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Rockwell Collins (COL) Q3 Earnings Miss, Revenues Up Y/Y
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Rockwell Collins Inc. reported financial results for third-quarter fiscal 2018 (ended Jun 30, 2018). The company’s adjusted earnings per share of $1.73 lagged the Zacks Consensus Estimate of $1.89 by 8.5%. Reported earnings, however, grew 5.5% from $1.64 per share a year ago.
Excluding the one-time items, the company reported GAAP earnings per share of $1.66 in the reported quarter, which increased 48.2% from the year-ago figure of $1.12.
Revenues
In the reported quarter, Rockwell Collins’ total sales was $2,208 million, missing the Zacks Consensus Estimate of $2,230 million by 1%. However, revenues grew 5.4% year over year, driven by higher sales across all its segments.
Operational Highlights
Total segment operating income during the quarter was $421 million, up 9.1% from $386 million in the year-ago quarter.
Rockwell Collins’ total research and development investment (including the increase in pre-production engineering costs) was $338 million, up 11.6%. The figure represented 15.3% of total quarterly sales compared with 14.5% in the year-ago period.
Interest expense during the quarter was $66 million compared with $77 million in the year-ago quarter.
Segmental Performance
Commercial Systems: In the quarter under review, segmental sales of $669 million were up 1.7% year over year, primarily owing to higher original equipment sales.
Operating earnings for the quarter were $148 million compared with $144 million in the year-ago quarter. Moreover, operating margin expanded 20 basis points (bps) to 22.1%.
Interior Systems: In the quarter under review, segmental sales of $659 million were up 2% year over year, primarily owing to higher interior products and services.
Operating earnings for the quarter were $106 million compared with $72 million in the year-ago quarter. Moreover, operating margin expanded 500 bps to 16.1%.
Government Systems: The segment reported sales of $684 million, up 12.9% on the back of higher government system sales, avionics as well as communication and navigation revenues.
Operating earnings for the quarter were $130 million, down 0.8% from $131 million in the year-ago period. Operating margin also contracted 260 bps to 19%, primarily due to higher company-funded R&D expense.
Information Management Services: Segment sales were $196 million, up from $183 million in the year-ago period, backed by growth in aviation related revenues.
Operating earnings for the quarter were $37 million, down from $39 million in the year-ago period. Operating margin was also 18.9% compared with 21.3% a year ago. This downside resulted from absence of a favorable resolution of certain international business jet support-service claims in the previous year.
Rockwell Collins, Inc. Price, Consensus and EPS Surprise
Lockheed Martin (LMT - Free Report) reported second-quarter 2018 adjusted earnings of $4.31 per share, beating the Zacks Consensus Estimate of $3.89 by 10.8%.
Textron (TXT - Free Report) reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%. The bottom line also increased 52.6% from 57 cents in the year-ago quarter.
Hexcel Corp. (HXL - Free Report) reported second-quarter 2018 adjusted earnings of 75 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 1.3%. However, the bottom line improved 11.9% from the prior-year figure of 67 cents.
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Rockwell Collins (COL) Q3 Earnings Miss, Revenues Up Y/Y
Rockwell Collins Inc. reported financial results for third-quarter fiscal 2018 (ended Jun 30, 2018). The company’s adjusted earnings per share of $1.73 lagged the Zacks Consensus Estimate of $1.89 by 8.5%. Reported earnings, however, grew 5.5% from $1.64 per share a year ago.
Excluding the one-time items, the company reported GAAP earnings per share of $1.66 in the reported quarter, which increased 48.2% from the year-ago figure of $1.12.
Revenues
In the reported quarter, Rockwell Collins’ total sales was $2,208 million, missing the Zacks Consensus Estimate of $2,230 million by 1%. However, revenues grew 5.4% year over year, driven by higher sales across all its segments.
Operational Highlights
Total segment operating income during the quarter was $421 million, up 9.1% from $386 million in the year-ago quarter.
Rockwell Collins’ total research and development investment (including the increase in pre-production engineering costs) was $338 million, up 11.6%. The figure represented 15.3% of total quarterly sales compared with 14.5% in the year-ago period.
Interest expense during the quarter was $66 million compared with $77 million in the year-ago quarter.
Segmental Performance
Commercial Systems: In the quarter under review, segmental sales of $669 million were up 1.7% year over year, primarily owing to higher original equipment sales.
Operating earnings for the quarter were $148 million compared with $144 million in the year-ago quarter. Moreover, operating margin expanded 20 basis points (bps) to 22.1%.
Interior Systems: In the quarter under review, segmental sales of $659 million were up 2% year over year, primarily owing to higher interior products and services.
Operating earnings for the quarter were $106 million compared with $72 million in the year-ago quarter. Moreover, operating margin expanded 500 bps to 16.1%.
Government Systems: The segment reported sales of $684 million, up 12.9% on the back of higher government system sales, avionics as well as communication and navigation revenues.
Operating earnings for the quarter were $130 million, down 0.8% from $131 million in the year-ago period. Operating margin also contracted 260 bps to 19%, primarily due to higher company-funded R&D expense.
Information Management Services: Segment sales were $196 million, up from $183 million in the year-ago period, backed by growth in aviation related revenues.
Operating earnings for the quarter were $37 million, down from $39 million in the year-ago period. Operating margin was also 18.9% compared with 21.3% a year ago. This downside resulted from absence of a favorable resolution of certain international business jet support-service claims in the previous year.
Rockwell Collins, Inc. Price, Consensus and EPS Surprise
Rockwell Collins, Inc. Price, Consensus and EPS Surprise | Rockwell Collins, Inc. Quote
Financial Condition
As of Jun 30, 2018, Rockwell Collins’ cash and cash equivalents were $621 million compared with $703 million as of Sep 30, 2017.
Long-term debt (net) was $6,317 million as of Jun 30, 2018, down from $6,676 million as of Sep 30, 2017.
Cash provided by operating activities in the first nine months of fiscal 2018 was $196 million, compared with $416 million a year ago.
The company's effective income tax rate on adjusted earnings was 20.7% in the third quarter of 2018 compared to 27.1% in the prior year quarter.
Zacks Rank
Rockwell Collins currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Lockheed Martin (LMT - Free Report) reported second-quarter 2018 adjusted earnings of $4.31 per share, beating the Zacks Consensus Estimate of $3.89 by 10.8%.
Textron (TXT - Free Report) reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%. The bottom line also increased 52.6%
from 57 cents in the year-ago quarter.
Hexcel Corp. (HXL - Free Report) reported second-quarter 2018 adjusted earnings of 75 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 1.3%. However, the bottom line improved 11.9% from the prior-year figure of 67 cents.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>