Rockwell Collins Inc. Earnings: Snaps Strong Streak with Profit Drop

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

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Rockwell Collins Earnings Cheat Sheet for the First Quarter.

Results: Net income for Rockwell Collins Inc. fell to $130 million (86 cents per share) vs. $151 million (96 cents per share) a year earlier. This is a decline of 13.9% from the year earlier quarter.

Revenue: Fell 1.4% to $1.09 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: COL fell in line with the mean analyst estimate of 86 cents per share. Analysts were expecting revenue of $1.09 billion.

Quoting Management: “First quarter sales were in-line with our expectations as continued growth in Commercial Systems nearly offset the decline in Government Systems,” said Rockwell Collins Chairman, President and Chief Executive Officer, Clay Jones. “Our focus on improved operating performance enabled Government Systems to maintain 20% operating margins despite a 10% decline in sales, while Commercial Systems margins expanded by 170 basis points. This resulted in an increase to total segment operating earnings even as sales declined modestly. Additionally, we exercised some of our balance sheet flexibility this quarter through more aggressive share repurchases, which reduced the outstanding share count by more than 4%, returning significant value to our shareowners.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the fourth quarter of the last fiscal year, net income rose 16.7% from the year earlier, while the figure increased 11.3% in the third quarter of the last fiscal year, 1.4% in the second quarter of the last fiscal year and 24.8% in the first quarter of the last fiscal year.

The company fell in line with estimates last quarter after missing the mark in the previous two quarters. In the fourth quarter of the last fiscal year, it fell short by 12 cents, and in the third quarter of the last fiscal year, it missed by 3 cents.

Revenue fell last quarter after seeing a rise the quarter before. Revenue rose 1.1% to $1.3 billion in the fourth quarter of the last fiscal year from the year earlier.

Looking Forward: Over the past ninety days, the average estimate for the second quarter has fallen from $1.08 per share to $1.04, indicating that analysts are growing pessisimistic about the company’s performance next quarter. For the fiscal year, the average estimate has moved down from $4.52 a share to $4.45 over the last ninety days.

Competitors to Watch: The Boeing Company (NYSE:BA), Honeywell Intl. Inc. (NYSE:HON), BAE Systems PLC (BAESY), General Dynamics Corp. (NYSE:GD), Elbit Systems Ltd. (NASDAQ:ESLT), L-3 Communications Hldgs., Inc. (NYSE:LLL), Northrop Grumman Corp. (NYSE:NOC), Raytheon Company (NYSE:RTN), LMI Aerospace, Inc. (NASDAQ:LMIA), and Innovative Solutions & Support Inc (NASDAQ:ISSC).

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

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com