Rockwell Collins [COL] yesterday said its first quarter sales were relatively flat while net income tumbled 14 percent due to a higher tax rate.
Net income in the FY ’12 first quarter was $130 million, 86 cents earnings per share (EPS), versus $151 million (96 cents EPS) a year ago. The drop was due to a higher effective federal tax rate, which could eventually drop if Congress reinstates the research and development tax credit for 2012. Earnings still beat consensus estimates by two cents.
Rockwell Collins’ segment operating income actually nudged up a bit as gains in its commercial avionics business more than offset a decline in operating income from its Government Systems segment, which is mainly focused on defense customers.
Sales in the quarter were off a percent to $1.1 billion, essentially flat with last year, as a 10 percent decline in Government Systems revenue more than offset a 13 percent increase in Commercial Systems revenue.
The decline in government sales was due mainly to a slowdown in deliveries of the Defense Advanced GPS Receiver products, lower sales of the Joint Tactical Radio System Ground Mobile Radio variant, and the loss of revenues from two programs terminated for convenience by the government last year. Rockwell Collins also had high deliveries a year ago that were not repeated in the first quarter of a public safety integration system the company makes for police cars.
Financial guidance for FY ’12 remains intact with sales expected to be between $4.9 billion and $5 billion and EPS between $4.40 and $4.60.