Jefferies Maintains Hold on Rockwell Collins Following Share Repurchase Plan

Jefferies & Company has published a research report on Rockwell Collins

commenting on the company's aggressive repurchasing plan for outstanding shares, despite the company's $10M drop in revenues. In the report, Jefferies writes, "Rockwell Collins' relatively aggressive repurchase of its shares enabled it to limit its decline in EPS to about 10% despite a 14% drop in earnings, which was largely due to a year-ago tax benefit. Operating earnings were up in the period, despite a $10 million drop in revenues. We continue to project EPS of $4.50, the mid-point of management's $4.40 to $4.60 range. The company reported Net Income of $130 million, but EPS of $0.86 with an average diluted share count of about 151 million, slightly lower than we had expected. The quarter ended with about 147 million basic shares. We anticipate a share repurchase program of around $700 million for the year and the final quarter of the year to have around 144 million diluted shares." Jefferies maintains its Hold rating and $58 price target on Rockwell Collins, which is currently trading up $4.15 from yesterday's $56.84 closing price.