Rockwell Collins expects stabilization in 2010

Rockwell Collins sees 2010 as a “year of transition,” Chairman and CEO Clay Jones told shareholders Tuesday at the aerospace electronics company's annual shareholders meeting.

Jones said the company sees signs that its key commercial markets are stabilizing, but significant sales improvements are not expected until 2011. In contrast, the company expects continued sales improvement in defense products.

The 2009 fiscal year was challenging, Jones said. Rockwell Collins' revenues dipped by 4 percent and earnings per share declined 10 percent.

“It was clearly not the performance you've come to expect from Rockwell Collins, however it does reflect the market,” he told a small group of shareholders who braved snow-covered roads to attend the meeting at the Cedar Rapids Marriott.

Rockwell Collins expects to save $20 million annually after closing a facility in San Jose, Calif. that makes tactical displays for jet fighters. Work performed by about 600 affected California workers is being redistributed to locations in Iowa, Florida, and Oregon.

In a post-meeting interview, Jones said he has visited most of the sites that are affected by the reorganization, which is going “on schedule and very much according to plan.”

“I'm extremely pleased and proud of the employees who have been involved,” Jones said.

Jones said prospects are good for more “bolt-on acquisitions” in the current year. The company already has done one acquisition of Air Routing International, which provides flight departments with trip planning services.

The federal government's fiscal 2011 defense appropriations request that was released last week contained no major disappointments for Rockwell Collins, Jones said, indicating “all our projects were well supported.”

Jones said the post-Iraq war military spending will include “great demand for situational awareness systems in a networked environment.” He said procurement reform in Congress should play to Rockwell Collins' competitive strengths.

Shareholders re-elected board of directors members Andrew Policano, Mark Donegan and Donald Beall to terms expiring in 2013. Beall, retired chairman and CEO of Rockwell Collins, is chairman of the executive committee and a member of the technology committee. Donegan is a member of the compensation committee, and Policano is chairman of the board nominating and governance committee.