Shares of Harris Corp. stock on Wednesday spiked more 7 percent following the company’s report of record third-quarter earnings and double-digit revenue growth. In heavy-volume trading, Harris stock set a new 52-week high of $181.22.
For the third quarter ended March 29, Harris posted revenue of $1.7 billion, up 11 percent from $1.6 billion in the year-ago quarter. Net income for the quarter increased 24 percent to $243 million. GAAP earnings per diluted share were $2.02 for the quarter, topping Street estimates.
Analysts surveyed by Zacks Investment Research had expected earnings of $2.04 per share.
“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,” Harris Chairman, President and CEO William Brown said in a statement. “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.”
Harris’ Communication Systems grew revenue 19 percent to $568 million in the quarter. Operating income increased 19 percent to $172 million. The company’s Space and Intelligence Systems division posted sales of $514 million, up 7 percent from the same quarter last year. Operating income increased 5 percent to $87 million.
Some 3,600 of Harris’ 17,000 staffers are employed at five locations in Rochester, which includes its Communication Systems and Space and Intelligence Systems divisions.
Harris has been awarded a number of high-value contracts in recent months that include a $75 million order from the U.S. Marine Corps for upgrades to its Falcon III manpack radios, manufactured in Rochester; $195.9 million for the manufacture of critical components in the Wide Field Infrared Survey Telescope, or WFIRST; and a $3.9 billion contract for more than 1,500 of its most advanced two-channel handheld radios. That contract is split between Harris and another vendor.
In April, Harris and L3 Technologies Inc. received shareholder approval for a “merger of equals,” announced last October. The combined, $36 billion company will be known as L3 Harris Technologies Inc. and will be the sixth largest defense company in the U.S., as well as a top 10 defense company globally.
The company will be headquartered in Melbourne, Fla., where Harris has its headquarters. L3, which develops advanced defense technologies and commercial solutions in pilot training, aviation security, night vision and more, has roughly 31,000 employees worldwide.
The merger is expected to close midyear 2019, subject to regulatory approvals.