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Harris Wins Dual IDIQ Contracts Worth $70M from US Navy

Zacks Equity Research
Updated

Leading supplier of communications equipment and services, Harris Corporation HRS, has received two five-year multi-award IDIQ (Indefinite Delivery, Indefinite Quantity) contracts from the U.S. Navy. Per the contracts, Harris will be assisting the U.S. Naval Surface Warfare Center's projects related to littoral, expeditionary and maritime mine defense.

Notably, the contracts have a collective limit of $70 million and were received during the company’s fourth-quarter fiscal 2015.

Harris will be vying for delivery orders to supply hardware and materials that facilitate crucial fleet readiness. The company will also be responsible for the development of science and technology programs that will improve the status of maritime mine defense skills.

Interestingly, Harris’ significant exposure and competence in magnetic and acoustic mine countermeasure technology plus airborne, surface, subsurface and unmanned applications has helped it solve Navy’s growing worldwide challenges.

It is worth noting that the contracts advance Harris’ 50-year tradition of supporting the Navy’s advanced mine countermeasure undertakings. Notably, since 1974, the company has been a part of all U.S. Navy mine clearance activities.

In the same vein, earlier in the month, Harris was awarded a $228 million IDIQ contract by the Space and Naval Warfare (SPAWAR) Systems Center Pacific in San Diego, CA, to aid the U.S. Navy’s maritime mine countermeasures (MCM) endeavors. The five-year contract incorporated a three-year base and two one-year options.

Going forward, we believe, such consistent and valuable contract wins should boost Harris’ top and bottom lines.

Meanwhile, in order to gain more operating efficiency as well as generate synergies from the recent acquisition of Exelis, Harris has decided to reorganize its business segments. The new divisions at Harris, which will be set up in the first quarter of fiscal 2016, will comprise four operating units, namely, Communication Systems, Critical Networks, Electronic Systems and Space and Intelligence Systems.

Harris currently sports a Zacks Rank #1 (Strong Buy).

Some other stocks worth considering in this sector are Juniper Networks, Inc. JNPR, TESSCO Technologies Inc. TESS and Skyworks Solutions Inc. SWKS. All the three stocks carry the same Zacks Rank as Harris.

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
HARRIS CORP (HRS): Free Stock Analysis Report
 
JUNIPER NETWRKS (JNPR): Free Stock Analysis Report
 
SKYWORKS SOLUTN (SWKS): Free Stock Analysis Report
 
TESSCO TECH INC (TESS): Free Stock Analysis Report
 
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