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RF posts drop in Q3 sales, operating income

Rochester Business Journal
April 30, 2013

Harris Corp. reported Tuesday that its Rochester-based RF Communications segment had a drop in third-quarter sales and operating income, a month after the company said delays in radio orders would hurt its results and lead to local job cuts.

Operating income for the RF Communications segment was $116 million compared with $182 million a year ago.

RF Communications logged revenue of $418 million, compared with sales of $538 million a year ago. Tactical Communications revenue was $276 million, declining 31 percent, while Public Safety revenue was $142 million, increasing 2 percent.

Orders for the RF Communications segment totaled $486 million, with $297 million in Tactical Communications and $189 million in Public Safety. At the end of the third quarter, backlog was $582 million in Tactical Communications and $619 million in Public Safety.

Last month, Florida-based Harris released preliminary third-quarter financial results and revised full-year estimates that were lower than the firm expected and due largely to delays in radio orders from the U. S. government and the increased likelihood key international tactical radio orders will be awarded later than expected.

As a result, Harris announced companywide restructuring moves, includes cutting 150 to 180 local positions this month. The measures are expected to generate annual savings of some $40 million to $50 million, Harris said.

RF Communications employs some 2,200 in the Rochester area.

Harris on Tuesday reported third-quarter net income of $125 million, or $1.12 a share, compared with a profit of $155 million, or $1.38 a share, a year ago. Revenue of $1.2 billion was down from $1.37 billion.

William Brown, president and CEO, said the results were in-line with the company’s revised estimates.

“U.S. government funding constraints resulting from the continuing resolution were magnified when sequestration was triggered,” Brown said in a statement. “Additionally, in the international market several key tactical radio orders have been pushed to later in the year or early next fiscal year.”

(c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail service@rbj.net.


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