Jul. 31--CEDAR RAPIDS -- A steep drop in sales to makers of new aircraft hurt Rockwell Collins' third quarter earnings, which fell 17 percent, the company announced Thursday.

The manufacturer of aviation and defense electronics reported net income of $145 million, or 91 cents per share, for the quarter ended June 30.

Net income was down 17 percent from the third quarter of fiscal 2008, while earnings per share were down 15 percent.

Yet the results were slightly better than Wall Street analysts had expected, and Rockwell Collins shares jumped Thursday, closing on the New York Stock Exchange at $42.52, up $2.26, or 5.6 percent.

Downward pressure on earnings came mainly from a slowdown in sales by the company's Commercial Systems business, which manufactures avionics and other electronics used in the airline industry.

Sales to aircraft original equipment manufacturers plunged 35 percent, or $114 million, to $211 million.

Among the factors slowing commercial sales were lower production rates at business jet manufacturers, a decline in revenue related to the delay of Boeing Aerospace's huge 787 Dreamliner and lower order volume from Boeing as it corrected inventories to reflect the impact of a labor strike.

Even aftermarket sales were hit hard, falling 17 percent.

Sales in the company's Government Systems business increased 7 percent, or $44 million, to $651 million. A good part of that growth -- $27 million --came from the newly acquired DataPath Inc. and SEOS Group Ltd.

"During this time of volatile market conditions, we are very focused on effectively managing our business," said Clay Jones, chairman, president and CEO.

Jones noted that Rockwell Collins had increased its cash flow from operations by 23 percent year-over-year despite the revenue decline.

-----

To see more of The Gazette, or to subscribe to the newspaper, go to http://www.gazetteonline.com.

Copyright (c) 2009, The Gazette, Cedar Rapids, Iowa

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NYSE:COL, NYSE:BA,

A service of YellowBrix, Inc.