(RTTNews) - Communications and aviation electronics products maker Rockwell Collins Inc. (COL: News ) on Tuesday posted a decline in fourth-quarter profit, reflecting weak performance at its Commercial Systems segment amid the volatile market circumstances. In addition, the company backed its financial forecast for the fiscal year 2010.

Q4 Results

The Cedar Rapids, Iowa-based company's fourth-quarter net income was $134 million, or $0.84 per share, a decline of 26%, compared to $182 million or $1.13 per share in the year-ago quarter. Total sales dropped 7% from last year and missed the Street view.

The company noted that the latest quarter results encompassed a charge of $21 million primarily related to the closing of the company's San Jose, California facility, asset impairments and other restructuring activities. Results for the year-ago quarter included a benefit related to a retroactive catch up for the renewal of the Federal R&D Tax Credit, which, net of related incentive compensation cost, increased earnings per share by about 8 cents.

Excluding the impact of the items, earnings per share fell 11% to $0.93 from $1.05 in the fourth quarter of 2008. On average, 16 analysts polled by Thomson Reuters expected the company to post earnings of $0.87 per share. Analysts' estimates typically exclude special items.

Quarterly sales declined 7% to $1.19 billion from the previous year's sales of $1.28 billion, and fell short of the $1.22 billion revenue consensus estimate of twelve analysts polled by Thomson Reuters.
Clay Jones said, "During a year defined by significant challenges in the commercial aerospace environment, our company continued to benefit from its structural balance and diversification."

Government Systems

The company's Government Systems, which provides communication and electronic systems, products and services for airborne and surface applications to the U.S. Department of Defense, other government agencies, civil agencies, defense contractors and foreign ministries of defense, generated fourth quarter sales of $741 million, an increase of 17%, compared to the $636 million reported in the year-earlier quarter. Incremental sales from the acquisitions of DataPath Inc. and SEOS Group Ltd. contributed a total of $66 million to Government Systems' revenue growth.

Segment operating earnings grew 27% to $159 million, resulting in an operating margin of 21.5%, compared to operating earnings of $125 million, or an operating margin of 19.7%, in the fourth quarter of fiscal 2008. The increase in operating earnings and margin were primarily due to higher sales and lower employee incentive compensation costs, partially offset by an increase in research and development costs.

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