Government Communications Systems
Revenue in the second quarter for the Government Communications Systems segment was $439 million, a 4 percent increase compared with $422 million in the prior year. Year-over-year increases in revenue from the GOES-R weather program, the Space Network Ground Segment Sustainment (SGSS) program, and various classified programs were partially offset by continued lower spending by Department of Defense customers. Operating income was $66 million compared with $63 million in the prior year. Operating margin was strong at 14.9 percent.
During the quarter, Harris received awards totaling $242 million from several classified customers. Harris was also one of twenty prime contractors selected to compete for work under the 5-year, $10 billion Global Tactical Advanced Communication Systems (GTACS) IDIQ contract.
Discontinued OperationsHarris entered into a definitive asset sale agreement with Gores Broadcast Solutions, Inc., an affiliate of The Gores Group, LLC, relating to the sale of Broadcast Communications, which the company expects to complete in early calendar year 2013. As a result, Harris recorded an additional non-cash impairment charge of $98 million in discontinued operations. Earnings Guidance Due to expected slower government spending resulting from growing budget uncertainty, Harris has updated its fiscal 2013 guidance for income from continuing operations from a range of $5.10 to $5.30 per share to a range of $5.00 to $5.20 per share. Revenue is now expected to decline 2 to 4 percent compared to the prior year. Harris will host a conference call today, January 29, at 8:30 a.m. Eastern Time (ET) to discuss its second quarter fiscal 2013 financial results. The dial-in numbers for the teleconference are (866) 700-0161 (U.S.) and (617) 213-8832 (International), using participant code 73824622. Please allow at least 10 minutes before the scheduled start time to connect to the teleconference. Participants may listen to the call and view management’s supporting slide presentation at www.harris.com/conference-call. A recording of the call will be available on the Harris website beginning at 12 p.m. ET on January 29. About Harris Corporation Harris is an international communications and information technology company serving government and commercial markets in more than 125 countries. Headquartered in Melbourne, Florida, the company has approximately $5.5 billion of annual revenue and about 15,000 employees — including 6,000 engineers and scientists. Harris is dedicated to developing best-in-class assured communications ® products, systems and services. Additional information about Harris Corporation is available at www.harris.com. Non-GAAP Financial Measures This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the SEC, including income from continuing operations and income from continuing operations per diluted share for the second quarter of fiscal 2012, excluding charges for acquisition-related costs; and operating income for the Integrated Network Solutions segment for the second quarter of fiscal 2012, excluding charges for acquisition-related costs. Harris management believes that these non-GAAP financial measures, when considered together with the GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period. Management also believes that these non-GAAP financial measures enhance the ability of investors to analyze Harris business trends and to understand Harris performance. In addition, Harris may utilize non-GAAP financial measures as a guide in its forecasting, budgeting and long-term planning process and to measure operating performance for some management compensation purposes. Any analysis of non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP.