Commercial growth to fuel Rockwell Collins rebound, CEO says

The upcoming year will be one of growth for Rockwell Collins after a recession that brought two years of decline in profits and earnings.

That was the message to shareholders Friday at the aerospace electronics company's sparsely attended annual meeting at the Cedar Rapids Marriott.

“I don't think there's ever been a time when this company has been better positioned with its products, its markets and its customers than it is today,” company chairman, president and CEO Clay Jones told shareholders.

Jones described strong growth opportunities as Boeing prepares to go into production on its 787 and 747-8 jetliners, and the defense department re-awards a massive aerial refueling tanker project that is bound to include substantial Rockwelll Collins content.

Growth also beckons in such areas as the company's five-year push into the flight simulation business, and a newer push into flight information services through its Ascend business.

A year earlier, Jones had framed 2010 as a “transition year” for the company coming out of recession. That's how the year played out, Jones said, with the company exceeding its more modest profit and earnings targets. Earnings per share dipped 5.6 percent to $3.52 from $3.73, after peaking at $4.16 in 2008.

The company's share price rebounded in 2010, however, allowing Rockwell Collins stock to generate a total return of 30.7 percent with dividends.

For the upcoming year, Rockwell Collins expects earnings per share to increase at least 9.4 percent from $3.52 to a range of $3.85 to $4.05 per share.

The growth outlook for the Commercial Systems division is decidedly brighter than the defense-oriented Government Systems business. The latter faces the prospect of slower defense spending as military operations wind down in Iraq and the federal government ratchets down non-essential spending, Jones indicated.

On the commercial front, Rockwell Collins sees improving aftermarket sales and strong equipment positions on several important aircraft going into the production phase.

Boeing's fuel-efficient 787 jetliner expected to achieve flight certification later this year will have more Rockwell Collins content than any aircraft before it, Jones said. Rockwell Collins will have more than twice as much content as its ever had on an Airbus produdct when the Airbus A350 achieves certification in two to two-and-a-half years.

The company's new Pro Line Fusion integrated avionics system will achieve its first certification this year on a Bombardier-made jet, Jones said.

Government Systems should weather the tightening of defense spending well, Jones indicated, because of strong positions on a number of high priority defense projects. Rockwell Collins equipment has good positions on both the Boeing and EADS North America proposals, Jones said. He said production is near on the Joint Tactical Radio System project, a key initiative to improve battlefield communications.

Shareholders voted to approve an advisory vote on executive compensation every year, rejecting options to hold such votes every two or three years. The three-year option had been recommended by the board of directors.

Directors Chris Davis, Ralph Eberhart and David Lilley were reelected by shareholders.

Rockwell Collins employs more than 9,000 in the Cedar Rapids and Iowa City area.