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Rockwell’s profits decline slightly on lower commercial sales


Cedar Rapids-based Rockwell Collins Inc.’s profits fell 2 percent in its latest fiscal quarter as sales declines in its commercial systems more than offset an increase in its government systems.

Net income for the quarter ended March 31 was $164 million, or $1.03 per share, compared with $168 million, or $1.03 per share, a year ago. Total sales were down 4 percent to $1.1 billion. Business acquisitions contributed $12 million to total revenues.

Sales of government communication and electronic systems, products and services rose 6 percent to $613 million. The Athena Technologies Inc. and SEOS Group Ltd. acquisitions contributed $10 million, or 2 percentage points. The segment’s operating earnings rose 26 percent on operating margins of 23.7 percent due to higher sales and lower employee incentive compensation costs.

Sales of aviation electronics systems, products and services to businesses declined 14 percent to $525 million. Operating earnings were down 21 percent on margins of 21 percent as a result of lower sales volumes and the absence of royalty income that benefited the prior-year quarter, which was partially offset by lower employee incentive compensation costs and research and development costs.

Rockwell lowered its outlook for 2009, expecting a weak global economy, scarce aircraft financing, high levels of used jet inventories and cutbacks by airlines hit by declines in cargo and premium passenger traffic. It expects sales of $4.5 billion, with commercial systems sales declining 18 percent and government systems sales rising 8 percent. It expects earnings per share of $3.70 to $3.90, down from previous predictions of $4.10 to $4.30.

During the quarter, the company paid down $56 million of its debt obligations and paid dividends totaling $38 million.

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