* First quarter EPS 94 cents compares with 89 cents estimate
* Full year outlook raised due to tax credit
Jan 18 Rockwell Collins Inc, a supplier
of avionics and other electronic systems for commercial and
military airplanes, reported higher quarterly profit on Friday,
aided by share buybacks and cost controls.
The company also raised its earnings outlook for the full
year, citing the extension of a federal tax credit.
Rockwell Collins, which counts government agencies,
planemakers and airlines as customers, has reduced its business
in some defense segments and cut jobs as the United States has
moved to curb spending. It is also merging facilities and
looking to boost sales of commercial technologies amid a cloudy
"We'll see more benefit in the latter part of the year as
the full value of the restructuring activity flows through our
results," Chairman and Chief Executive Clay Jones said in an
He said more clarity on defense spending coupled with growth
in commercial markets should set Rockwell Collins up for
"accelerating growth" over the next several years.
Jones said it was "too early to tell" what the potential
impact to his company could be from the problems with Boeing's
787 Dreamliner, which has been grounded by regulators
while battery-related problems are investigated.
Rockwell Collins provides displays, communications and
surveillance and other systems for the 787.
"If Boeing gets to the root cause of the matter and resolves
it quickly, I'm highly confident there will be no impact to us,"
Jones said. "But I can't speak to that with certainty now
because we've not seen what that cause is or what the remedy
He added, though, that he was confident Boeing would resolve
the issue so that the planes could return to the air.
Net income at Rockwell Collins was $132 million, or 94 cents
a share, in the fiscal first quarter ended Dec. 31, compared
with $130 million, or 86 cents a share, a year earlier. Analysts
expected 89 cents a share, according to Thomson Reuters I/B/E/S.
Repurchases reduced the share count by 4 percent in the
quarter, aiding per share profit.
RBC Capital Markets analyst Robert Stallard called the
results "a decent first quarter" for Rockwell.
"We also view Collins as a beneficiary of a pickup in the
business jet market, which could (finally) start to recover this
year," Stallard said in a note to clients.
Quarterly sales fell 3 percent to $1.06 billion. Government
system sales dropped 6 percent to $546 million, while sales tied
to commercial systems rose 1 percent to $516 million.
The company said the extension of a federal research and
development tax credit led it to increase its full-year outlook
to $4.45 to $4.65 a share from the prior view of $4.30 to $4.50.
Analysts currently expect profit of $4.43 a share for the year.
Shares of Rockwell Collins were off 1.4 percent to $59.29 in