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Harris Broadcast Fiscal 1Q Revenues Down 25 Percent
10/28/2009

MELBOURNE, FLA: The Harris Broadcast division generated $119 million in revenues for the company’s first fiscal 2010 quarter, ending Oct. 2, 2009. The total was down from $158 million during the same period a year ago, and $130 million in 4Q09.

“Continued weakness in the first quarter was expected and reflects the global economy and delayed capital spending by broadcast and media customers, as well as seasonally slow spending, primarily in Europe and the Middle East,” Harris said in its earnings announcement.

Orders for 1Q10 totaled $124 million, about even with 4Q09. Operating income was $300,000 and was “achieved on substantially lower revenue as a result of significant cost-reduction actions implemented during fiscal 2009.”

Harris said key program wins in the quarter included transmitters for DTV networks in Rwanda and Mexico; Harris ONE systems for the Meredith Corp. centralcasting hub in Phoenix and the Home Shopping Channel in South Korea; and multiple orders for China Central Television. Harris also scored a contract from Lockheed Martin to provide video systems for the U.S. Joint Forces Command. The system will use Harris’s proprietary Full-Motion Video Asset Management Engine to sort through files collected from aerial and ground-based surveillance operations.

Combined revenues for Harris (NYSE:HRS) were $1.2 billion, compared with $1.17 billion for the first quarter of fiscal 2009. Net income was $105 million, or 79 cents a diluted share, compared with $119 million, or 89 cents per diluted share a year ago.

Excluding acquisition-related charges, non-GAAP income from continuing operations in was $109 million, or 83 cents per diluted share. New orders totaled $1.5 billion.

The company increased its guidance for full-year, fiscal 2010 results “to reflect much higher than expected tactical radio orders from the U.S. Department of Defense and the positive impact on expected revenue and earnings, said Howard L. Lance, chairman, president and CEO of Harris.

Harris now expects non-GAAP income from continuing operations for FY2010 to a range of $3.85 to $3.95 per diluted share (GAAP $3.74 to $3.84), compared with a previous range of $3.40 to $3.50 per diluted share (GAAP $3.25 to $3.40). Revenue in fiscal 2010 is now expected to be in a range of $5.1 billion to $5.2 billion. Fiscal 2010 non-GAAP earnings guidance excludes acquisition-related costs.

Harris finished the quarter with $231 million in cash and equivalents and $1.2 billion in long-term debt. Shares of Harris jumped 10 percent on the earnings news, from closing yesterday at around $38 to trading at $41.75 mid-day today.

More TVB coverage of Harris results:
August 13, 2009: “Harris Beats the Street
Harris finished its fourth fiscal quarter with a loss of $156.4 million, but the stock price jumped on adjusted earnings.

June 1, 2009: Harris Plans for Broadcast Segment Impairment
As of the fiscal third quarter ended April 3, 2009, the book value of the goodwill and other intangible assets in the Broadcast Communications segment was $928 million. Harris expects to record a $250 million to $275 million non-cash charge in fiscal 4Q09.

May 5, 2009: Harris Broadcast Revenue Drops in Q3
“The impact of lower revenue on operating performance in the third quarter was mitigated by on-going cost-reduction actions.”

February 5, 2009: Harris Broadcast Revenue is Flat in 2Q
Order momentum “slowed significantly in the U.S. market during the first half of fiscal 2009 and is expected to remain weak during the next several quarters.” 
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