Harris Corp. HRS is slated to release second-quarter fiscal 2018 results on Jan 30, before the market opens.
In the last reported quarter, the company delivered a positive earnings surprise to the tune of 2.2%. Notably, Harris Corp.surpassed the Zacks Consensus Estimate for earnings in three of the last four quarters, with an average beat of approximately 2.8%.
Things look rosy for the company in the soon-to-be reported quarter as well. Its strong product portfolio is likely to boost results.
Let’s delve deep to find out the factors likely to have a bearing on the company’s fiscal second-quarter results.
We expect the company’s Space and Intelligence Systems unit to perform well in the to-be-reported quarter.Higher volumes, impressive program performance and operational efficiencies should drivesegmental results.
The Electronic Systems unit is also anticipated to perform well driven by the strength in electronic warfare, among others. Of late, the company has also won multiple contracts, which is likely to boost the top line further in the quarter.
Moreover, the company’s efforts to reduce its debt levels also raise optimism in the stock. We expect an update on the issue on the fiscal second-quarter conference call. Reduction in engineering, selling & administrative expenses are also expected to boost the bottom line.
However, the company’s Communication Systems segment might struggle in the quarter, due to reduced sales of legacy international tactical radios.
Harris Corporation Price and EPS Surprise
Harris Corporation Price and EPS Surprise | Harris Corporation Quote
What Does Our Model Indicate?
Our proven model too shows that Harris Corp. is likely to beat on earnings in the to-be-reported quarter because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase its odds of an earnings surprise.
Zacks ESP: Harris Corporation has an Earnings ESP of +0.11%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Harris Corporation carries a Zacks Rank #2 (Buy), which when combined with a positive ESP, makes us confident of an earnings beat.
Conversely, we caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Other Stocks to Consider
Harris Corp. is not the only company in the broader Computer and Technology sector that is looking up this earnings season. Here are some companies from the same space, which according to our model also have the right combination of elements to post an earnings beat:
AMTEK, Inc. AME has an Earnings ESP of +0.12% and a Zacks Rank of 2. The company will report fourth-quarter earnings numbers on Feb 1. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arrow Electronics, Inc. ARW has an Earnings ESP of +0.61% and a Zacks Rank #3. The company will report fourth-quarter earnings numbers on Feb 6.
Citrix Systems CTXS has an Earnings ESP of +0.52% and a Zacks Rank #3. The company will also report fourth-quarter earnings numbers on Jan 31.
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