Defense Contractor Harris Corp. Beats on Earnings
Melbourne, Fla.-based Harris Corp. shares were rising in early Tuesday trading, following a fiscal Q1 2014 earnings report this morning that showed the defense contractor beat earnings estimates handily, despite experiencing weaker-than-expected revenues.
Revenues of $1.19 billion fell short of the anticipated $1.22 billion, but earnings per share from continuing operations of $1.18 exceeded analyst estimates by a nickel. Meanwhile, the company performed well on two other metrics: free cash flow and new orders booked to replenish revenues from work performed in the quarter.
Free cash flow -- cash profits -- at Harris amounted to $139 million, or 109% of reported income under generally accepted accounting principles (GAAP). The company took in $1.2 billion in new orders in the fiscal first quarter, replacing all revenues booked, and then some.
This performance, while subpar by some analyst estimates, nonetheless encouraged management to reiterate its guidance for the rest of this year. The defense contractor expects revenues to decline 1% to 3% year over year, but earnings from continuing operations to range from $4.65 to $4.85 per share, roughly in line with the rate at which earnings accrued in Q1.
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