Aircraft parts supplier Rockwell Collins said it will take a “hard look” at its key government portfolio as poor performance in the segment dragged sales and forced the company to cut its full-year sales outlook.
Rockwell has felt the sting of tighter times over the past year as several of its defense programmes were canceled due to US budget cuts.
Sales to government agencies, which contribute 54 per cent to Rockwell’s revenue, have fallen for four straight quarters. And the company expects it to fall in the low single digit per centage for the rest of 2012.
“This is a time where we are taking a hard look at the whole business,” Chief Executive Clay Jones said in reply to an analyst’s question whether the company would consider selling off any business within the government segment.
Rockwell would look to have a leaner portfolio by the time the business stabilizes, he added.
The company may devote more resources to the airborne avionics part of the business, instead of surface solutions and navigation systems, KeyBanc Capital Markets analyst Michael Ciarmoli told Reuters.
Rockwell, which discontinued new investment in public safety vehicle systems, will evaluate options for its surface solutions business that makes products for soldiers and military vehicles, the analyst added.
The supplier of avionics and other electronic systems for commercial and military planes now expects 2012 sales of about $4.85 billion, down from its earlier forecast of $4.9 billion to $5 billion.
Its commercial segment, which is benefiting from a pickup in airplane production and solid air transport trends, is expected to grow 10 per cent in the second half.