Harris Broadcast Posts Loss on Slightly Higher Revenues

MELBOURNE, FLA.: Harris Broadcast revenues rose during the company’s first fiscal quarter of 2011, but the division still posted an operating loss of $9 million. The division generated revenues of $122 million, up $3 million from a year ago and $11 million sequentially. Orders improved from $124 million in F1Q10 and $111 million in F4Q10 to $135 million for the most recent quarter.

The $9 million operating loss included a $1 million restructuring charge. Harris expects cost-cutting to generate a total charge of $5 million for the fiscal year.

“Results in the segment continue to reflect market weakness in the traditional U.S. broadcast capital spending market,” said Harris chairman, president and CEO, Howard Lance. “And also included are ongoing increased investments in sales and marketing to address new media and international growth opportunities. The 1:1 book-to-bill ratio in the quarter, along with year-over-year revenue growth are both encouraging signs for the segment.”

Harris Broadcast won an $8 million contract during the quarter from Nine Network Australia for a new play-out center that includes servers, multi-viewers, routers, digital asset management and automation software. Another $4 million deal was done with TPBS Thailand for Harris’s Integrated Broadcast Systems. Australia’s Network Seven ordered $2.5 million in end-to-end file-based play-out technology, and Saudi Television ordered $2.5 million in transmission and HD studio gear.

Harris Broadcast, along with Lockheed Martin, last year scored a $29 million defense contract to bring real-time video processing technology to the battlefield. Lance said Harris continued to ship systems for the so-called “Valiant Angel” program.

“But we also are developing and starting to ship lower-cost solutions in that space. So we're not totally dependent just on the Valiant Angel program,” he said. “There’s a lot of development going on in general, around providing enhanced ISR database access and retrieval, and both Broadcast, in partnership with our Government Systems division, are pursuing those opportunities.”

Harris Corp. reported consolidated revenue forF1Q11 of $1.41 billion, up 17 percent from a year earlier. Organic revenue growth was 10 percent after adjusting for acquisitions. GAAP net income was $164 million, or $1.27 per diluted share, compared to $105 million, or 79 cents a diluted share last year.

The company increased its forecast for full-year GAAP net income from $4.55 to $4.65 to $4.75 to $4.85 a diluted share. Full fiscal 2011 revenues are forecast to be between $5.9 billion and $6 billion.

Harris shares (NYSE: HRS) closed Monday at $44.83 and Tuesday at $45.83. Shares are down about 4 percent year-to-date.
-- Deborah D. McAdams