Guidance
As a result of the company's strong first half performance and benefits from tax reform, Harris updated its guidance for fiscal 2018 to the following:
- Revenue in a range of $6.08 - 6.14 billion, up 3 - 4% from fiscal 2017 (tightened from previous guidance of $6.02 - 6.14 billion, up 2 - 4%)
- GAAP EPS from continuing operations in a range of $5.78 - $5.98 and non-GAAP EPS2 from continuing operations in a range of $6.30 - $6.50 (an increase from previous guidance of $5.85 - $6.05 GAAP and non-GAAP)
- Free cash flow of approximately $900 million (tightened from previous guidance of $850 - 900 million)
- Share repurchases of $200 million (up $50 million from previous guidance)
- Tax rate of approximately 28% GAAP; 23% non-GAAP (a decrease from approximately 28.5% previously, including a half-year benefit of 5 percentage points from tax reform)
Conference Call and Webcast
Harris will host a conference call today, January 30, at 8:30 a.m. Eastern Time (ET) to discuss its fiscal 2018 second quarter financial results. The dial-in numbers for the teleconference are (U.S.) (877) 407-6184 and (International) (201) 389-0877, and participants will be directed to an operator. 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 January 30.
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, Electronic Systems and Space and Intelligence 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 operating income, operating margin and earnings per diluted share from continuing operations for the second quarter and first half of fiscal 2018 and expected earnings per diluted share from continuing operations for fiscal 2018, in each case excluding non-cash charges in the second quarter of fiscal 2018 from a one-time write-down of deferred tax assets and from an adjustment for deferred compensation; operating income, operating margin and earnings per diluted share from continuing operations for the second quarter and first half of fiscal 2017, in each case excluding acquisition-related charges; and free cash flow for the second quarter and first half of fiscal 2018 and the second quarter and first half of fiscal 2017 and expected free cash flow for fiscal 2018, in each case 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 (8 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, free cash flow, share repurchase and tax rate guidance for
fiscal 2018; changes in earnings guidance for fiscal 2018; potential
contract opportunities and awards; the potential value of contract
awards; 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 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 and realize expected benefits and the 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;
significant indebtedness and 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; or potential tax, indemnification and other liabilities and
exposures related to Exelis' spin-off of Vectrus, Inc. and Exelis'
spin-off from ITT Corporation. 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 event, or otherwise.
