ROCKWELL COLLINS REPORTS 17% DECREASE IN INCOME
30 Jul 09. Rockwell Collins, Inc. (NYSE: COL) today reported net income of $145m for the fiscal year 2009 third quarter ended June 30, 2009, a decrease of $29m, or 17%, from fiscal year 2008 third quarter net income of $174m. Earnings per share was 91 cents, a decrease of 16 cents, or 15%, from earnings per share of $1.07 for the prior year period. Third quarter fiscal year 2009 sales decreased $110m, or 9%, to $1.084bn compared to sales of $1.194bn a year ago. Incremental sales from the acquisitions of DataPath, Inc. and SEOS Group Ltd. contributed $28 m of revenue growth. The organic revenue decline of $138m resulted from continued market weakness in commercial aerospace, partially offset by growth opportunities in the government marketplace.
Cash provided by operating activities for the first nine months of fiscal year 2009 totaled $381m compared to the $310m reported for the same period last year. The increase resulted from working capital improvements as well as lower income tax payments, partially offset by higher pension plan contributions.
“During this time of volatile market conditions we are very focused on effectively managing our business” said Rockwell Collins Chairman, President and Chief Executive Officer Clay Jones. “This was evidenced in our ability to increase cash flow from operations by 23% over last year and to generate total segment operating margins of 21.5% in spite of the overall revenue decline.”
Following is a discussion of fiscal year 2009 third quarter sales and earnings for each business segment.
Government Systems, which provides communication and electronic systems, products and services for airborne and surface applications to the U.S. Department of Defense, other government agencies, civil agencies, defense contractors and foreign ministries of defense, achieved third quarter sales of $651m, an increase of $44m, or 7%, compared to the $607m reported for the same period last year. Incremental sales from the acquisitions of DataPath Inc. and SEOS Group Ltd. contributed a total of $27m, or 4 percentage points of the Government Systems revenue growth.
Airborne solutions’ sales increased $23m, or 5%, to $452m. Incremental sales from the acquisition of SEOS Group Ltd. contributed $4m to Airborne solutions’ revenue growth. Organic sales increased $19m, or 4%, due primarily to higher sales from simulation and training solutions, higher production sales of head-down displays for F-15 aircraft, and higher development program revenues on the Common Range Integrated Instrumentation System (CRIIS) program, which were partially offset by lower revenues from international C-130 upgrade programs. Surface solutions’ sales increased $21m, or 12%, to $199 m. Incremental sales from the acquisition of DataPath, Inc. contributed $23m to Surface solutions’ revenue growth. Organic sales declined $2m as lower sales from Defense Advanced GPS Receiver (DAGR) and Ground-Based GPS Receiver Application Module (GB-GRAM) products were partially offset by higher development revenues on the Joint Precision Approach and Landing System (JPALS) program.
Government Systems’ third quarter operating earnings increased 21% to $158m, resulting in an operating margin of 24.3%, compared to operating earnings of $131m, or an operating margin of 21.6%, for the same period last year. The increase in operating earnings and margin were primarily due to lower employee incentive compensation costs and lower selling, general and administrative expenses.
Commercial Systems, which provides aviation electronics systems, products and services to air transport, business and regional aircraft manufacturers and airlines worldwide, achieved third quarter sales of $433m, a