Harris Corp. (HRS) Tops Q2 EPS by 5c, Revenues Beat; Raises FY19 EPS/Revenue Guidance Above Consensus

Harris Corp. (NYSE: HRS) reported Q2 EPS of $1.96, $0.05 better than the analyst estimate of $1.91. Revenue for the quarter came in at $1.67 billion versus the consensus estimate of $1.64 billion.

• 2Q19 revenue up 9% to $1.7 billion; orders up 27%; book-to-bill of 1.06
• 2Q19 GAAP EPS from continuing operations up 74% to $1.88; non-GAAP1 up 19% to $1.96
• 1H19 revenue up 9% to $3.2 billion; GAAP EPS from continuing operations up 50% to $3.66; non-GAAP1 up 24% to $3.74
• 1H19 operating cash flow up 26% to $469 million; adjusted free cash flow1 up 24% to $409 million
• Increased revenue, non-GAAP EPS1 and adjusted free cash flow1 guidance for fiscal 2019

"We delivered the third straight quarter of high single-digit revenue growth and generated record EPS with strong margin expansion across all three segments," said William M. Brown, chairman, president and chief executive officer. "First half revenue growth of 9%, book-to-bill of 1.17 and margin expansion of 90 bps give us confidence to increase our revenue and EPS guidance for the second time this fiscal year."

"Integration planning for the merger with L3 is progressing well, with the integration team fully staffed and developing detailed plans to deliver $500 million of cost synergies and ensure seamless operations post close. We continue to expect the transaction to close in mid-2019."

GUIDANCE:

Harris Corp. sees FY2019 EPS of $7.90-$8.00, versus the consensus of $7.90. Harris Corp. sees FY2019 revenue of $6.66-6.69 billion, versus the consensus of $6.64 billion.

• Revenue in a range of $6.66 - 6.69 billion, up 8.0 - 8.5% from fiscal 2018 (increased from previous guidance of up 6 - 8%)
• GAAP EPS from continuing operations in a range of $7.50 - $7.60 and non-GAAP5 EPS in a range of $7.90 - $8.00 (compared with previous guidance of $7.80 - $7.90)
• Adjusted free cash flow5 in a range of $1.000 - $1.025 billion (increased from previous guidance of ≥ $1 billion)

For earnings history and earnings-related data on Harris Corp. (HRS) click here.

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