Rockwell Collins (COL) flying high

Rockwell Collins Incorporated (NYSE: COL) provides flight deck avionics, aircraft electronics, and aviation simulation equipment for commercial, government and regional aircraft. The company is currently flying high. Recently released 3Q earnings indicate net income increased 19% to $174 million. EPS gained 24% to $1.07, beating Wall Street estimates by $0.05. 3Q sales increased 7% to $1.2 billion, which translated into a $12 million increase in operating cash flow to $310 million.

While many economic sectors are facing a great deal of uncertainty, Rockwell Collins has locked in a number of government and commercial contracts that will translate into steady revenue growth well into the future. Defense spending increases annually and Rockwell Collins was recently awarded contracts by BOC to equip 47 new Airbus A320s, as well as another contract from Bombardier to supply avionics for its C series commercial aircraft.

Both the Commercial Systems and the Government Systems segments increased sales 7-8%. The company spent $81 million to buy back 1.4 million shares, with another quarter billion authorized for share repurchases. In view of all the contracts in the pipeline, the company has revised and improved its FY2008 guidance. FY2008 total sales are forecast at $4.75 billion, with FY EPS in the $4.05-$4.10 range. The stock is currently trading under $47, near its 52- week low of $44.53.