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September 24, 1998

HARRIS WARNS OF Q1 TROUBLE DUE TO CHIP MARKET

By CBR Staff Writer

Communications equipment and electronics company Harris Corp has become yet another victim of the global slump in the semiconductor market. The Melbourne, Florida-based company has issued a warning that its first quarter earnings will come in about 10% below Wall Street expectations of $0.58 per share. Moreover, the bottom line for the whole year will also be 10% lighter than the expected $3.12. Harris said the shortfall – which began in its semiconductor unit and spread to the communications business at large – is directly attributable to the downturn in the chip making industry as well as uncertainty in world markets, especially in Asia. To make matters worse, Harris said it will be taking a reserve against first-quarter earnings in anticipation of the settlement of a patent infringement suit against the company. A Federal Circuit Court of Appeals ruled that Harris was guilty of infringement and ordered it to pay $15.4m in damages plus attorneys’ fees and interest.

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