Rockwell Collins Q3 Profit Tops View, Revenues Match; Boosts 2013 EPS Outlook

(RTTNews) - Communications and aviation electronics maker Rockwell Collins, Inc. (COL) reported Friday a profit for the third quarter that edged down from last year, reflecting lower sales at government systems.

However, earnings per share grew 5 percent benefiting from share repurchases and topped analysts' expectations, while quarterly revenues matched their estimates. Looking ahead, the company raised its earnings outlook for the full-year 2013.

"Despite the lingering impact of defense budget reductions, I believe the operating performance of our company was outstanding in the third quarter. Segment operating margins were up 140 basis points driven by a Commercial Systems increase of 340 basis points while Government Systems held roughly flat on declining sales," Chairman and CEO Clay Jones said in a statement.

The Cedar Rapids, Iowa-based company reported net income of $164 million for the third quarter, lower than $166 million in the prior-year quarter, while earnings per share grew 5 percent to $1.20 from last year's $1.14.

On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $1.16 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter decreased 3 percent to $1.17 billion from $1.21 billion in the same quarter last year, but matched fifteen Wall Street analysts' consensus estimate of $1.17 billion.

Sales at commercial systems, which provides aviation electronics systems, products and services to regional aircraft makers and airlines worldwide, increased 7 percent to $563 million from last year.

Meanwhile, sales at government systems, which provides communication and electronic systems, products and services to the U.S. Department of Defense, state and local governments and other government agencies, declined 11 percent to $602 million from a year ago.

Total segment operating margin for the quarter expanded 140 basis points to 22.4 percent from last year's 21.0 percent.

"Although near-term visibility remains difficult as the U.S. Department of Defense incorporates the impacts of sequestration, we see continued strength in our commercial business. Based on our performance to-date, we are increasing our guidance for earnings per share and operating cash flow toward the high end of our previous range," Jones added.

Looking ahead to fiscal 2013, Rockwell Collins narrowed its earnings guidance range to $4.55 to $4.60 per share from the prior range of $4.45 to $4.65 per share. The company also now anticipated revenue of about $4.65 billion, compared to the previous outlook between $4.8 billion and $4.7 billion.

Street is currently looking for full-year 2013 earnings of $4.58 per share, on annual revenues of $4.62 billion.

COL closed Thursday's regular trading session at $68.52, up $0.21 on a volume of 0.74 million shares.