Harris Corporation (NYSE:HRS) Q2 2015 Earnings Conference Call - Final Transcript

Feb 06, 2015 • 08:30 am ET


Harris Corporation (NYSE:HRS) Q2 2015 Earnings Conference Call - Final Transcript


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Good day ladies and gentlemen and welcome to the Harris Corporation's Second Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]

I would now like to introduce your host for today's conference call is Pamela Padgett, Vice President of Investor Relations. You may begin ma'am.

Pamela Padgett

Thank you. Good morning, everyone and welcome to our call today to discuss Harris second quarter fiscal 2015 earnings, as well as our intended acquisition of Exelis, that we announced earlier this morning. I'm Pamela Padgett and on the call today is Bill Brown, Chairman and CEO; Mick Lopez, Senior Vice President and Chief Financial Officer; and Dave Melcher, CEO and President of Exelis.

Before we get started, a few words on forward-looking statements. In the course of this teleconference, management may make forward-looking statements. Including regarding the acquisition we announced today. Forward-looking statements involve assumptions, risks and uncertainties that could cause actual results to differ materially from those statements. For more information and a discussion of such assumptions, risks and uncertainties, please see the press release and filings made by Harris with the SEC.

In addition, in our press releases and on this teleconference and the related presentations, we will discuss certain financial measures and information that are non-GAAP financial measures. A reconciliation to the comparable GAAP measures in respect of our second fiscal 2015 financial results is included on the Investor Relations section of our Website, which is www.harris.com. A replay of the call will also be available on the Investor Relations section of our Website.

And with that Bill, I will turn it over to you.

Bill Brown

Okay, very good. Thank you Pam and good morning everyone. I want to start by expressing our deepest condolences on behalf of Harris to the family and friends of Joe Nadol, an analyst who has followed Harris for almost a decade, and who tragically passed away earlier this week.

So today, we are announcing a transformational acquisition of Harris that will create significant and lasting value for our shareholders, our customers and our employees. With the acquisition of Exelis, we are increasing our scale, broadening our technology base and expanding our customer set in markets where we had decades of successful performance.

So before jumping into the transaction, Mick and I will briefly cover second quarter results and updated Harris guidance, and then Dave shall walk you through the acquisition before opening the call for questions.

So turning to our second quarter earnings presentation Slides 3 and 4, Harris performed well in the second quarter with earnings per share of $1.32. Operating results were solid reflecting good execution and lower cost. Earnings per share also benefited from lower than expected taxes including the 2014 R&D tax credit. Revenue for the Company was down 1% with growth in Government Communications Systems, International Tactical Radios and Commercial CapRock more than offset by continued weakness in U.S. Tactical