Friday, 29 October 2010 - 19:12
UPDATE: Rockwell Collins Wary On Air Force Tanker; 4Q Net Up 12%
(Adds comments from the CEO.)
By Doug Cameron and Matt Jarzemsky Of DOW JONES NEWSWIRES
The U.S. may again delay plans to award a multi-billion dollar contract to replace its aging fleet of aerial refueling tankers, the head of Rockwell Collins Inc. (COL) said Friday.
The Defense Department has said it would make its third attempt "in the fall" to decide between the competing bids submitted in July by Boeing Co. (BA) and European Aeronautic Defence & Space Co. NV (EAD.FR).
The parties had interpreted this as leading to a decision in November.
"In fact I'd say almost no one thinks that date will be met," said Clay Jones, chairman and CEO of Rockwell Collins, a partner in the Boeing-led consortium on the KC-X tanker project for the U.S. Air Force.
"So we are into another evaluation delay cycle in that case," said Jones on a post-earnings' conference call.
Delays and protests linked to military contract awards have plagued the aerospace sector, though improving conditions in the commercial airline and business-jet markets have helped lift results in the sector in recent months.
Rockwell Collins reported a profit of $150 million, or 94 cents a share, up from $134 million, or 84 cents a share, a year earlier. Revenue rose 7.7% to $1.28 billion.
Analysts polled by Thomson Reuters most recently forecast earnings of 94 cents on $1.3 billion in revenue.
The government systems segment--its largest top-line contributor--saw sales rise 7.7% as profit increased 6.3%. Commercial systems revenue increased 7.8%.
Operating margin narrowed to 21.2% from 21.5% at the government business but widened to 16.7% from 15.8% thanks to higher volume at commercial systems.
Its shares were recently down 1% at $60.40.
-By Doug Cameron and Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; firstname.lastname@example.org
(END) Dow Jones Newswires
October 29, 2010 12:12 ET (16:12 GMT)
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