Harris Broadcast Revenue Is Up, But TV Transmission Cuts Are Planned

Harris said broadcast revenue in its second quarter was $155 million, up 14 percent from the same period last year.
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Harris said broadcast revenue in its second quarter was $155 million, up 14 percent from the same period last year.

Radio transmission systems revenue was higher, led by shipments of HD Radio systems. The company also said its revenue is benefiting from the 2006 acquisitions of Leitch Technology, Aastra Digital Video and Optimal Solutions.

Sequentially, revenue increased 11 percent compared to the first quarter.

But Harris also cited weakness in its TV transmission systems business and it plans cuts there.

Broadcast orders in the quarter increased 29 percent to $158 million, compared to last year, and were higher in all business areas except TV transmission systems. Broadcast operating income was $13 million in the second quarter; operating margin was 8.4 percent.

The company said revenue growth was led by double-digit increases in the video distribution area "as global customers continue to upgrade to digital and high-definition broadcast operations."

TV transmission systems revenue performance was described as weak and Harris said it will cut costs. Its business summary hinted at layoffs ahead, saying it will save $10 million in fiscal 2008 through "severance and facility exit costs."

Harris top executive Howard Lance outlined the company's strategy in its financial summary, saying that in commercial broadcast and telecom, "we are utilizing strategic acquisitions along with organic growth activities to increase market share." In those businesses, recent actions by Harris "are aimed at 'changing the game' and positioning Harris as the clear supplier of choice for global customers."

The parent company also released financials. Harris Corp. said revenue for the second quarter of fiscal 2007 increased 21 percent to $1.016 billion. Sequentially, revenue was up 7 percent, "compared to a strong first quarter."

The company also recently completed a planned combination of its Microwave Communications Division with Stratex Networks, creating a larger provider of wireless transmission network solutions; Harris owns 56 percent of the new company.

Lance called the quarter overall "another period of strong orders, revenue and earnings performance."

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