Rockwell Collins Inc. reported financial results for second-quarter fiscal 2017 (ended Mar 31, 2017). The company’s adjusted earnings per share of $1.34 surpassed the Zacks Consensus Estimate of $1.31 by 2.3%. Reported earnings also grew 3.1% from $1.30 per share earned a year ago.
Revenues
In the fiscal second quarter, Rockwell Collins’ total sales were $1,342 million, which beat the Zacks Consensus Estimate of $1,330 million by 0.9%. Revenues also grew 2.4% year over year on higher sales at Government Systems and Information Management Services.
Operational Highlights
Total segment operating income during the quarter was $282 million, up 3.7% from $272 million in the year-ago quarter.
Operating margin during the quarter expanded 30 basis points (bps) year over year to 21%.
Rockwell Collins’ total research and development investment (including the increase in pre-production engineering costs) was $255 million, up 5.4%. The figure represented 19% of total quarterly sales compared with 18.5% in the year-ago period.
Segment Performance
Commercial Systems: In the quarter under review, segmental sales of $594 million were down 2.8% year over year, primarily due lower business aircraft OEM production rates.
Operating earnings for the quarter were $132 million compared with $135 in the year-ago quarter. Operating margin expanded 10 bps to 22.2%.
Government Systems: The segment reported sales of $565 million, up 5% on the back of higher simulation and training program revenues, and higher fixed-wing platform revenues.
Operating earnings for the quarter were $114 million, up 5.6% from $108 million in the year-ago period. Operating margin expanded 10 bps to 20.2% primarily driven by higher sales volume and cost-saving initiatives.
Information Management Services: Segment sales were $183 million, up from $162 million in the year-ago period on the back of double-digit growth in aviation-related sales.
Operating earnings for the quarter were $36 million, up from $29 million in the year-ago period. Operating margin was 19.7% compared with 17.9% a year ago. The increase was primarily due to higher sales volume.
Financial Condition
As of Mar 31, 2017, Rockwell Collins’ cash and cash equivalents were $281 million compared with $340 million as of Sep 30, 2016.
Long-term debt (net) was $1,354 million as of Mar 31, 2017, down from $1,374 million as of Sep 30, 2016.
Cash used for operating activities in the first six months of fiscal 2017 was $1 million, compared with $45 million a year ago.
Fiscal 2017 Guidance
Adjusted earnings per share are expected in the range of $5.95–$6.15.
The company has increased its fiscal 2017 revenue guidance in the range of $6.7–$6.8 billion compared to the prior guidance of $5.3–$5.4 billion.
Total segment operating margin is now expected to be in the band of 19%–20% compared with the previous guidance of 21%.
The company expects free cash flow in the range of $650−$750 million compared with previous guided range of $600−$700 million. Its R&D expenditure guidance is projected in the $1.05−$1.15 billion band, up from the prior $900−$950 million band.
The full-year tax rate is anticipated to be in the range of 27%–28% compared with 28%–29% guided earlier.
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.
Upcoming Peer Releases
Raytheon Company is scheduled to release first-quarter 2017 earnings on Apr 27. This Zacks Rank #3 company’s Zacks Consensus Estimate is pegged at $1.60.
Spirit AeroSystems Holdings, Inc. (SPR - Free Report) , another Zacks Rank #3 stock, is scheduled to release first-quarter earnings on May 5. The Zacks Consensus Estimate is pegged at $1.16.
Triumph Group, Inc. (TGI - Free Report) is expected to release first-quarter earnings on May 3. Its Zacks Consensus Estimate is pegged at $1.60. This company also carries a Zacks Rank #3.
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Rockwell Collins Inc. reported financial results for second-quarter fiscal 2017 (ended Mar 31, 2017). The company’s adjusted earnings per share of $1.34 surpassed the Zacks Consensus Estimate of $1.31 by 2.3%. Reported earnings also grew 3.1% from $1.30 per share earned a year ago.
Revenues
In the fiscal second quarter, Rockwell Collins’ total sales were $1,342 million, which beat the Zacks Consensus Estimate of $1,330 million by 0.9%. Revenues also grew 2.4% year over year on higher sales at Government Systems and Information Management Services.
Operational Highlights
Total segment operating income during the quarter was $282 million, up 3.7% from $272 million in the year-ago quarter.
Operating margin during the quarter expanded 30 basis points (bps) year over year to 21%.
Rockwell Collins’ total research and development investment (including the increase in pre-production engineering costs) was $255 million, up 5.4%. The figure represented 19% of total quarterly sales compared with 18.5% in the year-ago period.
Segment Performance
Commercial Systems: In the quarter under review, segmental sales of $594 million were down 2.8% year over year, primarily due lower business aircraft OEM production rates.
Operating earnings for the quarter were $132 million compared with $135 in the year-ago quarter. Operating margin expanded 10 bps to 22.2%.
Government Systems: The segment reported sales of $565 million, up 5% on the back of higher simulation and training program revenues, and higher fixed-wing platform revenues.
Operating earnings for the quarter were $114 million, up 5.6% from $108 million in the year-ago period. Operating margin expanded 10 bps to 20.2% primarily driven by higher sales volume and cost-saving initiatives.
Information Management Services: Segment sales were $183 million, up from $162 million in the year-ago period on the back of double-digit growth in aviation-related sales.
Operating earnings for the quarter were $36 million, up from $29 million in the year-ago period. Operating margin was 19.7% compared with 17.9% a year ago. The increase was primarily due to higher sales volume.
Financial Condition
As of Mar 31, 2017, Rockwell Collins’ cash and cash equivalents were $281 million compared with $340 million as of Sep 30, 2016.
Long-term debt (net) was $1,354 million as of Mar 31, 2017, down from $1,374 million as of Sep 30, 2016.
Cash used for operating activities in the first six months of fiscal 2017 was $1 million, compared with $45 million a year ago.
Fiscal 2017 Guidance
Adjusted earnings per share are expected in the range of $5.95–$6.15.
The company has increased its fiscal 2017 revenue guidance in the range of $6.7–$6.8 billion compared to the prior guidance of $5.3–$5.4 billion.
Total segment operating margin is now expected to be in the band of 19%–20% compared with the previous guidance of 21%.
The company expects free cash flow in the range of $650−$750 million compared with previous guided range of $600−$700 million. Its R&D expenditure guidance is projected in the $1.05−$1.15 billion band, up from the prior $900−$950 million band.
The full-year tax rate is anticipated to be in the range of 27%–28% compared with 28%–29% guided earlier.
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.
Upcoming Peer Releases
Raytheon Company is scheduled to release first-quarter 2017 earnings on Apr 27. This Zacks Rank #3 company’s Zacks Consensus Estimate is pegged at $1.60.
Spirit AeroSystems Holdings, Inc. (SPR - Free Report) , another Zacks Rank #3 stock, is scheduled to release first-quarter earnings on May 5. The Zacks Consensus Estimate is pegged at $1.16.
Triumph Group, Inc. (TGI - Free Report) is expected to release first-quarter earnings on May 3. Its Zacks Consensus Estimate is pegged at $1.60. This company also carries a Zacks Rank #3.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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