This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Harris' CEO Discusses Q3 2012 Results - Earnings Call Transcript

And before we get started, a few words about forward-looking statements. In the course of this teleconference, management may make forward-looking statements. Forward-looking statements involve assumptions, risk and uncertainties that could cause actual results to differ materially from those statements. For more information and a discussion of such assumptions, risks and uncertainties, please see the press release and filings made by Harris with the SEC.

In addition, in our press release and on this teleconference and the related presentation, we will discuss certain financial measures and information that are non-GAAP financial measures. A reconciliation to the comparable GAAP measures is included in tables of our press release and on the Investor Relations section of our website, which is A replay of this call will also be available on the Investor Relations section of our website.

And with that, Bill, I turn the call over to you.

William M. Brown

Thank you, Pam, and welcome to our Third Quarter Fiscal 2012 Earnings Call. I'll quickly review some of the highlights of our third quarter results, turn it over to Gary to walk through the details of the financials and then come back to you with a few comments before opening the call to questions.

Turning to Slide 3 and 4 in the presentation. Harris posted solid third quarter results with orders, revenue and non-GAAP earnings all higher compared to prior year. Revenue increased 4% to $1.48 billion and book-to-bill was greater than 1. Non-GAAP EPS of $1.39 increased 18% over the prior year and was driven by operating income growth at RF and government communications, nonrecurring royalty income and a lower share count from first quarter repurchases.

In the last call, I say we are going to be conservative on cash deployment with a focus on rewarding shareholders. We resolved a significant financial drag from the cyber hosting facility, and completed a thorough review of our business portfolio, and we've made good progress on all 3 fronts. The company continues to generate strong free cash flow and at the end of February, we increased our dividend by 18% and raised our target payout ratio from 20% to 25%. We also announced in the third quarter that we are exiting the underutilized cyber hosting facility, and the process to divest the assets is progressing quickly. Our business portfolio review was well underway and today, we're announcing the decision to divest Broadcast Communications, which we believe is no longer aligned with the company's long-term strategy. The combination of a lack of effective integration by the company over the last decade, coupled with the market outlook that is not as promising today as once believed, led us to conclude that the best -- that the business is best owned by another party. Although broadcast is no longer core to our company, we believe the business has the potential for strong growth and margin expansion, is led by a solid leadership team and has long-term value for someone who brings a focused approach to the broadcast and media market. It's our intention to use the proceeds to return cash to shareholders and invest in growing our core businesses.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 16,776.43 +304.06 1.85%
S&P 500 1,987.05 +35.69 1.83%
NASDAQ 4,781.2640 +73.4890 1.56%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs