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Harris broadcast revenues up 50%

3 August 2006

Harris Corporation has reported revenue for the fourth quarter of fiscal year 2006 of $992 million, a 21% increase compared to $822 million in the prior-year quarter.

Orders in the fourth quarter increased 45% to $1.2 billion and were higher in each of the company’s four business segments. For the full fiscal year 2006, revenue was $3.5 billion, representing a 16% increase compared to fiscal year 2005.

Revenue in the Broadcast Communications segment was $172 million in the fourth quarter, up 50% compared to $115 million in the prior-year quarter, with revenue growth benefiting from the October 2005 acquisition of Leitch Technology. Excluding charges, operating margin was 12.2% compared to 6.9% in the prior-year quarter. The improvement in operating performance resulted from higher gross margins, which have benefited significantly from fiscal year 2006 cost-reduction actions and from the addition of higher-margin video distribution and digital media products from the Leitch acquisition.

“All of our business segments had improved operating performance and are entering the new fiscal year with significant momentum,” said Howard L. Lance, chairman, president, and chief executive officer. “Orders of $1.2 billion made the fourth quarter the strongest in the company’s history. We have significantly increased new product introductions across the company and will continue to fund a level of engineering research and development investment that will further broaden our product portfolio, market reach, and customer base.

Broadcast revenue increased 20%, driven by demand for HD Radio transmission systems, networking products, software systems, sales of European transmission equipment, and video distribution and digital media products. Orders increased significantly over the prior-year quarter and benefited from the Leitch acquisition and its double-digit orders growth for video distribution and digital media products. Demand was particularly strong for the X75 processor, Platinum router, and ICONmaster master control system. Orders benefited from several large contracts for software systems and increased demand for radio transmission systems, including the new FLEXSTAR family of HD Radio products that Harris recently launched in US markets.

During the quarter, Harris completed the acquisition of Aastra Digital Video. Aastra is a developer and marketer of video networking products. According to the company, the acquisition further enables it to offer broad networking solutions that transport media content over a variety of broadcast, cable, satellite, and telco networks, including those supporting new services such as IPTV and mobile TV.

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