UPDATE 1-Harris to shed broadcast business, posts loss
* Q3 adj EPS $1.39 vs estimate $1.33
* Company also closing cyber operation
* Shares down 1.7 pct
May 1 (Reuters) - Harris Corp reported a quarterly loss on Tuesday as it took a big charge to write down assets in its broadcast communications business, which it plans to divest in order to focus on key divisions that have come under pressure as the U.S. government cuts defense spending.
Harris, which makes tactical radios for the military that distribute voice and data in an encrypted form, said the broadcast business would perform best with another owner.
"Given the tough environment that we're facing, we think it is important for us to just focus our resources, including our management time and attention, on the businesses that we know to be core to our company," Chief Executive William Brown said during a conference call.
Harris said in February it was closing a cyber integrated solutions business that provides remote cloud hosting in wake of losses with that initiative. It said at that time it was considering steps to maximize shareholder value with the broadcast operation.
Shares of Harris were down 1.7 percent to $44.75 in afternoon trading on Tuesday. Some analysts downgraded the stock. Raymond James lowered its rating to "market perform" from "strong buy," citing a flattish growth forecast and the divestiture plans.
"While we expect investors to uniformly cheer the decision (Broadcast has been a consistent drag on results), uncertainty regarding the timing/value of the broadcast divestiture (along with cyber) will likely weigh on the stock in the near-term," Raymond James analyst Chris Quilty said in a note to clients.
The company had a net loss of $353 million, or $3.15 per share, compared with net income of $139.5 million, or $1.09 per share, for the fiscal third quarter ended March 30.
Adjusted for items, profit was $1.39 a share. On that basis, analysts expected $1.33 a share, on average, according to Thomson Reuters I/B/E/S.
Quarterly revenue rose about 4.5 percent to $1.48 billion.
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