CEDAR RAPIDS, Iowa - For the second quarter of FY 2014 ended March 31, Rockwell Collins reported that were up 12 percent to $1.27 billion, compared to $1.13 billion in the second quarter of 2013. The increase was primarily due to the acquisition of ARINC which contributed $137 million to sales. Second quarter fiscal year 2014 net income was $147 million compared to net income of $161 million in the second quarter of last year.

"These strong second quarter financial results, including 12% sales growth and 20% total segment operating margins, support our plan to accelerate growth and increase shareowner value," said Rockwell Collins Chief Executive Officer, Kelly Ortberg. "Share gains from new OEM programs, expanding international sales, and growth in our new Information Management Services business more than offset anticipated declines in business aviation and defense. As we look forward, we expect to convert our sales growth into even higher levels of earnings and cash flow generation as we leverage our proven operating model."

While the company deals with the cuts in its government markets, Rockwell Collins has made a major push into flight support services, bolstering its commercial operations. As the complexity of managing flights for small aircraft has grown, the market for flight support services has likewise entered a boom period.

Commercial Systems

Commercial Systems, which provides aviation systems, products and services to air transport, business and regional aircraft manufacturers and airlines worldwide, reported sales of $556 million compared to $542 million a year prior. Operating income for the period was $127 million (2013: $116 million).

During the period, sales to aircraft original equipment manufacturers increased due to higher hardware delivery rates for the Boeing 787 aircraft partially offset by lower deliveries to light business jet manufacturers. Aftermarket sales increased primarily due to higher service and support activities and higher regulatory airspace mandates. Operating earnings and margin increased due to incremental earnings from the higher sales volume as well as the benefit of lower company-funded research & development expenses and cost savings initiatives.

Government Systems

Government Systems provides a broad range of products, systems and services to customers including the U.S. Department of Defense, other government agencies, civil agencies, defense contractors and ministries of defense around the world. The unit reported that sales fell two percent to $567 million for the quarter compared to $578 million a year ago. Operating earnings were $109 million for the quarter compared to $112 million a year ago.

Avionics sales increased primarily due to higher hardware deliveries and installations for the E-6B aircraft upgrade program as well as hardware deliveries for international programs, partially offset by lower KC-46 and KC-10 development program sales. Communication product sales declined due to lower satellite communication sales as fewer terminals were delivered and service revenues declined as troop deployments wind down in the Middle East. Operating earnings and margin decreased slightly due to the impact of lower sales volume.

Source: Rockwell Collins Posts Second Quarter 2014 Results
Associated URL: http://rockwellcollins.com/
Author: R. Pettibone, Gov't & Industry