US aviation electronics supplier Rockwell Collins Inc reported a lower-than-expected quarterly profit on Friday, hurt by weaker defence sales, and its shares fell more than 3 percent. Rockwell Collins is counting on commercial demand to fuel growth as the United States pares defense spending. In the fiscal year that just ended, its sales were roughly 52 percent government-related and 48 percent commercial. Weakness in business jets has also weighed on results.
"Our end markets in defense and the light end of business aviation remain near the bottom of their cycles," Kelly Ortberg, who became chief executive officer earlier this year, said during a conference call. Also, gridlock in budget talks in Washington has slowed decision-making. US defence companies are having difficulty as the Pentagon's acquisition programs are cancelled or delayed.
"The political environment in the US is making it increasingly difficult to plan our business as no one knows what the next round in negotiations will yield," Ortberg added. Net income rose 15 percent to $175 million, or $1.28 a share, in the fourth quarter ended September 30 from $152 million, or $1.06 a share, a year earlier, when there was a higher share count. Analysts on average expected $1.31 a share, according to Thomson Reuters I/B/E/S. Sales fell 1 percent to $1.25 billion. Commercial system sales rose 3 percent, while government-related sales dropped 5 percent.
Comments
Comments are closed.