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Harris Wins IDIQ Contracts to Enhance Geospatial Databases

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Harris Corporation recently secured three multi-award IDIQ contracts with ceilings totaling $1.5 billion to provide geospatial data services to the National Geospatial-Intelligence Agency (“NGA”) for a period of up to 10 years.

Per the contracts, the company will offer high-quality geospatial-intelligence (GEOINT) information covering all three areas of NGA's JANUS program­ — geography, imagery and elevation. The high-quality GEOINT information will be used by the U.S. intelligence community and military globally. Notably, the JANUS program will help in maintaining the geospatially accurate databases of the world, which can be easily accessed during needs. The company will evaluate the health of NGA databases and facilitate the integration of geospatial data for intelligence and military customers, using its predictive analytics technology.

The company has been in a partnership with the NGA for more than 20 years, providing automated geospatial data processing and geospatial systems design and development.

Our Take

Harris’ revenues are highly dependent on the U.S. government. In addition, the company has significant volume of sales to foreign military bases, which are subject to numerous regulations that can hold up sales or result in cancellation. Furthermore, foreign defense spending tends to be highly volatile, which can move large chunks of sales quarter to quarter.

In the past three months, this Zacks Rank #4 (Sell) stock has incurred an average loss of 9.6% against the industry’s rise of 7.3%. Further, margin woes remain a perennial threat for the company. Increasing cost of operations is likely to contract its profitability in the near term.

Stocks to Consider

Some better-ranked stocks from the same space are Comtech Telecommunications Corp. (CMTL - Free Report) , Juniper Networks, Inc. (JNPR - Free Report) and AMETEK, Inc. (AME - Free Report) . While Comtech Telecommunications sports a Zacks Rank #1 (Strong Buy), Juniper Networks and AMETEK carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Comtech Telecommunications surpassed estimates in each of the trailing four quarters, with an average positive earnings surprise of 123.70%.

Juniper Networks surpassed estimates thrice in the trailing four quarters, with an average positive earnings surprise of 3.35%.

AMETEK outpaced estimates in each of the preceding four quarters, with an average earnings surprise of 6.03%.

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