Harris Corp. (HRS) Tops Q3 EPS by 7c, Revenues Beat; Raises FY19 EPS Above Consensus, FY19 Revenue Views Above Consensus, Boosts FY19 Adj. FCF Outlook

Harris Corp. (NYSE: HRS) reported Q3 EPS of $2.11, $0.07 better than the analyst estimate of $2.04. Revenue for the quarter came in at $1.73 billion versus the consensus estimate of $1.69 billion.

• 3Q19 revenue up 11% to $1.7 billion
• 3Q19 GAAP EPS from continuing operations up 24% to $2.02; non-GAAP1 up 30% to $2.11
• 3Q19 operating cash flow of $405 million; adjusted free cash flow2 of $379 million
• YTD19 revenue up 10% to $4.9 billion; GAAP EPS from continuing operations up 39% to $5.67; non-GAAP1 up 26% to $5.85
• YTD19 operating cash flow of $874 million; adjusted free cash flow2 up 75% to $788 million
• Increased revenue, EPS and adjusted free cash flow2 guidance for fiscal 2019

"We achieved double-digit EPS growth for the sixth consecutive quarter driven by our highest organic revenue growth and margin in the past eight years," said William M. Brown, chairman, president and chief executive officer. "These results, combined with another quarter of strong free cash flow, continue our exceptional year-to-date performance and position us well to deliver on increased revenue, EPS and free cash flow guidance for the year."

"Alongside strong operating results, integration planning continues to progress well with the teams developing detailed plans to deliver cost and revenue synergies. The shareholder approvals for the L3 Harris transaction and Harris signing a definitive agreement to divest the Night Vision business, reaffirm our confidence in closing the merger in mid-calendar 2019. This transformational merger, combined with a strong addressable budget, will drive continued growth and create long-term value for our shareholders."

GUIDANCE:

Harris Corp. sees FY2019 EPS of $8.15, versus the consensus of $8.00. Harris Corp. sees FY2019 revenue of $6.7 billion, versus the consensus of $6.69 billion.

• Revenue ~$6.72 billion, up ~9.0% from fiscal 2018 (increased from previous guidance of up 8.0 - 8.5%)
• GAAP EPS from continuing operations ~$7.80 and non-GAAP6 EPS ~$8.15 (increased from previous guidance of $7.50 - $7.60 GAAP and $7.90 - $8.00 non-GAAP6)
• Operating cash flow ~$1,160 billion; adjusted free cash flow5 ~$1.025 billion (increased from previous guidance of $1.000 - $1.025 billion)
• Tax rate of approximately 15.0% GAAP; 15.5% non-GAAP (a decrease from ~16.3% GAAP and ~16.5% non-GAAP previously)

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

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