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* Profit of $1.19/share from continuing operations vs estimate $1.17
* Company to sell satellite business (Adds planned business sale, government revenues, share price)
July 22 (Reuters) - Rockwell Collins Inc, a maker of avionics and other electronics systems for aircraft, on Tuesday reported a better-than-expected quarterly profit, aided by higher deliveries of equipment for planes such as the Boeing 787.
Net profit fell to $158 million, or $1.15 per share, in the fiscal third quarter ended June 30, from $164 million, or $1.20 per share, a year earlier. There were fewer shares outstanding in the latest period.
However, the company earned $1.19 per share from continuing operations, higher than the $1.17 analysts on average were expecting, according to Thomson Reuters I/B/E/S.
Total sales rose 12 percent to $1.26 billion, aided by the acquisition of the ARINC information management business. Revenue at the commercial systems unit of Rockwell Collins, which sells to Boeing Co and Airbus Group NV, rose 5.8 percent to $583 million. Government system sales fell 6 percent to $535 million.
Rockwell Collins is beefing up its exposure to commercial markets as U.S. defense spending wanes. Commercial revenues stand to grow because of production of newer planes such as the Boeing 787 and Airbus A350.
The company last year bought ARINC Inc, a provider of systems that help airline pilots communicate, and has said that purchase will enable it to bolster aviation information management services. It formed a new segment for such services that had $146 million in sales in the just-completed quarter.
In recent years, Rockwell Collins has exited some sectors of defense. On Tuesday, it said it was selling a satellite communications business formerly known as Datapath that mainly caters to military customers.
"Government revenues continue to come under pressure, though the sale of Datapath should help the overall company mix," RBC Capital Markets analyst Rob Stallard said in a note to clients. He added that commercial results were better than expected but noted that higher employee benefit costs hurt margins in that segment.
Rockwell raised the low end of its 2014 earnings forecast to $4.45 per share from $4.40. It kept the higher end of the range at $4.55. It said it expected sales for the year that ends in September of $4.9 billion to $4.95 billion, down from a prior view of up to $5.05 billion, reflecting the Datapath divestiture.
Shares of Rockwell Collins were down 1.9 percent to $78.90 in morning trading. (Reporting by Rohit T. K. and Sagarika Jaisinghani in Bangalore and Karen Jacobs in Atlanta; Editing by Savio D'Souza and Tom Brown)