Rockwell Collins Earnings: Revenue Growth Snaps Losing Streak, Profit Climbs

S&P 500 (NYSE:SPY) component Rockwell Collins Inc. (NYSE:COL) reported its results for the third quarter. Rockwell Collins designs and produces communications and aviation electronics for commercial and military customers across the globe.

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Rockwell Collins Inc. Earnings Cheat Sheet

Results: Net income for Rockwell Collins Inc. rose to $166 million ($1.14 per share) vs. $158 million ($1.01 per share) in the same quarter a year earlier. This marks a rise of 5.1% from the year-earlier quarter.

Revenue: Rose 1.3% to $1.21 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Rockwell Collins Inc. was about in line with expectations as the mean analyst estimate of $1.15 per share. It fell short of the average revenue estimate of $1.24 billion.

Quoting Management: “In the current challenging market conditions, our balanced business model and capital deployment strategies are providing the stability and shareowner focus that you would expect from Rockwell Collins,” said Rockwell Collins Chairman, President and Chief Executive Officer, Clay Jones. “For the first time in five quarters, Government Systems sales increased to complement moderating revenue in Commercial Systems due to difficult comparables and the impacts from a recent bankruptcy filing by one of our customers. However, despite this modest sales increase, earnings per share increased by double digits due to the increased level of share repurchases that has reduced share count by 7% this year. In addition, we increased our dividend this quarter by 25% to further enhance the return of value to our shareowners.” Jones went on to state, “The slowdown in the global economic recovery and bankruptcy of Hawker Beechcraft continues to impact our initial projections of the business aviation growth. As a result, we have revised our 2012 sales, EPS and cash flow guidance. However, these near-term conditions have not diminished our confidence in longer term commercial growth as we look forward to several new product introductions in the years ahead.”

Key Stats:

A year-over-year revenue increase last quarter snaps a streak of two consecutive quarters of revenue declines. Revenue fell 5.1% in the second quarter and fell 1.4% in the first quarter.

The company fell short of estimates last quarter after being in line with expectations the quarter before with net income of $1.09.

Net income has increased 5.3% year-over-year on average across the last five quarters. The biggest gain came in the fourth quarter of the last fiscal year, when income climbed 16.7% from the year-earlier quarter.

Looking Forward: Over the past sixty days, the outlook for the company’s performance next quarter has become increasingly unfavorable. The average estimate for the fourth quarter is $1.32 per share, a drop from $1.33. The average estimate for the fiscal year is $4.40 per share, down from $4.44 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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