Rockwell Collins Inc.
) reported third-quarter fiscal 2014 earnings results ending Jun
30, 2014. The company's adjusted earnings per share of $1.19
surpassed the Zacks Consensus Estimate and improved from the
prior-year figure by a penny. This was primarily driven by an
improvement in sales.
Rockwell Collins, Inc - Earnings Surprise |
In the fiscal third quarter, Rockwell Collins' total sales were
$1,264 million, lagging the Zacks Consensus Estimate of $1,302
million by 2.9%. However, the top line increased 11.7% year over
year, primarily on the back of the ARINC Inc. acquisition.
Total segment operating income during the quarter was $263
million compared with $257 million in the year-ago quarter,
reflecting 2.3% year-over-year growth.
Rockwell Collins' total research and development (R&D)
expenses were $230 million, up 2.2% year over year.
Interest expenses increased to $15 million from $7 million a
year ago primarily due to a rise in long-term debt.
In the quarter under review, segmental sales of $583 million were
up 5.8% year over year, primarily on the heels of higher hardware
delivery rates for the Boeing 787 aircraft, customer funded
development program sales and Boeing 747-8 and 787 spares sales,
and higher service and support activities.
The segment reported sales of $535 million, down around 6% from the
prior-year figure mainly due to lower Avionics sales as a result of
a decline in hardware deliveries for the E-6 program and the
completion of certain rotary wing upgrade programs. In addition, a
decrease in Communication product sales due to lower deliveries of
JTRS Manpack radios also impacted segmental revenues.
Information Management Services:
Segment sales were $146 million, up from $12 million in the
year-ago period primarily due to the acquisition of ARINC Inc.
Rockwell Collins has entered into an agreement to sell its
satellite communications systems business, previously known as
Datapath, Inc. The transaction is subject to several conditions and
is expected to complete in fourth-quarter fiscal 2014.
As of Jun 30, 2014, Rockwell Collins' cash and cash equivalents
were $450 million versus $391 million as of Sep 30, 2013.
Long-term debt (net) was $1,663 million as of Jun 30, 2014, up
from $563 million as of Sep 30, 2013.
Cash provided by operating activities during the first nine
months of fiscal 2014 was $237 million versus $309 million in the
year-ago comparable period.
During the quarter, Rockwell Collins repurchased 0.65 million
shares of common stock at a total cost of $51 million.
Fiscal 2014 Guidance
Rockwell Collins narrowed its earnings guidance for fiscal 2014
to $4.45-$4.55 per share from the previous projection of
$4.40-$4.55 per share, given the strong contribution from its
Information Management Services segment as a result of the ARINC
The company expects total segment operating margin of around
Rockwell Collins however reduced its fiscal 2014 revenue
guidance to $4.90-$4.95 billion from the prior forecast of
$4.95-$5.05 billion due to the proposed divestiture of its
satellite communications systems business.
The company reiterated its guidance for cash flow from
operations in the range of $600 million to $700 million.
Rockwell Collins also maintained its R&D investment at
approximately $950 million for fiscal 2014 while capital
expenditure will likely be $160 million.
At the Peer
Alliant Techsystems Inc.
) is slated to release its first-quarter fiscal 2015 earnings on
Jul 31. The Zacks Consensus Estimate is pegged at $2.45.
Rockwell Collins currently has a Zacks Rank #2 (Buy). Investors
can also consider stocks like
), both carrying a Zacks Rank #2 (Buy).
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