Rockwell Collins CEO: Fiscal Year First Quarter Seen As Low Point
By Ann Keeton, Of DOW JONES NEWSWIRES
CHICAGO -(Dow Jones)- Rockwell Collins Inc. (COL) expects the current quarter,
the first quarter of its fiscal year 2010, to be a 'trough' in the sharp
downturn for the commercial aircraft supply business, Clay Jones, chairman and
chief executive, said in an interview. Along with nose-diving sales in the
commercial and business aircraft markets, Rockwell Collins has also experienced
delays in some defense programs, the executive said.
The company, which makes cockpit electronics and communications equipment,
backed its financial forecast for fiscal 2010, but said results would come in on
the low side of its September outlook. It sees earnings per share in a range of
$3.35 to $3.55, on revenue of $4.6 billion to $4.8 billion. For fiscal 2009, the
company reported earnings per share of $3.73 on $4.47 billion in revenue.
Jones said the business aircraft market will likely pick up in the second half
of the year, led by improving sales of aircraft parts as global economies get
stronger.
Commercial carriers are putting off retrofitting aircraft as they conserve
cash to weather the industry downturn, Jones said. Downsizing at airlines has
resulted in 800 aircraft coming out of service in the past year, Jones said. "
Around 200 to 250 more are likely to come out," he said, as airlines ground
older, less fuel-efficient planes.
Rockwell's 2010 forecast also included cuts in commercial airplane production.
The company on Tuesday reported fiscal fourth-quarter earnings fell 26%.
Shares recently traded at $49.09, down $3.37%, or $1.71.
Quarterly profit fell to $134 million, or 84 cents a share, from $182 million,
or $1.13 a share, a year earlier. Excluding restructuring charges and a prior-
year tax gain, earnings fell to 93 cents from $1.05.
Revenue decreased 6.8% to $1.19 billion.
Jones said the 30% decline in commercial sales was somewhat offset by rising
revenue on the defense side.
Defense growth next year will be helped by the acquisition of DataPath, a
specialist in satellite-based network communications. Jones said that, with a
strong balance sheet, Rockwell Collins is in a good position to take advantage
of "a rich pipeline" of acquisition candidates.
Rockwell Collins said it would close a plant in San Jose, California. "It's a
high-cost area," Jones said. The plant makes avionics for defense customers,
where business has fallen with changes to F-16 and F-22 jet fighter production.
Jones said some operations from San Jose will move to facilities where Rockwell
Collins makes commercial cockpit display equipment.
Overall, Jones said, Rockwell Collins' work on an array of small defense
programs will allow that business to keep growing, even as government defense
spending slows.
-By Ann Keeton; Dow Jones Newswires
312-750-4120;ann.keeton@dowjones.com
(END) Dow Jones Newswires
11-03-091202ET
Copyright (c) 2009 Dow Jones & Company, Inc.
|