Photo Contest results, Canadian Coast Guard, Epic Helicopters, USCG Port Angeles, photographer tips, and more!
Rockwell Collins, Inc. has reported sales for the first quarter of fiscal year 2017 of $1.2 billion, a two percent increase from the same period in fiscal year 2016.
First quarter fiscal year 2017 earnings per share from continuing operations increased to $1.10 compared to $1 in the prior year. Earnings per share from continuing operations for the first quarter of fiscal year 2017 includes 10 cents of expenses related to the pending acquisition of B/E Aerospace.
Earnings per share from continuing operations in the first quarter of fiscal year 2016 included a 21 cent restructuring and asset impairment charge partially offset by an 18 cent benefit from the retroactive reinstatement of the Federal Research & Development Tax Credit. Excluding these items, adjusted earnings per share increased 17 percent to $1.20 compared to $1.03 in the prior year.
“I’m pleased to report a very strong quarter of operating performance with total segment margins increasing 90 basis points and adjusted earnings per share growing 17 percent over the prior year,” said Rockwell Collins chairman, president, and chief executive officer, Kelly Ortberg.
“First quarter sales were as anticipated with solid growth in our Government Systems and Information Management Services segments as well as a decline in Commercial Systems sales due to headwinds from lower business jet and aftermarket sales. As a result, we are reaffirming our financial guidance for the full year.”
Ortberg continued: “We are making good progress with our pending acquisition of B/E Aerospace, which will strengthen our position as a leading supplier of cockpit and cabin solutions. Our integration planning teams are moving full speed ahead and all of our targets remain intact. I continue to be confident in our ability to achieve our synergy targets while focusing on successfully integrating these two great companies. The next major milestones include shareholder and various regulatory approvals, all of which we expect to complete in the coming months.”
Following is a discussion of fiscal year 2017 first quarter sales and earnings for each business segment.
The company’s effective income tax rate from continuing operations was 28.6 percent for the first quarter of fiscal year 2017 compared to a rate of 15.3 percent for the same period last year.
The higher current year effective income tax rate from continuing operations was primarily due to the timing of the Federal Research and Development Tax Credit. On Dec. 18, 2015, the Protecting Americans from Tax Hikes Act was enacted which permanently reinstated the Federal Research and Development Tax Credit retroactive to Jan. 1, 2015. This favorable tax credit had previously expired on Dec. 31, 2014.
Cash used for operating activities from continuing operations was $101 million for the first quarter of fiscal year 2017, compared to $91 million in the first quarter of fiscal year 2016. The increase in cash used for operating activities was due primarily to higher income tax payments, partially offset by higher cash collections from customers.
The company paid a dividend on its common stock of 33 cents per share, or $43 million, in the first quarter of 2017.
Fiscal Year 2017 Outlook
The following table is a summary of the company’s financial guidance for continuing operations for fiscal year 2017, which is unchanged from the guidance previously provided on October 23, 2016. This financial guidance is based on stand-alone expectations for Rockwell Collins and does not contemplate the impact of the pending acquisition of B/E Aerospace.
Total sales: $5.3 billion to $5.4 billion
Total segment operating margins: About 21 percent
Free cash flow: $600 million to $700 million (1)
Total research and development investment: $900 million to $950 million (2)
Full year income tax rate: 28 percent to 29 percent
(1) – The company’s free cash flow expectations assume capital expenditures will total about $200 million, and net pre-production engineering costs capitalized in inventory is expected to increase about $50 million in fiscal year 2017.
(2) – Total research and development investment consists of company and customer funded research and development expenditures as well as the net increase in pre-production engineering costs capitalized within inventory.
Non-GAAP financial information
Total segment operating margin is a non-Generally Accepted Accounting Principles (GAAP) measure and is reconciled to the related GAAP measure, income from continuing operations before income taxes, in the segment sales and earnings information schedule in this press release.
Total segment operating margin is calculated as total segment operating earnings divided by total sales. The non-GAAP total segment operating margin information included in this disclosure is believed to be useful to investors’ understanding and assessment of the company’s ongoing operations.
U.S. Army CH-47F
Rockwell Collins won a follow-on service and support contract for its common avionics architecture system on the U.S. Army’s CH-47F helicopter fleet. The contract covers up to 1,910 units by 2021.
U.S. UH-60 displays
The U.S. Army selected Rockwell Collins to service the MFD-268C4 multi-function display units for its UH-60M Black Hawk fleet under a five-year firm-fixed-price, indefinite delivery, indefinite quantity contract.