Cash-rich Rockwell Collins looking for acquisitions

By Staff and Wire Reports - 11/4/2009


Rockwell Collins Inc., a maker of cockpit instruments and radios, is looking for acquisitions after generating a record level of operating cash flow, CEO Clay Jones said Tuesday.

"There's a good pipeline of opportunities out there, and we're definitely looking for those opportunities," Jones told Bloomberg News, declining to specify which areas the company would target.

Higher military sales and savings from job cuts helped offset the recession-induced drop in air travel that has hurt planemakers and Rockwell Collins' commercial revenue. The balance helped boost operating cash flow for the fiscal year through September to $633 million, a 2.1 percent gain from 2008, and enabled the company to make two purchases, Jones said.

Cedar Rapids, Iowa-based Rockwell Collins bought DataPath Inc., a satellite-based communication networks company, and SEOS Group Ltd., which builds visual-display systems for commercial and military simulators. Earnings and revenue at Rockwell Collins has dropped this year as business-jet builders slashed production and airlines put off maintenance and upgrades.

"We're still one to two quarters away from fleet stabilization" at airlines, Jones said.

On the business-jet side, where sales have plunged this year, "there's general churn now coming back into the market for pure economic supply-and-demand reasons that are beginning to make that look more stable," Jones said.





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