Yahoo Finance Rockwell Collins Adds Pacific Avionics to its Portfolio - Analyst Blog
Rockwell Collins Inc. COL has expanded its portfolio of Information Management Services by adding Pacific Avionics, a Singapore-based company which specializes in developing technologies for wireless information distribution inclusive of in-flight entertainment and connectivity.
With the acquisition of Pacific Avionics, Rockwell Collins looks forward to providing wireless distribution of digital information on board. Thus, with the integration of Pacific Avionics’ solid platform for Internet connectivity services with Rockwell Collins’ cabin products, customers will enjoy numerous advanced services.
The acquisition will offer services that will allow the streaming of video content simultaneously by over 250 passengers as well as a flexible architecture to support a wide range of applications and faster wireless speed onboard.
The acquisition of Pacific Avionics will enable Rockwell Collins to offer enhanced services and create customer value, besides expanding its overall range of services. Boosting customer confidence in the company’s services is essential for a company to maintain growth in its order book and keep its top line ticking. Moreover, with the contract flow drying out considerably, defense companies are focused on enhancing their technological expertise and product offerings.
We note that this is not the first time that Rockwell Collins has acquired a company to boost its portfolio. On Dec 23, 2013, the company acquired the airline communications and information processing solution major ARINC Inc. for $1.4 billion. The addition of ARINC’s high-quality ground network and services has boosted Rockwell Collins’ existing information management capabilities with its application beyond avionics and cabin technologies. ARINC contributed $137 million to first-quarter fiscal 2015 revenues. In fact, the company witnessed 16.3% year-over-year top-line growth primarily on the back of the ARINC Inc. acquisition.
Focus on expanding its product and service offering, along with improvement of quality, will enhance its growth trajectory and bring in lucrative deals for the company. It is worth noting that in its first-quarter fiscal 2015 earnings call, the company raised its guidance for fiscal 2015 earnings to the range of $5.10–$5.30 per share from its previous expectation of $4.90–$5.10 on projected total revenue of $5.2–$5.3 billion.
Rockwell Collins currently holds a Zacks Rank #2 (Buy). Other favorably-placed stocks in the same sector include Spirit AeroSystems Holdings, Inc. SPR, TransDigm Group Incorporated TDG and GenCorp Inc. GY, each carrying the same Zacks Rank as Rockwell Collins.
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