Will This Upgrade Help Harris (HRS) Stock Today?

NEW YORK (TheStreet) -- Harris Corporation (HRS) was upgraded to "perform" from "underperform" at Oppenheimer on Wednesday after the company reported its 2014 third quarter earnings and revenue increased over the same period last year.

Income from continuing operations during the third quarter was $137 million, or $1.27 per diluted share, compared to the $125 million, or $1.12 per diluted share from the third quarter 2013.

Harris reported revenue for the third quarter 2014 was $1.27 billion up from $1.20 billion in the year ago quarter.

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Separately, TheStreet Ratings team rates HARRIS CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate HARRIS CORP (HRS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, solid stock price performance, expanding profit margins, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 180.8% when compared to the same quarter one year prior, rising from $48.50 million to $136.20 million.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 65.53% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HRS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • 37.84% is the gross profit margin for HARRIS CORP which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, HRS's net profit margin of 11.13% significantly trails the industry average.
  • HARRIS CORP's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HARRIS CORP reported lower earnings of $4.16 versus $4.85 in the prior year. This year, the market expects an improvement in earnings ($4.90 versus $4.16).
  • HRS, with its decline in revenue, slightly underperformed the industry average of 3.9%. Since the same quarter one year prior, revenues slightly dropped by 4.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: HRS Ratings Report
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