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Actionable news in COL: ROCKWELL COLLINS Inc,

Rockwell: Cedar Rapids, Iowa (October 30, 2015)

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

- Rockwell Collins, Inc. (NYSE: COL) today reported fiscal year 2015 sales were $5.24 billion, a 5% increase from fiscal year 2014. Fiscal year 2015 earnings per share from continuing operations was $5.19 compared to $4.52 in the prior year. Cash provided by operating activities from continuing operations totaled $749 million in 2015, an increase of $89 million, or 13%, compared to the $660 million in fiscal year 2014.

Fourth quarter fiscal year 2015 earnings per share from continuing operations increased 9% to $1.38, compared to $1.27 in the prior year. Total sales for the fourth quarter of fiscal ye ar 2015 were $1.38 billion, a 1% decrease from the same period in fiscal year 2014. Total segment operating margin for the fourth quarter was 22.0% compared to 21.3% in the prior year and total segment operating earnings increased 2% to $304 million, compared to the same period in fiscal year 2014.

"I'm pleased with our overall performance for the year, highlighted by double-digit earnings per share and cash flow growth. We were able to perform to our expectations for the year in spite of a weaker than expected commercial aftermarket and the negative impact of foreign currency rates," said Rockwell Collins Chief Executive Officer and President, Kelly Ortberg. “Our team did a great job of delivering strong operating performance, allowing us to continue investing in long-term growth. During the year we invested almost $1 billion in R&D and made two acquisitions that strengthen our portfolio of connectivity-related offerings."

Ortberg continued, "As we enter fiscal year 2016, we are sharply focused on meeting our commitments to our customers, including executing on a number of important development programs that are expected to drive growth over the balance of the decade. While growth in 2016 will be muted particularly in the first half of the fiscal year, I remain confident our strategies will drive long-term double-digit growth in earnings and cash flow."

Following is a discussion of fiscal year 2015 fourth quarter sales and earnings for each business segment.

Commercial Systems

Commercial Systems, which provides aviation electronics systems, products and services to air transport, business and regional aircraft manufacturers and airlines worldwide, achieved 2015 fourth quarter results as summarized below.

(dollars in millions)

Q4 FY15

Q4 FY14


Commercial Systems sales

Original equipment


Wide-body in-flight entertainment

Total Commercial Systems sales

Operating earnings

Operating margin rate

90 bps

Original equipment sales decreased due to lower sales for Chinese regional aircraft OEM programs partially offset by higher deliveries in support of the A350 and Legacy 500 entries into service.

Aftermarket sales increased due to higher regulatory mandate sales, partially offset by lower spares provisioning for the Boeing 787 program.

Operating earnings and operating margin increased primarily due to lower company-funded research and development expense and cost savings initiatives, partially offset by higher employee incentive compensation expense.

Government Systems

Government Systems provides a broad range of electronic products, systems and services to customers including the U.S. Department of Defense, other government agencies, civil agencies, defense contractors and ministries of defense around the world. Results from the fourth quarter of 2015 are summarized below.

Government Systems sales


Communication products

Surface solutions

Navigation products

Total Government Systems sales

(40) bps

Avionics sales increased due to higher tanker/transport hardware deliveries partially offset by lower rotary wing hardware sales.

Communication products sales decreased due to lower Joint Tactical Radio System Manpack sales.

Navigation products sales increased primarily due to development effort on modernized GPS products.

Changes in foreign currency rates, primarily the strengthening of the U.S. dollar, resulted in a $12 million reduction to Government Systems sales for the fourth quarter of fiscal year 2015 when compared to the same quarter in the prior year. The $12 million reduction is included within the Government Systems sales categories above.

Operating earnings and operating margin decreased due to lower sales, higher investment in company-funded research and development expense, and higher employee incentive compensation expense, partially offset by favorable hardware product mix and cost savings initiatives.

Information Management Services

Information Management Services (IMS) provides communication services, systems integration and security solutions across the aviation, airport, rail, transit and nuclear security markets. Results from the fourth quarter of 2015 are summarized below.

Information Management Services sales

410 bps

IMS sales increased primarily due to low double-digit growth in aviation related businesses including GLOBALink

and ARINCDirect

, partially offset by lower sales from the non-aviation related businesses due to the timing of certain airport programs and the exit of a government program.

IMS operating earnings and operating margin increased primarily due to the higher sales volume, a more favorable mix of higher margin aviation related sales, and the absence of certain licensing costs incurred in the prior year.

Cash Flow

Cash provided by operating activities from continuing operations was $749 million in fiscal year 2015, compared to $660 million in fiscal year 2014. The $89 million increase was primarily due to converting the higher earnings in 2015 to cash flow within the year.

The company paid a dividend on its common stock of 33 cents per share, or $44 million, in the fourth quarter of 2015.

Fiscal Year 2016 Outlook

The following table is a summary of the company's financial guidance for fiscal year 2016, which is unchanged from the original issuance on September 18, 2015:

$5.3 billion to $5.4 billion

Total segment operating margins

About 21.0%

Earnings per share

$5.20 to $5.40

Cash flow from operations

$700 million to $800 million

Total research & development investment

About $1 billion

Capital expenditures

About $200 million

Full year income tax rate

About 28%

(1) - Total research and development investment consists of company and customer funded research & development expenditures as well as the net increase in pre-production engineering costs capitalized within inventory.

Conference Call and Webcast Details

Rockwell Collins CEO and President, Kelly Ortberg, and Senior Vice President and CFO, Patrick Allen, will conduct an earnings conference call at 9:00 a.m. Eastern Time on October 30, 2015. Individuals may listen to the call and view management's supporting slide presentation on the Internet at

. Listeners are encouraged to go to the Investor Relations portion of the web site at least 15 minutes prior...