Harris Corporation Reports Strong Fiscal 2019 First Quarter Results With Accelerated Revenue Growth Across All Segments

  • Revenue up 9% to $1.5 billion with a book-to-bill of 1.3
  • EPS from continuing operations up 31% to $1.78
  • Operating cash flow up 23% to $117 million; free cash flow 1 up 19% to $86 million
  • Increased fiscal 2019 EPS from continuing operations guidance to $7.80 - $7.90

MELBOURNE, Fla. — (BUSINESS WIRE) — October 14, 2018 — Harris Corporation (NYSE: HRS) reported fiscal 2019 first quarter revenue of $1.5 billion, up 9% compared with the prior year. Earnings per diluted share (EPS) from continuing operations increased 31% to $1.78. Net income increased 34% to $213 million and earnings before interest and taxes (EBIT2) increased 12% to $300 million.

"We are off to a strong start in fiscal 2019 with solid first quarter results and the highest revenue and EPS growth we have achieved in eight years," said William M. Brown, chairman, president and chief executive officer. "First quarter revenue and backlog were up in all segments and EBIT margin expanded 40 bps. We also increased our dividend by 20% and returned $282 million to shareholders through dividends and share repurchases. These results, combined with the recent approval of a well-funded budget, give us confidence to increase fiscal 2019 EPS guidance.

“Over the past few years, we have executed well against our strategic priorities, reshaping our portfolio to focus on technology differentiated businesses and returning to growth. The transformative merger of equals announced today will enable us to increase our scale, strengthen our core businesses and extend our position as a premier global defense technology company."

Summary Financial Results

               
($ millions, except per share data)     First Quarter
      FY 2019   FY 2018   Change
Book-to-bill     1.3     1.6     NM
Revenue     $ 1,542     $ 1,410     9%
               
(GAAP comparison)              
Net income     $ 213     $ 159     34%
Net income margin     13.8 %   11.3 %   250bps
Earnings per share     $ 1.78     $ 1.36     31%
               
(Non-GAAP comparison)              
EBIT3     $ 300     $ 269     12%
EBIT margin3     19.5 %   19.1 %   40bps
               
NM = Not meaningful              
               

First quarter revenue increased 9%, with solid growth across all three segments led by Communication Systems and Electronic Systems. EPS increased 31% from the benefit of higher volume, strong program execution and a lower share count and tax rate. EBIT margin3 expanded 40 bps to 19.5%. Book-to-bill remained strong at 1.3 resulting in a funded backlog increase of 14% year over year.

Communication Systems

               
($ millions)     First Quarter
      FY 2019   FY 2018   Change
Revenue     $ 469     $ 406     16%
Operating income     $ 140     $ 115     22%
Operating margin     29.9 %   28.3 %   160bps
                   

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