Rockwell Collins (COL) and Inmarsat have entered into an agreement under which Rockwell will play a major role in the development, production and distribution of User Terminals (“UTs”) for Inmarsat's prospective Global Xpress (“GX”) aeronautical services to the aviation industry.
Inmarsat is the leading provider of global mobile satellite communications services. The company's services are delivered through a worldwide network of more than 400 distribution partners and service providers operating in 100 countries.
Inmarsat was the first to provide global safety services that comply with the requirements of the International Civil Aviation Organization. Currently, Inmarsat has approximately over 12,000 aircraft that rely on global in-flight connectivity.
The GX offering will be economical in terms of hardware as well as services to the end users. In-flight testing of Global Xpress aeronautical services will begin after the launch of the first Inmarsat-5 satellite that is scheduled for mid-2013.
The global services for commercial air transport, business aviation and government customers worldwide are expected to begin in 2014. Per the agreement, Inmarsat and Rockwell Collins will enter into exclusive negotiations that are expected to lead to definitive agreements by late 2011.
Rockwell Collins is a leading global provider of communication and aviation electronic solutions for commercial and government customers. Its aircraft electronics are installed in business as well as commercial aircraft cockpits and cabins of nearly every airline in the world. Additionally, its airborne and ground-based communication systems transmit approximately 70% of all U.S. and allied military airborne communications.
Rockwell has expertise in delivering systems for aircraft manufacturer forward-fit installation, which will be a key element of their activity for GX systems alongside their proven capabilities for systems retrofit.
The company is witnessing a rejuvenated business jet market with rising original equipment and improving aftermarket fortunes. Furthermore, a strong balance sheet, incremental dividend, and the ongoing share repurchase program add visibility to the story.
However, the positives are offset by the U.S. government’s delayed funding authorizations, program execution risk, dependence on international sales, high exposure to fixed priced contracts and high research and development overhead. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.
Rockwell Collins is a pioneer in the development and deployment of innovative communication and aviation electronic solutions for both commercial and government applications. The company mainly competes with Raytheon Co. (RTN).
ROCKWELL COLLIN (COL): Free Stock Analysis Report
RAYTHEON CO (RTN): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment