Harris Corporation (NYSE:HRS) reported revenue in the fourth quarter of fiscal 2012 of $1.44 billion compared with $1.52 billion in the prior-year quarter.

GAAP income from continuing operations was $137 million, or $1.20 per diluted share, compared with $134 million, or $1.06 per diluted share, in the prior year. As previously announced, the company approved a plan during the quarter to divest Broadcast Communications, which is now reported as discontinued operations.

Non-GAAP income from continuing operations was $162 million, or $1.42 per diluted share, compared with $156 million, or $1.24 per diluted share, in the prior year, representing an increase in non-GAAP earnings per share of 15 percent. Non-GAAP amounts in this release exclude acquisition-related costs, and a reconciliation of GAAP to non-GAAP financial measures is provided in Tables 5 through 8 (click on the graphic to take you to the complete report with tables), along with accompanying notes. Orders in the fourth quarter were $1.48 billion compared with $1.21 billion in the prior year.

“Harris fourth quarter results represented a solid finish to fiscal 2012,” said William M. Brown, president and chief executive officer. “Both income and earnings per share from continuing operations increased compared with the prior year, driven by operating improvement in all three segments and from a lower share count. Cash flow was particularly strong in the fourth quarter, contributing to excellent full year results.

“Although revenue declined as expected, orders in the quarter were higher than revenue and increased in all three segments with the strongest increase in Integrated Network Solutions. Our recent wins are encouraging as we enter a new fiscal year facing uncertainty in the government spending environment.”

Results for Full Fiscal Year
Revenue in fiscal 2012 was $5.45 billion, a one percent increase compared with $5.42 billion in the prior year. GAAP income from continuing operations was $559 million, or $4.80 per diluted share, compared with $600 million, or $4.69 per diluted share, in the prior year. Non-GAAP income from continuing operations was $605 million, or $5.20 per diluted share, compared with $636 million, or $4.98 per diluted share, in the prior year, representing an increase in non-GAAP earnings per share of 4 percent. Cash flow from operations was $853 million compared with $833 million in the prior year, and free cash flow was $619 million, compared with $508 million in the prior year.

RF Communications
Revenue in the fourth quarter for the RF Communications segment was $584 million compared with $628 million in the prior year. Tactical Communications revenue was $409 million, a decline of 13 percent compared with the prior year. Public Safety and Professional Communications revenue was $175 million, an increase of 12 percent compared with the prior year. Operating income for the RF Communications segment was $196 million compared with $191 million in the prior year. Operating margin was 33.5 percent compared with 30.4 percent in the prior year, improving as a result of lower manufacturing costs and operating expenses.

Orders for the segment totaled $529 million, including $356 million in Tactical Communications and $173 million in Public Safety and Professional Communications. Book-to-bill was .91 for the segment. At the end of the fourth quarter, backlog was $665 million in Tactical Communications and $635 million in Public Safety and Professional Communications.

During the quarter, Harris was awarded a 5-year, $400 million Indefinite Delivery Indefinite Quantity (IDIQ) contract from the U.S. Special Operations Command and received three orders under the contract totaling $120 million for Falcon III® wideband radios. Major U.S. awards also included a 5-year, $26 million IDIQ contract to upgrade capabilities and provide ongoing support for the open-standard Joint Tactical Radio System (JTRS) Soldier Radio Waveform (SRW) software, originally developed by the JTRS program, and a $27 million order from the U.S. Army to upgrade Falcon III 117G wideband radios with the SRW software.

International orders included $31 million from the Kingdom of Jordan for Falcon III and Falcon II® tactical radios for the next phase of a C4ISR system modernization. Harris also was awarded a contract with a potential value of $109 million under which we received a $32 million initial order from the San Francisco Municipal Transportation Authority to deploy a communications network to increase operational efficiencies, improve safety and provide interoperability with public safety agencies.

Integrated Network Solutions
Revenue in the fourth quarter for the Integrated Network Solutions segment was $379 million, a decrease of 10 percent compared with $419 million in the prior year. Strong growth in Healthcare Solutions and CapRock Communications was more than offset by a decline in IT Services revenue, primarily from the loss of the Patriot program and the completion of system and network integration services for the U.S. Army Materiel Command.

Operating income for the segment was $6 million compared with $4 million in the prior year. Non-GAAP operating income was $34 million compared with $33 million in the prior year. Strong operating improvement in CapRock Communications was offset by an operating income decline in IT Services.

During the quarter, Harris was among multiple awardees for the 10-year, $20 billion ceiling value Chief Information Officer – Solutions and Partners IDIQ IT services contract from the National Institutes of Health. Significant maritime awards in CapRock Communications included a 5-year contract with Royal Caribbean Cruises Ltd. to provide global communications services on board 34 of its ships, and a 5-year contract with a customer in the Asia Pacific region covering 2,000 commercial vessels located around the globe. Awards also included $26 million in orders for satellite communications solutions under the Future COMSATCOM Services Acquisition (FCSA) contract.

Government Communications Systems
Revenue in the fourth quarter for the Government Communications Systems segment was $497 million compared with $500 million in the prior year. Year-over-year revenue increases from the GOES-R weather program, NASA’s Space Network Ground Segment Sustainment (SGSS) program, and classified programs were offset by lower revenue from Department of Defense customers. Operating income was $66 million compared with $63 million in the prior year. Operating margin was 13.3 percent compared with 12.7 percent in the prior year.

Major awards in the quarter included a 5-year contract to supply 81 ADS-B receiver payloads to be hosted on the Iridium NEXT constellation, which will provide a satellite-based aircraft tracking system to enhance global air traffic control; a 2-year follow-on contract with a potential value of $47 million for a strategic satellite terminal modernization program; and five awards from various classified customers totaling $137 million.

Earnings Guidance
The company reiterated its previous guidance for GAAP income from continuing operations for fiscal 2013 in the range of $5.10 to $5.30 per diluted share and for revenue of about flat to 2 percent growth compared with fiscal 2012.