Rockwell Collins Earnings: Streak of Two Straight Profit Rises Snapped

S&P 500 (NYSE:SPY) component Rockwell Collins Inc. (NYSE:COL) reported its results for the fourth 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. fell to $152 million ($1.06 per share) vs. $175 million ($1.13 per share) a year earlier. This is a decline of 13.1% from the year-earlier quarter.

Revenue: Fell 2.3% to $1.27 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Rockwell Collins Inc. fell short of the mean analyst estimate of $1.09 per share. It beat the average revenue estimate of $1.24 billion.

Quoting Management: “Market conditions in fiscal year 2012 were very challenging as customer bankruptcies, slower global economic recovery, and multiple defense order delays and cutbacks impacted our revenue growth,” said Rockwell Collins Chairman and Chief Executive Officer Clay Jones. “However, I am extremely pleased with the way our people managed all our businesses through these unpredictable events. With a slight decline in sales, we were still able to achieve improved profitability through operating margin expansion of 260 basis points.”

Key Stats:

Last quarter’s profit decrease ends a two-quarter streak of year-over-year profit increases. Net income rose 5.1% in the third quarter and 7.3% in the second quarter.

The company has now fallen short of estimates in the last two quarters. In the third quarter, it missed expectations by one cent with net income of $1.14 versus a mean estimate of net income of $1.15 per share.

Revenue fell last quarter after seeing a rise the quarter before. Revenue rose 1.3% to $1.21 billion in the third quarter from the year earlier.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from $1.02 a share to 99 cents over the last ninety days. For the fiscal year, the average estimate has moved down from $4.40 a share to $4.20 over the last ninety days.

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

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