Guidance
Harris narrowed its guidance for fiscal 2017 and now expects fiscal 2017 GAAP income from continuing operations of $5.20 to $5.25 per diluted share and non-GAAP income from continuing operations of $5.50 to $5.55 per diluted share, excluding Exelis acquisition-related and other charges. Previous guidance for fiscal 2017 GAAP income from continuing operations was $5.21 to $5.41 per diluted share and non-GAAP income from continuing operations was $5.40 to $5.60 per diluted share, excluding Exelis acquisition-related integration charges. Harris now expects fiscal 2017 revenue on an organic basis to be down about 1 percent from prior year, compared to previous guidance of flat to down 2 percent, excluding $60 million of prior-year revenue from the divested Aerostructures business. Harris still expects fiscal 2017 free cash flow to be about $800 million.
Harris will host a conference call today, May 3, at 8:30 a.m. Eastern Time (ET) to discuss its third quarter fiscal 2017 financial results. The dial-in numbers for the teleconference are (877) 303-9481 (U.S.) and (760) 666-3582 (International), using participant code 11469397. Please allow at least 10 minutes before the scheduled start time to connect to the teleconference. Participants are encouraged to listen via live webcast and view management’s supporting slide presentation at https://www.harris.com/investors/financial-reports. A recording of the call will be available on the Harris website beginning at approximately 12 p.m. ET on May 3.
About Harris Corporation
Harris Corporation is a leading technology innovator, solving customers’ toughest mission-critical challenges by providing solutions that connect, inform and protect. Harris supports government and commercial customers in more than 100 countries and has approximately $6 billion in annual revenue. The company is organized into three business segments: Communication Systems, Space and Intelligence Systems and Electronic Systems. Learn more at harris.com.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission (“SEC”), including income from continuing operations and income from continuing operations per diluted share for the third quarter of fiscal 2017 and the third quarter of fiscal 2016, in each case excluding Exelis acquisition-related and other charges; free cash flow for the third quarter of fiscal 2017, excluding cash flow for net capital expenditures; the revenue comparison for Harris and the Electronic Systems segment for the third quarter of fiscal 2017 on an organic basis, excluding revenue in the third quarter of fiscal 2016 attributable to the Aerostructures business divested in the fourth quarter of fiscal 2016; the guidance range for expected income from continuing operations per diluted share for fiscal 2017, excluding Exelis acquisition-related and other charges; the expected percentage change in revenue for Harris for fiscal 2017 on an organic basis, excluding revenue in fiscal 2016 attributable to the Aerostructures business divested in the fourth quarter of fiscal 2016; and expected free cash flow for fiscal 2017, excluding cash flow for net capital expenditures. A “non-GAAP financial measure” is generally defined as a numerical measure of a company’s historical or future performance that excludes or includes amounts, or is subject to adjustments, so as to be different from the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (“GAAP”). Harris management believes that these non-GAAP financial measures, when considered together with the GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period. Harris management also believes that these non-GAAP financial measures enhance the ability of investors to analyze Harris business trends and to understand Harris performance. In addition, Harris may utilize non-GAAP financial measures as guides in forecasting, budgeting and long-term planning processes and to measure operating performance for some management compensation purposes. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial measures presented in accordance with GAAP.
Attachments: Financial statements (7 tables)
Forward-Looking Statements
Statements in this press release that are not historical facts are
forward-looking statements that reflect management's current
expectations, assumptions and estimates of future performance and
economic conditions. Such statements are made in reliance on the safe
harbor provisions of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements in this release include but are not limited to: earnings,
revenue and free cash flow guidance for fiscal 2017; potential contract
opportunities and awards; the potential value of contract awards; the
anticipated uses of proceeds from divestitures; statements regarding
expected solid operating performance for fiscal 2017 and successfully
executing the company’s strategy; and other statements regarding outlook
or that are not historical facts. The company cautions investors that
any forward-looking statements are subject to risks and uncertainties
that may cause actual results and future trends to differ materially
from those matters expressed in or implied by such forward-looking
statements. The company's consolidated results, future trends and
forward-looking statements could be affected by many factors, risks and
uncertainties, including but not limited to: the loss of the company's
relationship with the U.S. Government or a change or reduction in U.S.
Government funding; potential changes in U.S. Government or customer
priorities and requirements (including potential deferrals of awards,
terminations, reductions of expenditures, changes to respond to the
priorities of Congress and the Administration, budgetary constraints,
debt ceiling implications, sequestration and cost-cutting initiatives);
a security breach, through cyber attack or otherwise, or other
significant disruptions of the company's IT networks and systems or
those the company operates for customers; the level of returns on
defined benefit plan assets and changes in interest rates; risks
inherent with large long-term fixed-price contracts, particularly the
ability to contain cost overruns; changes in estimates used in
accounting for the company’s programs; financial and government and
regulatory risks relating to international sales and operations; effects
of any non-compliance with laws; the continued effects of the general
weakness in the global economy and U.S. Government's budget deficits and
national debt and sequestration; the company's ability to continue to
develop new products that achieve market acceptance; the consequences of
uncertain economic conditions and future geo-political events; strategic
acquisitions and divestitures and the risks and uncertainties related
thereto, including the company's ability to manage and integrate
acquired businesses (including achieve estimated synergy savings and
realize other expected benefits), the actual amount and timing of
integration and other acquisition-related items and potential disruption
to relationships with employees, suppliers and customers, including the
U.S. Government, and to the company's business generally; performance of
the company's subcontractors and suppliers; potential claims related to
infringement of intellectual property rights or environmental
remediation or other contingencies, litigation and legal matters and the
ultimate outcome thereof; risks inherent in developing new and complex
technologies and/or that may not be covered adequately by insurance or
indemnity; changes in the company's effective tax rate; increased
indebtedness and significant unfunded pension liability and potential
downgrades in the company's credit ratings; unforeseen environmental
issues; natural disasters or other disruptions affecting the company's
operations; changes in future business or other market conditions that
could cause business investments and/or recorded goodwill or other
long-term assets to become impaired; the company's ability to attract
and retain key employees, maintain reasonable relationships with
unionized employees and manage escalating costs of providing employee
health care; potential tax, indemnification and other liabilities and
exposures related to Exelis' spin-off of Vectrus, Inc. and Exelis'
spin-off from ITT Corporation; or uses of proceeds from divestitures
different from the company’s current expectations. Further information
relating to these and other factors that may impact the company's
results, future trends and forward-looking statements are disclosed in
the company's filings with the SEC. The forward-looking statements
contained in this release are made as of the date of this release, and
the company disclaims any intention or obligation, other than imposed by
law, to update or revise any forward-looking statements, whether as a
result of new information, future events, or otherwise.
