Rockwell Collins posts higher profit

CEDAR RAPIDS - Rockwell Collins on Wednesday reported a higher third-quarter profit that still missed analysts' projections and reduced its full-year forecast.

Company shares closed Wednesday at $48.76, up $1.53 or 3.24 percent, on the news.

The Cedar Rapids-based aviation electronics and communications supplier posted net income of $166 million for the quarter that ended on June 30. That was up 6 percent, from $158 million, or $1.01 a share, from a year earlier.

Earnings per share rose 13 percent, to $1.14 a share, from $1.01 in the third quarter of 2011.

Earnings per share growth was twice the rate of net income growth due to the favorable effect of the company's share repurchase program, which reduced the number of common shares outstanding by 7 percent.

Analysts surveyed by Thomson Reuters had expected Rockwell Collins to report a profit of $1.15 a share.

The company posted overall sales of $1.21 billion, up 1 percent from $1.19 billion in the same period last year.

Commercial systems sales rose 1 percent in the quarter, to $526 million, and government system sales were up 2 percent, to $679 million.

Sales and earnings included a benefit from the lower income tax rate of $7 million, or 5 cents per share, which partially offset the impact of $8 million, or 6 cents per share resulting from the May bankruptcy reorganization filing by Wichita, Kan.-based Hawker Beechcraft, to whom Rockwell Collins supplies avionics equipment.

Rockwell Collins has taken steps to reduce its dependence on government defense contracts in the wake of tighter federal budgets. Government systems sales were $679 million in the third quarter, up $11 million, or 2 percent, from $668 million reported for the same period last year.

Sales related to aircraft original equipment manufacturers increased $10 million, or 4 percent, to $295 million in the third quarter driven by increased sales to Airbus and Boeing resulting from higher production rates for the 787, 737 and A320 aircraft.

Clay Jones, Rockwell Collins president and chief executive officer, said the slowing global economic recovery and the Hawker Beechcraft bankruptcy have affected the company's forecast for business aviation sales growth. Sales of avionics equipment for business jets account for about 20 percent of the company's overall revenue.

"However, these near-term conditions have not diminished our confidence in longer term commercial growth as we look forward to several new product introductions in the years ahead," Jones said.

Rockwell Collins is projecting a revised profit of $4.40 to $4.50 a share for the fiscal year that will end on Sept. 30, compared with a prior forecast of as much as $4.60 a share. The company is reducing its full-year sales forecast to about $4.8 billion from about $4.85 billion.