A leading supplier of communications equipment and services, Harris Corp. (HRS) recently won a contract worth $9.6 million from the U.S. Department of Veterans Affairs (VA) to improve the financial and administrative legacy systems within the Veterans Health Administration
Harris will deliver and support the VA department for a period of 5 years, thus creating an opportunity for the company in healthcare business.
VA provides delivery of patients to more than 150 hospitals and the partnership with Harris will facilitate improved service across six core categories including X12, Fee Basis Purchased Care, Credentialing and Privileging Enhancements (CAPE), ICD-10 Encounter Forms, Occupational Health & Safety Management Information System (OHSMIS) and Revenue Operations.
Recently, Harris CapRock Communications, which is a global provider of mission-critical managed satellite communications solutions for the energy, government, and maritime industries, won a contract from Farstad Shipping to supply Very Small Aperture Terminal (VSAT) for its 53 fleets.
Harris remains the leader in the public safety and professional communication market and boasts products ranging from IP voice and data networks, industry leading multi-band, multi-mode radios, public safety-grade broadband voice, video and data solutions that support 500 systems globally. Recently, the company declared its fourth quarter 2011 financial results, where both revenue and earnings per share (EPS) surpassed the Zacks Consensus Estimates.
Accretive share repurchase plan and recent dividend hikes will act as positive catalysts for the stock going forward. Moreover, continuous contract wins and huge order back logs are expected to support future growth.
However, the company remains exposed to stiff competition from companies like Boeing Co. (BA), General Dynamics Corp. (GD) and Raytheon Co. (RTN), which also provide high-end public safety communication systems.
We, thus, maintain our long-term Neutral recommendation for Harris Corporation. Currently, Harris Corporation has a Zacks #3 Rank, implying a short-term Hold rating on the stock.
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