Rockwell Collins Inc. reported results for first-quarter fiscal 2018 (ended Dec 31, 2017). The company’s adjusted earnings per share of $1.59 beat the Zacks Consensus Estimate of $1.53 by 3.9%. Reported earnings grew 30.3% from $1.22 a year ago.
Excluding one-time adjustments, the company’s earnings of $1.69 per share reflected a year-over-year improvement of 53.6%.
The year-over-year bottom-line growth was primarily driven by a tax benefit of 37 cents on account of the recent Tax Cuts and Jobs Act.
Revenues
In the reported quarter, Rockwell Collins’ total sales were $2,011 million, which beat the Zacks Consensus Estimate of $1,988 million by 1.2%. Revenues grew 69% year over year, driven by higher sales at Commercial Systems, Government Systems and Information Management Services segments.
Excluding revenues worth $716 million from the acquisition of B/E Aerospace, the company witnessed 9% organic sales growth.
Operational Highlights
Total segment operating income during the quarter was $371 million, up 47.8% from $251 million in the year-ago quarter.
Rockwell Collins’ total research and development investment (including increase in pre-production engineering costs) was $318 million, up 51.4%. The figure represented 15.8% of total sales compared with 17.6% in the year-ago quarter.
Interest expense during the quarter was $64 million compared with $20 million in the year-ago quarter.
Segment Performance
Commercial Systems: In the quarter under review, sales of $608 million were up 11% year over year owing to higher original equipment and aftermarket sales.
Operating earnings for the quarter were $139 million compared with $125 million in the year-ago quarter. Consequently, operating margin expanded 10 basis points (bps) to 22.9%.
Government Systems: The segment reported sales of $573 million, up 21% on the back of higher communication and navigation as well as avionics revenues.
Operating earnings for the quarter were $109 million, up 14% from $96 million in the year-ago quarter. However, operating margin contracted 120 bps to 19%.
Information Management Services: Segment sales were $174 million, up 3% from $169 million in the year-ago quarter, backed by growth in aviation related revenues.
Operating earnings for the quarter were $29 million, down from $30 million in the year-ago period. Operating margin was 16.7% compared with 17.8% a year ago. The downside was caused by asset disposition and customer bankruptcy costs.
Financial Condition
As of Dec 31, 2017, Rockwell Collins’ cash and cash equivalents were $583 million compared with $703 million as of Sep 30, 2017.
Long-term debt (net) was $6,498 million as of Dec 31, 2017, up from $6.676 million as of Sep 30, 2017.
Cash used for operating activities at the end of the quarter was $259 million, compared with 101 million in the prior-year quarter.
Zacks Rank
Rockwell Collins currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Rockwell Collins Inc. reported results for first-quarter fiscal 2018 (ended Dec 31, 2017). The company’s adjusted earnings per share of $1.59 beat the Zacks Consensus Estimate of $1.53 by 3.9%. Reported earnings grew 30.3% from $1.22 a year ago.
Excluding one-time adjustments, the company’s earnings of $1.69 per share reflected a year-over-year improvement of 53.6%.
The year-over-year bottom-line growth was primarily driven by a tax benefit of 37 cents on account of the recent Tax Cuts and Jobs Act.
Revenues
In the reported quarter, Rockwell Collins’ total sales were $2,011 million, which beat the Zacks Consensus Estimate of $1,988 million by 1.2%. Revenues grew 69% year over year, driven by higher sales at Commercial Systems, Government Systems and Information Management Services segments.
Excluding revenues worth $716 million from the acquisition of B/E Aerospace, the company witnessed 9% organic sales growth.
Operational Highlights
Total segment operating income during the quarter was $371 million, up 47.8% from $251 million in the year-ago quarter.
Rockwell Collins’ total research and development investment (including increase in pre-production engineering costs) was $318 million, up 51.4%. The figure represented 15.8% of total sales compared with 17.6% in the year-ago quarter.
Interest expense during the quarter was $64 million compared with $20 million in the year-ago quarter.
Segment Performance
Commercial Systems: In the quarter under review, sales of $608 million were up 11% year over year owing to higher original equipment and aftermarket sales.
Operating earnings for the quarter were $139 million compared with $125 million in the year-ago quarter. Consequently, operating margin expanded 10 basis points (bps) to 22.9%.
Government Systems: The segment reported sales of $573 million, up 21% on the back of higher communication and navigation as well as avionics revenues.
Operating earnings for the quarter were $109 million, up 14% from $96 million in the year-ago quarter. However, operating margin contracted 120 bps to 19%.
Information Management Services: Segment sales were $174 million, up 3% from $169 million in the year-ago quarter, backed by growth in aviation related revenues.
Operating earnings for the quarter were $29 million, down from $30 million in the year-ago period. Operating margin was 16.7% compared with 17.8% a year ago. The downside was caused by asset disposition and customer bankruptcy costs.
Financial Condition
As of Dec 31, 2017, Rockwell Collins’ cash and cash equivalents were $583 million compared with $703 million as of Sep 30, 2017.
Long-term debt (net) was $6,498 million as of Dec 31, 2017, up from $6.676 million as of Sep 30, 2017.
Cash used for operating activities at the end of the quarter was $259 million, compared with 101 million in the prior-year quarter.
Zacks Rank
Rockwell Collins currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Press Release
Raytheon Company reported fourth-quarter 2017 adjusted earnings from continuing operations of $2.03 per share, beating the Zacks Consensus Estimate of $2.02 by 0.5%. The company’s fourth-quarter revenues of $6,783 million improved 8% year over year.
General Dynamics Corp. (GD - Free Report) reported fourth-quarter 2017 earnings from continuing operations of $2.50 per share, beating the Zacks Consensus Estimate of $2.37 by 5.5%. However, total revenues of $8,277 million missed the Zacks Consensus Estimate of $8,437 million by 1.9%.
L3 Technologies posted fourth-quarter 2017 adjusted earnings of $2.35 per share from continuing operations, surpassing the Zacks Consensus Estimate of $2.30 by 2.2%. Total revenues of $2.57 billion beat the Zacks Consensus Estimate of $2.55 billion by 1.1%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
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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