Rockwell Collins earnings up 34 percent

Wednesday, April 27th 2005, 11:10 am

By: News On 6

IOWA CITY, Iowa (AP) _ Rockwell Collins Inc., a maker of avionics, sophisticated cockpit radios and navigation systems, said Wednesday its second-quarter earnings soared 34 percent on steady military sales and the recovery of the commercial air industry.

The Cedar Rapids-based company said it earned $95 million in the quarter.

It reported second-quarter sales of $829 million, up 15 percent from a year ago, and earnings per share of 52 cents, also an increase of 13 cents from second quarter 2004.

Clay Jones, president and CEO, attributed the strong performance to steady military sales and the ongoing recovery of the commercial air industry after the Sept. 11, 2001, terrorist attacks.

``We're taking full advantage of the favorable business conditions that are occurring right now in both markets,'' Jones said. ``In the commercial markets, we're seeing now the start of full recovery, with Boeing and Airbus (SAS) beginning to produce more aircraft, and that has not been the case the last three years.''

Both jet makers announced orders for new jets this month that executives said signaled the end of several years of static production in the industry. Boeing Co. announced this week orders of 50 new jets from Air India and 32 from Air Canada.

``That's very encouraging for us as we see a continued strength in the commercial markets that we serve. We think that will continue for several years from now,'' Jones said.

Rockwell Collins' commercial division, which manufactures cockpit, in-flight entertainment and cabin systems for passenger and business jets, had second-quarter sales of $403 million, up $61 million from a year ago. Jones said the increase also was driven by strong aftermarket sales, such as service and maintenance, and increasing demand for products for new business jet sales.

In the government division, the company reported sales of $426 million, up from $377 million in the same three months last year. That figure includes a 21 percent increase in sales of defense electronic products due to upgrades of fixed wing aircraft and helicopters for the U.S. Army, Navy and Special Operations.

Second quarter results also reflect Rockwell Collins' $94 million acquisition of Teldix GmbH, a German maker of military aviation electronics. The company has more than 400 employees and gives Rockwell Collins its first holding in Germany and its first manufacturing base in Europe.

Strong performance in the first and second quarters prompted the company to boost its projected sales for the year. Executives set a sales goal of $3.2 billion to start the fiscal year, but have moved targets up to between $3.35 billion and $3.4 billion.

The company also repurchased 1.7 million shares of its common stock, valued at $79 million, during the second quarter.