Avionics and aircraft parts maker Rockwell Collins (COL) beat profit and sales expectations in the second quarter 2018, bolstered by strong revenue stream from the recently acquired B/E Aerospace. Throughout the day the stock was trading in the negative territory despite the strong results.
Ever since B/E Aerospace was acquired for $8.6 million last year, it has boosted Rockwell’s revenue and profit growth. Revenue during the quarter jumped 62% to $2.18 billion, and excluding the $776 million of revenue from B/E, the Iowa-based company’s revenue rose just 5%.
Net income surged 41% to $237 million and earnings per share rose by 16 cents to $1.43. Excluding items, the company earned $1.81 per share.
“Our plan for the year is playing out as we expected, with commercial aftermarket strength, higher business jet utilization, and an improved defense budget environment driving our growth and more than offsetting the anticipated completion of nuclear security mandate-related sales in our Information Management Services business,” said CEO Kelly Ortberg.
Last September, the avionics part maker has agreed to be acquired by United Technologies (UTX) for $30 billion. This deal currently awaits approval from the Chinese regulators and Greg Hayes, CEO of United Technologies sees no threat to this deal, considering the heightened tension between the U.S. and China over tariffs. The deal is expected to close in July this year.
Last September, the avionics part maker has agreed to be acquired by United Technologies (UTX) for $30 billion
United Technologies would combine its aerospace unit with Rockwell and it is expected that the combined unit would generate annual sales of about $23 billion.
Rockwell has plans to lay-off nearly 400 employees later this year as it shuts a former B/E Aerospace facility in Tuscon, Arizona.