Rockwell Collins Inc. (COL), the supplier of avionics and military equipment, recently reported dismal first-quarter 2010 results. Although, quarterly earnings of 76 cents per share topped the Zacks Consensus Estimate of 73 cents, it fell 20% from 95 cents delivered in the prior-year quarter.
Rockwell’s total sales dipped 3% year-over-year to $1,027 million due to sustained weakness experienced in the business jet market, fall in commercial aerospace aftermarket revenue, and lower sales registered across Defense Advance GPS Receivers.
Despite a low single-digit fall in the top-line and a double-digit decline in the bottom-line, Rockwell reiterated its earnings guidance range of $3.35 to $3.55 for fiscal year 2010. The company expects total sales between $4.6 billion and $4.8 billion.
By segment, Government Systems sales climbed 7% to $616 million. Airborne Solutions’ sales increased 2% to $410 million, whereas Surface Solutions’ sales rose 20% to $206 million.
Operating earnings for Government Systems, which provide communication and electronic systems, fell 4% to $134 million, whereas operating margin shrank 260 basis points to 21.8% reflecting a rise in pension and research and development costs, partly offset by growth in sales.
Commercial Systems revenue slipped 15% to $411 million. By product category, aircraft OEMs sales fell 18% to $201 million, reflecting fall in production rates at business jet OEMs. Aftermarket sales dropped 12% to $192 million mainly due to a fall in aftermarket hardware sales. Wide-body in-flight entertainment products and systems sales also dipped 14% to $18 million.
Operating earnings for Commercial Systems, which provides aviation electronics systems, plunged 30% to $68 million, whereas operating margin contracted 350 basis points to 16.5% due to lower sales and higher pension expense, partly offset by a fall in research and development costs.
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