Harris Corporation (HRS) has reported 49.40 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $85 million, or $0.69 a share in the quarter, compared with $168 million, or $1.34 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $172 million, or $1.38 a share compared with $170 million or $1.35 a share, a year ago.
Revenue during the quarter dropped 3.94 percent to $1,489 million from $1,550 million in the previous year period. Gross margin for the quarter expanded 36 basis points over the previous year period to 35.26 percent. Total expenses were 81.53 percent of quarterly revenues, down from 82.71 percent for the same period last year. This has led to an improvement of 118 basis points in operating margin to 18.47 percent.
Operating income for the quarter was $275 million, compared with $268 million in the previous year period.
"We generated strong results in the third quarter and expect solid operating performance for the fiscal year as we successfully execute our strategy," said William M. Brown, chairman, president and chief executive officer. "Last week we completed the sale of our government IT services business, which was another major step in our portfolio shaping strategy. As previously communicated, we plan to use proceeds from the divestitures to continue to support our capital allocation priorities, including deleveraging, pre-funding pension, and share repurchases."
For financial year 2017, the company forecasts diluted earnings per share to be in the range of $5.20 to $5.25. The company forecasts diluted earnings per share to be in the range of $5.50 to $5.55 on adjusted basis.
Operating cash flow falls marginally
Harris Corporation has generated cash of $489 million from operating activities during the nine month period, down 3.55 percent or $18 million, when compared with the last year period.
Cash flow from investing activities was $271 million for the nine month period as against cash outgo of $112 million in the last year period.
The company has spent $942 million cash to carry out financing activities during the nine month period as against cash outgo of $560 million in the last year period.
Working capital declines
Harris Corporation has witnessed a decline in the working capital over the last year. It stood at $718 million as at Mar. 31, 2017, down 15.93 percent or $136 million from $854 million on Apr. 01, 2016. Current ratio was at 1.60 as on Mar. 31, 2017, up from 1.42 on Apr. 01, 2016.
Cash conversion cycle (CCC) has decreased to 51 days for the quarter from 111 days for the last year period. Days sales outstanding went down to 55 days for the quarter compared with 67 days for the same period last year.
Days inventory outstanding has decreased to 42 days for the quarter compared with 93 days for the previous year period. At the same time, days payable outstanding went down to 47 days for the quarter from 49 for the same period last year.
Debt comes down
Harris Corporation has recorded a decline in total debt over the last one year. It stood at $4,213 million as on Mar. 31, 2017, down 12.10 percent or $580 million from $4,793 million on Apr. 01, 2016. Total debt was 37.93 percent of total assets as on Mar. 31, 2017, compared with 40.28 percent on Apr. 01, 2016. Debt to equity ratio was at 1.45 as on Mar. 31, 2017, up from 1.42 as on Apr. 01, 2016. Interest coverage ratio improved to 6.55 for the quarter from 5.83 for the same period last year.
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