* Earnings of $1.28 a share vs. Wall Street view $1.31
* Sales fall, weighed down by defense
* Shares down 3 percent
Oct 25 U.S. aviation electronics supplier
Rockwell Collins Inc reported a lower-than-expected
quarterly profit on Friday, hurt by weaker defense sales, and
its shares fell more than 3 percent.
Rockwell Collins is counting on commercial demand to fuel
growth as the United States pares defense spending. In the
fiscal year that just ended, its sales were roughly 52 percent
government-related and 48 percent commercial. Weakness in
business jets has also weighed on results.
"Our end markets in defense and the light end of business
aviation remain near the bottom of their cycles," Kelly Ortberg,
who became chief executive officer earlier this year, said
during a conference call.
Also, gridlock in budget talks in Washington has slowed
decision-making. U.S. defense companies are having difficulty as
the Pentagon's acquisition programs are canceled or delayed.
"The political environment in the U.S. is making it
increasingly difficult to plan our business as no one knows what
the next round in negotiations will yield," Ortberg added.
Net income rose 15 percent to $175 million, or $1.28 a
share, in the fourth quarter ended Sept. 30 from $152 million,
or $1.06 a share, a year earlier, when there was a higher share
Analysts on average expected $1.31 a share, according to
Thomson Reuters I/B/E/S.
Sales fell 1 percent to $1.25 billion. Commercial system
sales rose 3 percent, while government-related sales dropped 5
The company has reduced its business in some defense
segments and cut jobs as U.S. military spending has waned. It is
looking to bolster its commercial business with the planned
purchase of Arinc, which designs systems that help airline
pilots communicate with the ground.
For the fiscal year that began in October, Rockwell Collins
reiterated its forecast of $4.30 to $4.50 a share in earnings
and $4.5 billion to $4.6 billion in revenue. Analysts expect a
profit of $4.42 a share on revenue of $5.15 billion.
Shares of Rockwell Collins were down 3.2 percent at $69.96
in morning trading.