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Harris Corporation retreats after reporting weaker than expected revenue

Harris Corporation (HRS), which develops radio communication products, reported Q2 EPS of $1.06 ex-acquisition costs compared with analysts' consensus estimate of 95c. Including all items, the company's EPS was $1.08. However, Harris' revenue came in at $1.22B, versus the consensus of $1.30B, but the company increased its FY10 EPS guidance to $4.25-$4.35 from $3.85-$3.95. Analysts' consensus estimate was $3.91. "Demand for the market's most advanced tactical radios resulted in significantly higher new orders," said Harris Corporation CEO Howard Lance. In a note to investors, Morgan Joseph analysts Michael French and James Moore responded to Harris' results by raising their targets on the stock to $56 from $47. The analysts noted that Harris' RF Communications unit produced higher margins than they had expected, and they believe that the company's broadcast communications segment appears to be rebounding. The analysts reiterated their Buy rating on the stock. In mid-morning trading, Harris slumped $2.22, or 4.87%, to $44.46.