• EPS from continuing operations up 19%, 8% versus non-GAAP, on flat revenue
• Orders of $2.3 billion; book-to-bill of 1.6
• Operating cash flow $95 million; free cash flow $72 million
• Reiterated FY18 revenue, EPS and free cash flow guidance

MELBOURNE, Fla. — (BUSINESS WIRE) — October 31, 2017 — Harris Corporation (NYSE: HRS) reported fiscal 2018 first quarter revenue of $1.41 billion, flat compared with prior year. Earnings per diluted share from continuing operations increased to $1.38 from $1.16 (GAAP) and $1.28 (non-GAAP¹). Operating margin expanded to 19.2% from 17.3% (GAAP) and 18.5% (non-GAAP¹).

"We are off to a good start in fiscal 2018 with solid first quarter results, including record orders of $2.3 billion and a book-to-bill of 1.6,” said William M. Brown, chairman, president and chief executive officer. “In addition, our focus on productivity and program execution contributed to 8% EPS growth and drove 70 basis points of margin expansion. These results mark good progress against our strategic priorities and position us to achieve our guidance for the year."

Summary Financial Results

Revenue was flat, as growth in Space and Intelligence Systems and Electronic Systems was offset by lower volume in Communication Systems. The improvements in GAAP operating income, margin and EPS were primarily due to Exelis acquisition-related charges incurred in the first quarter of fiscal 2017. Non-GAAP operating income grew 3% and margin expanded by 70 basis points (bps) from strong execution and program performance across all three segments and higher pension income, partially offset by a $14 million unfavorable impact from the ADS-B program transition from build-out to sustainment. The 8% EPS increase was driven by higher operating income and lower share count, partially offset by a less favorable tax rate. The 33% orders increase resulted in a book-to-bill of 1.6.

Communication Systems