Harris Corp. (HRS) reported blockbuster fourth quarter results yesterday. Total revenues of $1.29 billion were up 4% year over year and well above the Zacks Consensus Estimate of $1.21 billion. Quarterly net loss from continuing operations was $83.5 million or a loss of 64 cents per share, compared to a net income of $134.5 million or an income of 99 cents per share in the previous quarter. However, adjusted EPS (excluding non-cash special charges), in the same quarter was 91 cents, significantly exceeding the Zacks Consensus Estimate of 83 cents.
During the fourth quarter, cost of sales was $888.5 million, compared to $831.1 million in the prior-year quarter. Engineering, selling, & administrative expenses were $212.6 million, compared to $206.4 million in the year-ago quarter. For fiscal 2009, Harris generated $666.8 million of cash from operations, compared to $555.5 million in the prior fiscal year. Free cash flow (cash flow from operations less capital expenditures) during fiscal 2009 was $545 million, compared to $409.3 million in the previous fiscal year. At the end of fiscal 2009, the company had $284.5 million of cash & marketable securities and $1.28 billion of total outstanding debt on its balance sheet.
Harris reported that it booked $1.29 billion of new orders during the fourth quarter, an improvement of 22% over the previous quarter. Importantly, order generation has rebounded sequentially in all the three reporting segments of Harris. Management provided its fiscal 2010 revenue guidance in the range of $5 billion to $5.1 billion. This is better than the Zacks Consensus Estimate of $4.95 billion. Non-GAAP EPS is expected to be within the range of $3.40 to $3.50, far exceeding the Zacks Consensus Estimate of $3.20.
RF Communications Segment
Fourth quarter revenues were $468 million, compared to $441 million in the prior-year quarter. International revenue increased significantly for tactical radio products. Operating income was $144 million, compared to $149 million in the year-ago quarter. In the reported quarter, Harris generated $441 million of new orders, compared to $405 million in the prior-year quarter and a mere $292 million in the previous quarter.
Throughout the first three quarters of fiscal 2009, this segment suffered from lack of demand. On a positive note, the company again generated a solid order for its flagship Falcon II and Falcon III multi-band radios.
Government Communications System Segment
Quarterly revenue of $704 million was far better than $641 million in the prior-year quarter. Revenue growth was driven by a broad base of U.S. government programs including the Field Data Collection Automation program for the U.S. Census Bureau. Operating income was $80 million, compared to $74 million in the year-ago quarter. During the same quarter, this segment received two massive long-term contracts with a combined potential value of over $1.3 billion.
Broadcast Communications Segment
This segment generated $130 million of quarterly revenue, compared to $174 million in the prior-year quarter. Sales declined across all the product lines in both the international and U.S. markets. Quarterly operating loss was $2 million, compared to an operating income of $8 million in the year-ago quarter. In the reported quarter, new order generation was $127 million, compared to $179 million in the prior-year period.
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