Moog Inc. Announces Third Quarter Results
EAST AURORA, NY--(Marketwired - July 29, 2016) - Moog Inc. (NYSE: MOG.A) (NYSE: MOG.B) announced today third quarter earnings per share of $1.00, up 6% from a year ago on slightly lower sales of $613 million. Cash flow from operating activities was strong in the quarter, at $82 million, while net earnings were flat at $36 million.
Total Aircraft Controls sales in the quarter were $274 million, up 1% from a year ago. Commercial aircraft sales of $140 million were up 8%. Sales of OEM products to Airbus increased 45%, to $28 million, on the A350 production ramp up. Boeing OEM product sales were 13% higher, at $66 million, on increased sales across all platforms. Commercial aftermarket revenues of $27 million were down 12% due to lower initial provisioning of 787 spares and softer business jet activity.
Military aircraft sales of $134 million were 5% lower year over year. OEM sales were down 6%, to $84 million, due to declines in V-22 tilt rotor and Black Hawk helicopter sales. F-35 production sales were 7% higher. Military aftermarket sales were down 4%, to $50 million, as the C-5M Super Galaxy upgrade program winds down. F-35 aftermarket sales were higher on increased depot repair activity.
Space and Defense segment sales were $91 million, 5% lower than last year. Space sales were $44 million, a decrease of 8% due to lower sales of avionics and components. Defense sales were $47 million, down marginally due to slower military vehicle sales.
Sales in the Company's Industrial Systems segment were flat at $130 million. Energy market sales were 8% higher, at $33 million, helped by higher sales of wind energy products into Europe and China. Industrial automation sales were $69 million, off 3%. Simulation and test product sales were $28 million, also off 3%, reflecting strong prior year sales of test equipment.
Components segment sales, at $92 million, were 18% lower than last year. Sales of aerospace and defense products were $42 million, down 14%, on softer OEM program and aftermarket sales. Sales into energy, industrial and medical markets continued to experience weakness across a range of products and programs.
The Medical Devices segment had sales of $26 million, up 1%, on increased sales of enteral pumps and administration sets. Through the first nine months of the year, excluding the previously divested life sciences business, organic growth in the segment is 8% year over year.
The current backlog is $1.2 billion.
The Company updated its projections for fiscal 2016, ending October 1, 2016, to include sales of $2.42 billion. The earnings per share midpoint is unchanged, at $3.35, and the range has been narrowed to plus or minus $.10 per share.
"Overall we had a good third quarter," said John Scannell, Chairman and CEO. "Sales were slightly down but EPS was ahead of our guidance and we had strong cash flow. In addition, our aircraft team celebrated the flawless operation of our flight controls as part of the successful first flight of the Embraer E2 jet. With one quarter left to go, we're refining our sales forecast for the year, while keeping our EPS forecast unchanged from 90 days ago."
In conjunction with today's release, Moog will host a conference call beginning at 10:00 a.m. ET, which will be broadcast live over the Internet. John Scannell, Chairman and CEO, and Don Fishback, CFO, will host the call. Supplemental financial data will be available on the webcast web page approximately 60 minutes prior to the conference call. Listeners can access the call live or in replay mode at www.moog.com/investors/communications.
Moog Inc. is a worldwide designer, manufacturer, and integrator of precision control components and systems. Moog's high-performance systems control military and commercial aircraft, satellites and space vehicles, launch vehicles, missiles, automated industrial machinery, wind energy, marine and medical equipment. Additional information about the Company can be found at www.moog.com.
Information included or incorporated by reference in this report that does not consist of historical facts, including statements accompanied by or containing words such as "may," "will," "should," "believes," "expects," "expected," "intends," "plans," "projects," "approximate," "estimates," "predicts," "potential," "outlook," "forecast," "anticipates," "presume" and "assume," are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and are subject to several factors, risks and uncertainties, the impact or occurrence of which could cause actual results to differ materially from the expected results described in the forward-looking statements. These important factors, risks and uncertainties include:
- the markets we serve are cyclical and sensitive to domestic and foreign economic conditions and events, which may cause our operating results to fluctuate;
- we operate in highly competitive markets with competitors who may have greater resources than we possess;
- we depend heavily on government contracts that may not be fully funded or may be terminated, and the failure to receive funding or the termination of one or more of these contracts could reduce our sales and increase our costs;
- we make estimates in accounting for long-term contracts, and changes in these estimates may have significant impacts on our earnings;
- we enter into fixed-price contracts, which could subject us to losses if we have cost overruns;
- we may not realize the full amounts reflected in our backlog as revenue, which could adversely affect our future revenue and growth prospects;
- if our subcontractors or suppliers fail to perform their contractual obligations, our prime contract performance and our ability to obtain future business could be materially and adversely impacted;
- contracting on government programs is subject to significant regulation, including rules related to bidding, billing and accounting kickbacks and false claims, and any non-compliance could subject us to fines and penalties or possible debarment;
- the loss of The Boeing Company as a customer or a significant reduction in sales to The Boeing Company could adversely impact our operating results;
- our new product research and development efforts may not be successful which could reduce our sales and earnings;
- our inability to adequately enforce and protect our intellectual property or defend against assertions of infringement could prevent or restrict our ability to compete;
- our business operations may be adversely affected by information systems interruptions, intrusions or new software implementations;
- our indebtedness and restrictive covenants under our credit facilities could limit our operational and financial flexibility;
- significant changes in discount rates, rates of return on pension assets, mortality tables and other factors could adversely affect our earnings and equity and increase our pension funding requirements;
- a write-off of all or part of our goodwill or other intangible assets could adversely affect our operating results and net worth;
- our sales and earnings may be affected if we cannot identify, acquire or integrate strategic acquisitions, or if we engage in divesting activities;
- our operations in foreign countries expose us to political and currency risks and adverse changes in local legal and regulatory environments;
- unforeseen exposure to additional income tax liabilities may affect our operating results;
- government regulations could limit our ability to sell our products outside the United States and otherwise adversely affect our business;
- governmental regulations and customer demands related to conflict minerals may adversely impact our operating results;
- the failure or misuse of our products may damage our reputation, necessitate a product recall or result in claims against us that exceed our insurance coverage, thereby requiring us to pay significant damages;
- future terror attacks, war, natural disasters or other catastrophic events beyond our control could negatively impact our business;
- our operations are subject to environmental laws, and complying with those laws may cause us to incur significant costs; and
- we are involved in various legal proceedings, the outcome of which may be unfavorable to us.
These factors are not exhaustive. New factors, risks and uncertainties may emerge from time to time that may affect the forward-looking statements made herein. Given these factors, risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictive of future results. We disclaim any obligation to update the forward-looking statements made in this report.