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Actionable news in COL: ROCKWELL COLLINS Inc,

Said Rockwell Collins Chief Executive Officer And President, Kelly Ortberg

The following excerpt is from the company's SEC filing.

"I’m encouraged by the progress we are making in all of these businesses, and I expect market conditions will support continued growth in fiscal year 2016."

Ortberg continued, “However, this is not the case in business aviation where we continue to experience weak market conditions. At this time, we don’t expect to see these conditions improve significantly in the next year so we are re-setting our near-term expectations for that business. Our fiscal year 2016 guidance incorporates the previously announced production rate reduction on the Global 5000/6000 aircraft. In addition, we have assumed addition al rate reductions in both the mid-size and light segments of the business jet market in our guidance. The resulting effect is that we now expect our overall Business and Regional jet OEM sales to decrease low-double digits from fiscal year 2015. In addition, we expect Business and Regional jet aftermarket sales to continue growing at a fairly modest level, similar to what we’ve seen in fiscal year 2015."

"While the decline in business aviation will make for a challenging year for our Commercial Systems business, we remain focused on executing the business to drive long-term growth in both operating margin and cash flow. We will be taking action through the first half of fiscal year 2016 to right-size our business to these new market conditions," said Ortberg.

Details related to the projected performance of the company’s businesses for fiscal year 2016 are as follows:

Commercial Systems provides aviation electronics systems, products and services to air transport, business and regional aircraft manufacturers and airlines worldwide. Commercial Systems fiscal year 2016 revenue is expected to increase low-single digits when compared with 2015.

Air Transport Aviation Electronics

Air Transport aviation electronics sales are expected to grow high-single digits. Sales growth will be paced by higher deliveries of A350 and 787 aircraft to support their projected production ramps, higher inorganic revenues related to business acquisitions, higher customer-funded development program sales, and higher aftermarket service and support sales. These areas of growth will be partially offset by lower A330 sales due to OEM rate reductions and lower regulatory mandate sales.

Business & Regional Aviation Electronics

Business & regional aviation electronics sales are expected to decrease mid-single digits. Sales will decline primarily due to lower production rates of the Global 5000/6000 as well as the expectation of production cuts on other business jet platforms, partially offset by increases for the CSeries and Legacy 450/500 production ramps and higher aftermarket service and support and cabin retrofit sales.

Wide-body IFE

Sales of wide-body in-flight entertainment products and services are expected to decrease by about 35%, or approximately $20 million, due to the company’s decision to cease investing in this product area.

Government Systems

Government Systems provides avionics, communication and navigation products, and surface solutions to the U.S. Department of Defense, state and local governments, other government agencies, civil agencies, defense contractors and foreign ministries of defense around the world. Government Systems fiscal year 2016 revenue is expected to be up low-single digits when compared to 2015, driven primarily by an increase in international sales. U.S. defense sales are expected to be about flat due to the continuing impacts of...


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