Rockwell Collins' 2Q profits up slightly

Rockwell Collins reported slightly higher earnings in its second fiscal quarter, but saw enough improvement in its markets to raise its full-year earnings guidance.

The aerospace and defense electronics company reported net income of $150 million, an increase of $2 million or 1 percent from the $148 million it reported in the second quarter of fiscal 2010. Sales rose 7 percent, or $81 million, to $1.223 billion.

Earnings came in at 96 cents per share, in line with analysts estimates, compared with 93 cents per share in the second quarter of 2010.

Full-year earnings guidance was increased by five cents per share to $3.90-$4.10 per share from a previous range of $3.85 to $4.05 per share.

While the company's Government Systems business has carried it through the aerospace downturn, that business segment was seeing signs of slower growth and flat earnings in the second quarter.

Government Systems sales rose 3 percent to $716 million in the second quarter of fiscal 2010. Operating earnings from the Government Systems segment were flat at $150 million.

Sales from the Commercial Systems segment increased $58 million or 13 percent to $507 million. Operating earnings from the Commercial Systems segment increased 33 percent, to $92 million.

Chairman and CEO Clay Jones said Commercial Systems delivered operating earnings growth at almost three times the rate of sales while Government Systems demonstrated it could maintain an exceptionally high rate of profitability despite slower growth.

"Halfway through our fiscal year, we see continued improving market conditions and sufficient reductions in areas of risk that we are again raising earnings guidance expectations," Jones said in prepared remarks.

The company saw further signs of improvement in the commercial airliner market. Sales related to aircraft original equipment manufacturers improved 16 percent to $270 million, thanks to higher product deliveries for the Boeing 7347 and Boeing 787 jetliners, Bombardier Global and Cessna CJ-4 aircraft. Aftermarket sales were up 15 percent to $208 million.

The company said it opend a new China System support Center in the company's recently built Shanghai office, the third facility opened in Shanghai by Rockwell Collins and the company's fifth in China.

Rockwell Collins also established a new office in Paris and opened a new office in the United Arab Emirates in the quarter, which ended March 31.

Shares of Rockwell Collins stock were down $1.21 or 1.9 percent to $62.57 on the New York Stock Exchange at 10 a.m.