Rockwell Collins Tops Street’s 1Q Earnings Forecast, Govt Sales See 5% Increase

GovCon Index-listed Rockwell Collins (NYSE: COL) reported first quarter earnings above Wall Street analysts’ expectations Friday with help from higher avionics and other aviation-related sales in the Cedar Rapids, Iowa-based aerospace company’s government business.

Rockwell Collins said earnings for the October-December period came in at $1.20 per share that excludes $0.10 of costs related to its acquisition of fellow avionics company B/E Aerospace (Nasdaq: BEAV), which tops the consensus analyst forecast of $1.14 EPS.

Rockwell Collins expects to close the $6.4 billion transaction in the spring, pending shareholder and regulatory approvals.

Net income climbed 7.41 percent from the prior year period to $145 million with contributions from a retroactive reinstatement of a federal research-and-development tax credit to partially offset restructuring and impairment charges.

The company left full-year sales guidance unchanged at $5.3 billion-$5.4 billion — excluding revenue from B/E Aerospace — and held to its free cash flow outlook of $600 million-$700 million.

Overall first quarter revenue increased 1.71 percent year-over-year to $1.19 billion versus Wall Street’s outlook of $1.20 billion as growth in the government systems and information management services segments offset declines in the commercial systems unit.

Government systems sales rose 5.32 percent to $475 million at 39.81 percent of total revenue on higher activity in simulation and training programs and fixed-wing platforms.

Double-digit growth in aviation-related revenue helped lift information management services segment sales 8.33 percent to $169 million, while commercial systems fell 2.31 percent to $549 million on lower aftermarket activity.

As of Thursday’s close, shares in Rockwell Collins have traded up 3.91 percent over 52 weeks as Executive Mosaic’s GovCon Index has added 22.87 percent in that time.

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