Why Rockwell Collins (COL) Stock Is Rising Today

NEW YORK (TheStreet) --Shares of Rockwell Collins Inc. (COL) are higher by 4.02% to $80.93 in mid-morning trading on Friday, after the company issued its financial guidance for the 2015 fiscal year and said it's expecting earnings per share between $4.90 and $5.10 on revenue in the range of $5.2 billion to $5.3 billion.

Analysts polled by Thomson Reuters are expecting the company, which is involved with the design, production, and support of communications and aviation electronics for commercial and military customers, to post EPS of $4.94.

Rockwell forecast revenue for fiscal 2015 in the range of $5.2 billion to $5.3 billion, while analysts are expecting $5.25 billion.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

"In March of this year, we communicated our plan to accelerate growth, expand cash flow, and deploy our capital with priorities on growth and shareowner return. I'm pleased to report that our full year 2015 guidance does just that," said company CEO Kelly Ortberg.

Additionally, Rockwell Collins announced its board has approved an additional $500 million to expand the company's share repurchase program.

Separately, TheStreet Ratings team rates ROCKWELL COLLINS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ROCKWELL COLLINS INC (COL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, increase in stock price during the past year, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 1.3%. Since the same quarter one year prior, revenues rose by 11.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $174.00 million or 33.84% when compared to the same quarter last year. In addition, ROCKWELL COLLINS INC has also vastly surpassed the industry average cash flow growth rate of -19.54%.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 39.40% is the gross profit margin for ROCKWELL COLLINS INC which we consider to be strong. Regardless of COL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, COL's net profit margin of 12.50% compares favorably to the industry average.
  • ROCKWELL COLLINS INC reported flat earnings per share in the most recent quarter. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ROCKWELL COLLINS INC increased its bottom line by earning $4.57 versus $4.15 in the prior year. For the next year, the market is expecting a contraction of 1.3% in earnings ($4.51 versus $4.57).
  • You can view the full analysis from the report here: COL Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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