Moog Earns 86 Cents per Share

Moog (MOG-A) just reported fiscal Q1 earnings of 86 cents per share. In October, they gave full-year guidance of $4.25 per share and sales growth of 1%. Now Moog is lowering their EPS guidance to $3.85, but $3.95 with share buybacks. Bottom line: Good execution, poor environment.

Moog Inc. today announced first quarter sales of $631 million, down 2% from a year ago, the result of negative foreign currency effects. Net earnings of $35 million increased by 10% and earnings per share of $.86 were 23% higher, in part the result of the Company’s on-going share repurchase program.

Aircraft segment sales, at $266 million, were unchanged from last year. Commercial aircraft sales increased 10% on strong OEM production which included $62 million in sales to Boeing and $23 million in sales to Airbus. Commercial aircraft aftermarket sales of $30 million were slightly higher than a year ago.

Military aircraft sales were down 8% to $126 million. OEM sales were down 14% as production on fighter aircraft programs slowed and activity on the F-35 Joint Strike Fighter was lower. Military aftermarket sales were nominally higher, at $51 million.

Space and Defense sales of $100 million were unchanged from a year ago. Defense sales were 6% higher and space market sales were down 4%, the result of a decrease in demand for satellite avionics products.

Industrial Systems sales of $133 million were 7% lower than last year, mostly driven by the stronger U.S. dollar. Industrial automation products were down 2%, while sales of simulation and test systems were down 16%. Energy products were down 10% in total, with wind energy controls unchanged from a year ago.

Components Group sales, at $100 million, were 3% lower than a year ago. Industrial automation sales, at $24 million, were 7% higher. Sales into aerospace and defense markets were mostly unchanged. Medical components sales were down $2 million, or 10%. Sales of energy market products were down $2 million from the elevated levels of last year.

Medical Devices segment sales of $31 million were down 3% with lower sales of pumps and administration sets mostly offset by an increase in sales of OEM sensors.

Twelve month consolidated backlog was $1.4 billion, unchanged from a year ago.

Projections for fiscal 2015 were also updated. The company is reducing its sales forecast for the year by $95 million which will result in sales of $2.57 billion, net earnings of $157 million and earnings per share of $3.85. This updated guidance does not include the impact of additional share repurchases. The completion of the Company’s previously authorized 9 million share repurchase program during FY’15 would result in earnings per share guidance of $3.95.

“Overall Q1 was a mixed quarter for the company,” said John Scannell, Chairman and CEO. “On a positive note, earnings came in slightly ahead of our forecast and cash was very strong. However, during the quarter we started to feel the impact of three macroeconomic headwinds, the strengthening of the U.S. dollar, the industrial malaise outside the U.S. and the sharp and sustained drop in the price of oil. As a result, we are introducing some caution in our forecast and revising our outlook for the remainder of fiscal ’15 downward. Despite these challenges, we are still forecasting fiscal ’15 to be another year of strong cash flow and record earnings per share.”

Posted by on January 30th, 2015 at 8:20 am

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