Rockwell Collins Wins $141M Contract for Radio Equipment

Rockwell Collins Inc.'s COL Government Systems segment has won a contract from the U.S. Navy under which it will exercise an option to procure AN/ARC-210 family of electronic protection radio equipment. The contract is valued at $141 million.

Electronic protection radio equipment will be manufactured for domestic as well as foreign military sales ("FMS") aircraft. Rockwell Collins will perform the activity at its facility in Cedar Rapids, IA and the work is expected to be completed by Sep 2018. Contracting activity is the Naval Air Systems Command, Patuxent River, MD.

Recently, this aerospace and defense company won a contract from the U.S. Air Force for upgrading Block 45 of the KC-135 jet's cockpit with analog or digital Group B kits. The contract including FMS is worth $105.9 million (read: Rockwell Collins Wins $105M Contract to Upgrade KC-135).

Rockwell Collins is the foremost global supplier of communications and avionics equipment for both commercial and military customers. The company's balanced exposure to both types of customers allows it to use government funding for developing products for the dual-end market.

However, the company's fiscal third-quarter 2015 revenues were affected by weakness in commercial aftermarket sales and headwinds associated with foreign currency rates. Rockwell Collins lowered the high end of its earnings guidance for fiscal 2015 due to the softness in demand.

Last week, the company released its guidance for fiscal 2016 revenues. It also outlined the challenges faced by airframe manufacturers and their parts manufacturers amid issues about sluggish global economic growth.

The company expects fiscal 2016 revenues in the range of $5.3–$5.4 billion and earnings in the range of $5.20–$5.40 per share. Rockwell Collins reaffirmed its sales and earnings projections for the current fiscal year.

Zacks Rank

Rockwell Collins currently has a Zacks Rank #4 (Sell). Some better-ranked aerospace and defense stocks include LMI Aerospace Inc. LMIA, sporting a Zacks Rank #1 (Strong Buy), and Raytheon Company RTN and Spirit AeroSystems Holdings, Inc. SPR, both carrying a Zacks Rank #2 (Buy).

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