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' two largest segments are government communications and RF communications. Government communications systems, 36% of revenue, provides advanced communications and information equipment 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.
RF communications, 34% of sales, offers radio communications and encryption technology for the US DoD, international tactical communications, and public safety and professional communications.
The integrated network solutions unit, 25% of sales, offers IT services, managed satellite and terrestrial communications, and health care interoperability and image management.
Through an acquisition Harris added another segment, Exelis, which accounted for 5% of sales. Exelis provides instruments solutions for positioning and navigation, sensors, air traffic management , image processing and distribution, communications, and information systems.
In 2015, Harris restructured its reporting segments. Starting with its 2016 fiscal year it will report results for Communication Systems, Critical Networks, Electronic Systems, and Space and Intelligence Systems.
Harris operates 260 locations in Canada, Europe, the Middle East, Central and South America, Africa, Asia, Caribbean, Latin American, 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 65% of sales.
Harris reported slightly higher revenue in 2015 (ended July) while net income tumbled. Revenue inched up 1.4% in 2014 to $5.08 billion. The Exelis acquisition contributed to higher revenue was did an increase in government communications systems. Sales of the Integrated Network Solutions segment dropped 14% with few US government orders.
The 2015 net income of $334 million was off 37% from 2013, when revenue was inflated by a decline in losses from discontinued operations.
Harris maintained its steady cash flow from operations, posting $854 million for 2015 compared to $849 in 2014.
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.
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.