Harris has ways to make its customers communicate. The company, which develops communications products for government and commercial customers in more than 125 countries, makes radio-frequency (RF) and satellite communications and other wireless network transmission equipment; air traffic control systems; and digital network management systems. Harris also offers specialized IT services. Harris' commercial clients come from the construction, energy, health care, maritime, oil, transportation, and utilities industries.
Harris' largest segment, RF communications (36% of sales), offers radio communications and encryption technology for the US DoD, international tactical communications, and public safety and professional communications. Government communications systems (36%) provides advanced communications and information systems to government civil, national intelligence, and defense programs. Civil settings include aviation and weather; national intelligence applications provide tracking, surveillance, cyber security and other functions; defense programs offers communications and information processing in support of missions and other defense operations. Integrated network solutions (29%) offers IT services, managed satellite and terrestrial communications, and health care interoperability and image management.
Harris operates 150 locations in Canada, Europe, the Middle East, Central and South America, Africa, Asia, and the US, which generates 92% of its overall revenue.
Sales and Marketing
Its primary customers are US government agencies, including prime contractors and supported foreign militaries, accounting for about 70% of sales.
Harris has ridden a roller coaster in revenue and net income in recent years, one year up and the next year down. It did a bit of both in 2014 (ended June) with revenue down about 2% to just over $5 billion and net income up by more than 370% to $535 million.
Reduced demand from US government customers cut sales in 2014 in the Integrated Network Solutions (down 7%) and RF Communications (down 1%) groups. The leap in net income was attributed to a decline in losses from discontinued operations and lower cost of sales and interest expenses.
Harris considers its greatest opportunities for growth to be in managed satellite communications, public safety and professional communications, health care IT, and emerging national markets. Affected sectors include energy, maritime, and government. The continued global deployment of the wireless 4G LTE standard will help fuel growth.
In 2014 the company raised its research and development spending by 12% to $264 million. The R&D is focused on enhancing existing products, and tailoring offerings for international markets. Harris expanded its Falcon family of tactical radios, adding the AN/VrC-118 Mid-Tier Networking Vehicular radio, the RF- 330E Wideband Rifleman Team Radio, the RF-340 Multi-channel Manpack, and the rF-7850a airborne Networking Mission radio.
Harris released Fusionfx, a set of software tools for healthcare that integrates patient information and makes it available to clinical teams. The product comes from its 2011 acquisition of Carefx The new product positions Harris to provide services related to the integration of the VA and Military Health Systems.
Internationally, the company is focused on Brazil and the Middle East and to do so in 2013 it sold its Broadcast Communications unit -- which includes TV and radio transmission systems, digital signage, and other digital media management services -- to The Gores Group for about $225 million.
Mergers and Acquisitions
Harris also grows through the use of acquisitions. In a potentially significant deal, in 2015 it agreed to purchase Exelis, provider of communications products catering to the government, in a transaction worth $4.7 billion. The deal will beef up Harris' presence in the government sector and would create a combined company with more than $8 billion in sales.