Harris Corp. is exploring “strategic options, which may lead to its eventual sale,” according to a report from The Wall Street Journal. Potential buyers listed included some of the big defense contractors—Raytheon, BAE Systems and Northrup Gruman.
Harris is one of the biggest vendors in the broadcast arena, but defense and government contracting is the cash cow, hence the aforementioned suitors. In its most recently completed quarter ending March 28, the two Harris contracting divisions--Defense Communications and Electronics and Government Communications Systems--logged more than $1 billion in revenue. Broadcast Communications generated $159 million by comparison.
Overall revenues were up 24 percent for the quarter to $1.33 billion compared to the same quarter a year ago, but net profits fell nearly 50 percent, from $215 million last year to $108 million this year. The drop was due in part to a previously announced $47 million charge for cost overruns on “several commercial satellite reflector programs,” the company said in its earnings release.
Shares of Harris climbed 10 percent in overnight trading following news of the potential sale to more than $60 a share an hour before the opening bell, up from $54.41 at market close Thursday night.
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