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Moog's Earnings Jump 22 Percent

By David Robinson

May 2, 2011
 

Moog Inc.'s second-quarter profits jumped by 22 percent as the Elma aerospace company's industrial products business continued to rebound, while its space and defense controls segment strengthened.

The improved performance prompted Moog executives Monday to increase their earnings forecast for the entire fiscal year, boosting its profit guidance by 5 cents per share and its sales forecast by $20 million, or less than 1 percent.

"The business is really, in total, doing very nicely," said Robert T. Brady, Moog's chairman and chief executive officer. "We're back on track."

In the second quarter, Moog earned $30.6 million, or 66 cents per share, compared with $25 million, or 55 cents per share, a year earlier. The earnings were better than the 64 cents per share that Wall Street analysts were expecting.

Moog's sales grew by 12 percent to $574 million during the quarter that ended in early April, up from $510 million a year earlier. The company's revenues were considerably stronger than the $551 million that analysts had expected.

Moog also increased its earnings forecast for the entire fiscal year, boosting its profit guidance to $129 million, or $2.80 per share. That would be a 19 percent increase from the company's earnings last year and a 5-cent-per-share increase from its previous forecast.

Moog said it now expects its sales to reach $2.27 billion during the fiscal year that ends in September, up from its previous forecast of $2.25 billion.

Much of the improvement in earnings during the second quarter came from Moog's space and defense controls and industrial products businesses.

Earnings at Moog's space business jumped by 51 percent to $13.1 million, bolstered by strong sales of its Driver's Vision Enhancer program for the military and its security and surveillance system sales. Space sales rose by 11 percent to $88 million.

Industrial systems earnings nearly doubled to $15.9 million, fueled by rising capital equipment revenues and increased wind energy product sales. Industrial product sales grew by 29 percent, as revenues from its legacy industrial products increased for the seventh straight quarter.

Earnings declined by 2 percent to $19 million at the company's aircraft controls business, despite a 9 percent increase in sales to $206 million.

Operating profits at Moog's components business dipped by 8 percent to $13.3 million on flat sales of $90 million.

The company's medical device business continued to struggle, losing $1.5 million after breaking even a year ago, despite a 6 percent increase in sales to $34 million.

In response, Brady said the company has developed a restructuring plan for the medical device business that will start going into effect over the next few weeks. He declined to say how much the restructuring would save or how many jobs it would eliminate. Nearly all of the restructuring will involve Moog operations located outside Western New York, he said.

He said the medical device business has a support infrastructure "that's bigger than we can afford, given the sales we've been able to generate."

drobinson@buffnews.com