Harris Gaining Momentum Overseas - Analyst Blog

Early indications in 2011 are clearly showing that Harris Corp. (HRS) is getting a significant foothold in the international (outside U.S.) markets. This is a welcome development as several industry researchers predicted that the U.S. Government budget for Defense may be reduced in 2011, which means low demand for military product manufacturers. As a leading government electronics supplier, Harris is benefiting from strong international market conditions.

Yesterday, Harris declared that it has secured a multi-year contract from an international customer to modernize their tactical radio program. Total contract size will be more than $300 million. The initial phase has been valued at over $100 million for which Harris will supply the full range of its Falcon II series communication products.

In the previous week, Harris won a 5-year contract to provide tactical and land mobile radios to international allies of the U.S. Department of Defense. The potential size of the contract was $475 million. In a nutshell, Harris will supply its pathbreaking RF Falcon II and Falcon III products to those customers.

Emerging economies like Brazil, Russia, India, and China together with Latin America, Asia Pacific, and Africa have paved the way for the company's long-term growth. Harris has a sustainable and diversified product pipeline with a potential market size of $15 billion.

International market opportunities are filling in very well for any deficiency in the domestic U.S. market. Strong momentum in the RF Communications segment will continue in future since Harris' next-generation Falcon III tactical radio is receiving increasing market traction.

Harris operates in a highly competitive communication equipment industry and faces intense competition from The Boeing Co. (BA), General Dynamics Corp. (GD) and Raytheon Co. (RTN). Despite competition, the company has established itself as a global provider of communication equipment and services for government and commercial customers with its presence in more than 150 countries.

 
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