Displays 777X Touchscreens from Rockwell Collins
The second quarter of fiscal year 2017 has been a good one for Rockwell Collins. The company reported a 2% increase in reported sales compared to the same quarter last year, at $1.34 billion.
"The operating performance of our business through the first half of 2017 has been very good,” said Kelly Ortberg, Rockwell Collins chairman, president and CEO. Collins explained that growth in the company's government systems, information management services and air transport businesses were "partially offset by sales headwinds from lower business jet OEM deliveries. Operating margins grew 30 basis points over last year as we continued to realize the benefit of cost saving initiatives across all of our businesses."
The company has also released adjusted full-year fiscal 2017 financial guidance, following the completed acquisition of B/E Aerospace:
- Sales are now expected to be in the range of $6.7 billion to $6.8 billion (from $5.3 billion to $5.4 billion). Interior systems (formerly B/E Aerospace) sales are estimated to be about $1.4 billion.
- GAAP earnings per share are expected to be in the range of $4.50 to $4.70. Earnings per share adjusted for B/E Aerospace acquisition-related expenses and total combined company acquisition-related intangible asset amortization is expected to be in the range of $5.95 to $6.15 (see the supplemental schedule included in this press release for a reconciliation of adjusted earnings per share).
- Free cash flow is now expected to be in the range of $650 million to $750 million (from $600 million to $700 million).
In commercial systems, Rockwell Collins’ Q2 2017 showed a decrease in total sales at $594 million and an increase in operating earnings at $132 million when compared to Q2 2016.
Original equipment sales: $337 million, down from $353 million in Q2 2016
“Original equipment sales decreased due to lower business aircraft OEM production rates, partially offset by higher product deliveries in support of Airbus A350 rate increases and favorable customer timing for airline selectable equipment,” the company said.
Aftermarket sales: $253 million, up from $248 million in Q2 2016
“Aftermarket sales increased due to higher regulatory mandate sales, partially offset by lower spares provisioning for Boeing 787 aircraft,” the company said.
Wide-body in-flight entertainment: $4 million, down from $10 million in Q2 2016
In government systems, Rockwell Collins’ Q2 2017 showed an increase in total sales at $565 million and an increase in operating earnings at $112 million when compared to Q2 2016.
Avionics: $367 million, up from $357 million in Q2 2016
“Avionics sales increased due to higher simulation and training program revenues and higher fixed-wing development program sales, partially offset by the wind-down of legacy tanker hardware deliveries,” the company said.
Communication and navigation: $198 million, up from $181 million in Q2 of 2016
“Communication and navigation sales increased due to higher data link program sales and higher deliveries of GPS-related products,” the company said.
In information management systems, Rockwell Collins’ Q2 2017 showed an increase in total sales at $183 million and an increase in operating earnings at $36 million when compared to Q2 2016.
“[Management system] sales increased due to double-digit sales growth in aviation-related revenues driven by increased usage of connectivity services and the timing of certain connectivity-related equipment deliveries. In addition, non-aviation revenues increased double-digits due primarily to the timing of higher equipment sales for nuclear security programs. [Information management system] operating earnings and operating margin increased due to higher sales volume,” the company said.
Rockwell Collins said its business highlights included:
- Being named as a 2017 World's Most Ethical Company by the Ethisphere Institute for an eighth straight year
- Being selected by the U.S. Navy, along with Leonardo DRS, to field its Tactical Combat Training System Increment II solution
- The Pakistan Air Force selecting Flight 2 for Lockheed 11 C-130E and five C-130B aircraft upgrades.
- Being awarded a contract to provide the U.S. Defense Dept. a cross-platform data link capability for mobile devices
- Being selected by Thales to upgrade Hawkei Protected Mobility Vehicle-Light system
- When Asiana Airlines and Air Busan selected the company’s ARINC MultiLink aircraft tracking service for their fleets
- Expanding its global aircraft observation weather program through new agreement with LATAM Airlines