Rockwell Collins Sheds Rollmet - Analyst Blog
June 22 2011 - 12:51PM
Zacks
Rockwell Collins Inc. (COL) said it has decided
upon selling its Rollmet product line to Precision
Castparts Corp. (PCP). The company’s decision to sell the
Rollmet business stems from its inclination to
have a better focus on the core markets, leading to stronger
growth.
The Rollmet business provides seamless alloy and stainless steel
pipes and propulsion system components for the energy,
petrochemical and defense industries.
Rockwell is of the opinion that the sale would also enhance
Rollmet’s position as it will now be better aligned with its
end-markets. The company expects the sale to close in the fourth
quarter of fiscal 2011, pending customary closing conditions.
Separately, Rockwell Collins announced that it expects to
release its fiscal third quarter 2011 results on Friday, July 22,
2011.
In second quarter 2011, Rockwell Collins reported earnings per
share of 96 cents, in line with the Zacks Consensus Estimate. The
result also comfortably beat the year-ago quarterly EPS of 93 cents.
Total sales for Rockwell Collins rose by 7% to $1.22 billion,
beating the Zacks Consensus Estimate of $1.20 billion and higher
than $1.14 billion in the year-ago quarter.
Rockwell Collins expects its fiscal 2011 EPS to be in the
range of $3.90 – $4.10. The company’s revenue guidance for full-year 2011
is $4.8 billion – $5.0 billion.
The Zacks Consensus earnings estimates for the third
quarter of 2011, fiscal 2011 and fiscal 2012 are $1.04, $4.09 and
$4.63 per share, respectively.
Rockwell Collins' fortunes are tied to the cyclical commercial
aerospace market, which is currently undergoing a recovery phase.
Recently, the commercial aerospace market witnessed higher air
traffic with rising demand for air travel and cargo services. The
company’s primary competitors include Raytheon Co.
(RTN) and Astronics Corporation (ATRO).
Rockwell Collins currently retains a Zacks #2 Rank, which
translates into a short-term Buy rating. Considering the
fundamentals, we are maintaining our Neutral recommendation on the
stock.
ASTRONICS CORP (ATRO): Free Stock Analysis Report
ROCKWELL COLLIN (COL): Free Stock Analysis Report
RAYTHEON CO (RTN): Free Stock Analysis Report
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