Rockwell Quarterly Profit Up 42%
Rockwell International Corp., the largest maker of airline navigation and communication systems, said Tuesday that earnings rose 42% in the fiscal third quarter on strong sales of cockpit equipment.
Profit from operations for the quarter ended June 30 rose to $156.4 million, or 80 cents a share, from $109.8 million, or 56 cents, in the year-earlier period. That beat the 75-cent average estimate of analysts surveyed by First Call Corp.
Sales rose 8.7% to $1.81 billion from $1.66 billion.
Costa Mesa-based Rockwell, which also is the No. 1 U.S. producer of factory-automation equipment, has cut costs in that business to counter reduced spending by customers for capital equipment. This is the first time in five quarters the company has seen revenue improvement in that unit.
“There are some encouraging signs out there in food and beverage, packaging, transportation and some consumer industries,” Chief Executive Don Davis said. “Other markets like pulp and paper, mining and oil and gas remain quite sluggish.”
Rockwell shares fell 88 cents to $58.
The automation division’s sales rose 5% to $1.1 billion on gains in Asia and North America, while its operating profit rose 14% to $164 million.
“The automation unit had an outstanding performance, although the Reliance motor business is still sputtering,” said Mark Koznarek, an analyst with Midwest Research.
Avionics sales rose 23% to $674 million, as that division’s profit climbed 48% to $114 million. All areas of the business had strong sales, Davis said.
A charge of $6.4 million, or 3 cents a share, related to the bankruptcy of Rockwell customer Harnischfeger Industries Inc., resulted in net income of $150 million, or 77 cents, for the quarter.
In the year-earlier quarter, Rockwell posted a loss of $420.5 million, or $2.15 a share, after charges of $508 million, or $2.60 a share for restructuring, and $22.3 million, or 11 cents.
Rockwell is moving its headquarters from Costa Mesa to Milwaukee on Sept. 7 to be closer to its large manufacturing operations.
“We always hate to leave people and California behind, but we think our strategy is working very well,” Davis said.
