Rockwell Collins cuts 300 jobs, moves to cut costs

The layoffs represent about 1.5 percent of its work force. It will also cut 100 contract workers, primarily in engineering functions.

The company said it also will defer or eliminate some open positions, reduce discretionary spending and delay 2009 merit raises for management and most other employees for three months.

"Like many other companies, we're dealing with significant challenges in meeting our business objectives. These challenges include air travel declines resulting from the weaker global economy, delays and cancellations in several government programs, and the prolonged Boeing strike," said Chief Executive Clay Jones.

Last week, Cedar Rapids, Iowa-based Rockwell Collins said the U.S. military canceled the Army's Armed Reconnaissance Helicopter, run by Textron Inc., as well as the deferral of a $35 billion aerial-refueling tanker contract awarded to Northrop Grumman Corp. and a $15 billion combat, search-and-rescue helicopter contract awarded to Boeing Co. Rockwell Collins is a supplier on those defense contracts.

Both deferred contracts were disputed by the losing companies and have been placed on hold until the next administration.

Jones said last week that the company still expects to deliver solid growth in its government-systems business at roughly 6 percent, but the company revised downward its profit expectations. It now expects earnings per share for the fiscal year ending in September 2009 between $4.25 and $4.45, down from its prior estimate of $4.35 and $4.55. The company lowered its revenue forecast to $4.9 billion to $4.95 billion, down from $5.05 billion to $5.1 billion.

Analysts polled by Thomson Reuters had expected earnings of $4.39 per share on revenue of $5.06 billion. On average, they now expect earnings of $4.33 on revenue of $4.94 billion.

Rockwell Collins shares fell 42 cents to $34.67 in early afternoon trading.