Harris Corporation (HRS), a leading supplier of communication equipments and services, recently bought essential infrastructural assets of the government business of Core180, Inc. It includes 50 highly skilled terrestrial networking experts based in Core180’s New York and Washington, DC-area offices, along with a 24×7 Network Operations Center for monitoring its extensive terrestrial infrastructure. These assets will be integrated into Harris CapRock Communications.
Fairfax, Virginia-based Core180, Inc provides telecom and management-related services to government organizations, large enterprises, telecom carriers and system integrators.
The acquired assets will enable Harris to provide better communication network facilities to its government agencies and other non-government agencies, thereby expanding its terrestrial network infrastructure.
The acquisition of Core180’s service platform will provide the clients with more network options at lower costs.
Harris Corp. reported an excellent second quarter 2011 financial results with revenue increasing 18.1% year over year. Total orders generated during the quarter were $1.41 billion. In the ensuing third quarter of fiscal 2011, Harris has already won various contracts totaling roughly $1 billion, thereby showing strong signs of growth.
With huge cash availability, the company is focusing on inorganic growth. Presently, it has shown its interest to buy Carefx Corporation, a leading provider of interoperability workflow solutions.
The acquisition will give Harris a strong foothold in the commercial healthcare market. It has also bought Malibu Media Platform, an online media exchange that facilitates buying and selling of TV advertisements.
Harris operates in a highly competitive communication equipment industry and faces intense competition from Boeing Co. (BA), General Dynamics Corp. (GD) and Raytheon Co. (RTN).
We thus maintain our long-term Neutral recommendation forHarris Corporation. Currently, Harris Corporation has a Zacks #3 Rank, implying a short-term Hold rating on the stock.
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