Rockwell Collins, Inc. : Rockwell Collins Sees Fiscal 2013 Missing Street Views
09/21/2012| 08:05am US/Eastern
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Rockwell Collins Inc. (COL) expects to fall short of consensus estimates for fiscal-2013 results due to required cuts to the U.S. defense budget, beginning Jan. 2.
The company, which makes cockpit systems and communications equipment, has seen profits at its government-systems segment weaken amid uncertainty about U.S. defense spending.
Rockwell estimated fiscal-2013 earnings at $4.30 to $4.50 a share on revenue of between $4.6 billion and $4.7 billion, while analysts surveyed by Thomson Reuters were expecting $4.62 a share on revenue of $4.87 billion.
"Given the legal requirements set forth in the Budget Control Act of 2011 and the challenges facing the U.S. Congress for the balance of this year, it is more than reasonable to assume sequestration [automatic budget reduction] impacts will occur and we have incorporated what we believe them to be in our fiscal-year 2013 guidance," said Chairman and Chief Executive Clay Jones.
The company predicted that government-systems revenue--its largest top-line contributor--will decrease by about 10% from the year ending in September, with about half of the year-over-year decline resulting from the impact of automatic U.S. budget cuts.
In July, Rockwell reported its fiscal third-quarter profit rose 5% as government systems and commercial sales edged higher. But the company lowered its fiscal-2012 sales guidance to roughly $4.8 billion.
Shares closed Thursday at $52.39 and were inactive premarket. The stock has fallen 5.4% so far this year.
Write to Melodie Warner at melodie.warner@dowjones.com.
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