About a month has gone by since the last earnings report for Harris Corporation (HRS – Free Report) . Shares have added about 6.1% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Fourth Quarter Earnings
Harris Corp. reported fourth-quarter fiscal 2017 earnings (on an adjusted basis) of $1.49 per share, in line with the Zacks Consensus Estimate. Quarterly earnings improved on a year-over-year basis. Revenues in the quarter came in at $1,542 million, ahead of the Zacks Consensus Estimate of $1,510.9 million.
Cost of product sales and services in the reported quarter was $1,019 million, compared with $1,005 million in the prior-year quarter. Engineering, selling & administrative expenses totaled $248 million in the quarter under review compared with $278 million in the fourth quarter of fiscal 2016.
Revenues at the Communication Systems segment came in at $449 million in the quarter, up 3% on the back of increased sales of legacy international tactical radios. Segmental operating income improved to $146 million owing to higher revenues.
Revenues at the Space and Intelligence Systems unit were $506 million, down 4%. Results were hurt by lower revenues from environmental and space programs. Operating income for the segment was $80 million was flat year over year.
Revenues at the Electronic Systems unit totaled $591 million, up 4%. Segmental operating income was $104 million, down 12.60%.
At the end of fiscal 2017, the company had cash and cash equivalents of $484 million, compared with $487 million at the end of fiscal 2016. Total long-term debt at the end of fiscal year was $3,396 million compared with $4,120 million at the end of fiscal 2016.
The company now expects earnings per share (on an adjusted basis) for fiscal 2018 in the band of $5.85 to $6.05. The company projects fiscal 2018 revenue in the band of $6.02–$6.14 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
At this time, Harris’s stock has a nice Growth Score of B, though it is lagging a bit on the momentum front with a C. Following the exact same course, the stock was allocated also a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren’t focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for growth investors than those looking for value and momentum.
The stock has a Zacks Rank #4 (Sell). We are expecting a below average return from the stock in the next few months.