Rockwell Collins profit dips on higher taxes

Rockwell Collins in Cedar Rapids on Thursday posted a lower second-quarter profit, primarily due to higher income taxes, as sales rose on the company's purchase of ARINC.

The Cedar Rapids-based maker of avionics and communications gear recorded net inome of $147 million, or $1.07 per share, for the quarter that ended on March 31, compared with $161 million, or $1.17 per share, in the same quarter of 2013.

Sales totaled $1.27 billion in the second quarter, up 12 percent from $1.13 billion in the same quarter of 2013.

Kelly Ortberg, Rockwell Collins president and CEO, noted that net income in second quarter of 2013 included a $31 million, or 22 cents per share, benefit from the retroactive reinstatement of the Federal Research & Development Tax Credit, which expired on Dec. 31, 2013.

'Because it was retroactive for the entire year, we were able to take the entire benefit in the second quarter of 2013,' Ortberg said. 'That meant that we had higher taxes in the second quarter of this year.'

ARINC, which was acquired on Dec. 23, 2013, contributed $137 million of sales and $17 million of operating earnings to the second quarter of 2014.

'I'm very pleased that our information management services segment, which includes ARINC, came in better than we had forecast with 13 percent overall growth,' Ortberg said. 'We're also seeing good growth coming out of our air transport business with the new Boeing 787 at a high production rate and the Airbus A350 will come in at the end of our fiscal year.

'Our defense business is stabilizing. It's not shrinking near as much as it has as we've gone through this sequestration environment.'

Ortberg said Rockwell Collins is continuing to see a strong demand in international markets for its products.

'I am confident that we will be able to get to our goal of having 50 percent of our company be international business by the end of our five-year outlook,' Ortberg said.

Rockwell Collins raised its earnings per share outlook for the fiscal year to $4.40 to $4.55 from $4.35 to $4.55.

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