Rockwell Collins CEO upbeat on business

Rockwell Collins shareholders received an upbeat assessment of the company at Thursday's annual shareholders meeting.

Kelly Ortberg, chairman, president and CEO of the Cedar Rapids-based avionics, communications and information management provider, said fiscal year 2015 was a record year in terms of revenue, despite a soft business jet market.

'We have not expected that market to snap back, so it's no surprise for us,” Ortberg said in comments after the meeting at the Cedar Rapids Marriott.

'It has been down for the last seven years, so I think we are in a ‘new normal' of pretty low growth. Having said that, we are seeing some signs of enhanced flight activity and some enhanced purchases of business jets, primarily new ones that are entering service from original equipment manufacturers.”

Rockwell Collins expects a mid-single-digit decline in sales to the business jet sector in its fiscal year, which ends on Sept. 30, 2016. The business jet market accounts for 20 percent of the company's overall revenues.

Ortberg said Rockwell Collins' information management services, which accounts for 12.5 percent of revenue, is the fastest-growing segment of the company.

'I think there's opportunities for us to grow organically, but also make some acquisitions to help us build out that portfolio,” Ortberg said. 'We are taking some of the technology that we have around the safety and security of aircraft and applying it similarly in the nuclear power industry for command and control. We're also applying it to trains in the area of positive train control.”

Ortberg said Rockwell Collins has not experienced any impact from the sharp drop in crude oil prices. He said sustained lower oil prices may prompt airlines to delay replacement of less fuel-efficient aircraft.

'That's good for our company because we have an aftermarket service that we provide to older aircraft, and the longer they fly, that create additional business opportunities for us,” Ortberg said.

Ortberg said Rockwell Collins employment has stabilized after a recent early retirement offer was accepted by close to 500 employees worldwide. He said the company is continuing to hire in areas where specific skills are needed.

'I would mark it as a first major transition in the baby boomer retirement, which we've all known is coming and we're ready for it,” Ortberg said. 'We're in a decade of transition as the baby boomers retire from the workforce.”