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(END) Dow Jones Newswires

May 05, 2015 09:34 ET (13:34 GMT)


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