Moog Reports First Quarter Results
EAST AURORA, N.Y.--(BUSINESS WIRE)--Jan 25, 2019--Moog Inc. (NYSE:MOG.A and MOG.B) announced today financial results for the first quarter ended December 29, 2018.
First Quarter HighlightsSales of $680 million, up 8% from a year ago; GAAP earnings per share of $1.25, versus $.04 a year ago; Earnings per share of $1.25, up 25% over last year’s adjusted earnings per share of $1.00, excluding one-time Tax Act effects; Operating margins of 11.7%, up from 10.7% a year ago; Effective tax rate of 24.3%; $64 million cash flow from operating activities.
Total Aircraft Controls segment sales in the quarter were $304 million, up 9% year over year. Military aircraft sales in the quarter were $147 million, up 18% from a year ago. Military OEM sales increased 22%, to $99 million, on very strong F-35 activity. Military aftermarket sales were 11% higher, attributed to V-22 repair work.
Commercial aircraft revenues increased 2%, to $157 million. Boeing OEM product sales were slightly higher, at $62 million. The production ramp of the Embraer E2 and higher business jet sales offset a decrease in sales of OEM products to Airbus. Commercial aftermarket sales were unchanged at $34 million.
In the quarter, Space and Defense segment sales were $156 million, up 17% year over year. Defense sales were 26% higher, to $106 million, with increases in missile systems, defense controls and security products for UAV tracking. Space sales were 2% higher, with increased sales of launch vehicle systems and satellite avionics products offsetting marginally lower sales to NASA.
Industrial Systems segment sales in the quarter were $220 million, up 2% from last year. Stronger sales in industrial automation were helped by the Brno acquisition based in the Czech Republic. Medical pumps and associated products were up 4%. Simulation and test sales were off marginally while lower energy product sales reflected the company’s recent exit from the wind pitch control business.
Total backlog was $2.1 billion, with consolidated 12-month backlog at $1.4 billion, up 10% from a year ago.
Fiscal 2019 Outlook
The Company affirmed its fiscal 2019 projections of 90 days ago.Forecast sales of $2.88 billion; Forecast earnings per share of $5.25, plus or minus $0.20; Forecast full year operating margins of 11.7%; Forecast cash flow from operations of $280 million; Forecast effective tax rate of 26.0%.
“We’re pleased to get off to a good start in Q1,” said John Scannell, Chairman and CEO. “Sales were up 8%, operating margins expanded 100 basis points and earnings per share were up 25% relative to an adjusted first quarter last year. Our major markets are doing well with defense particularly strong across all our applications. Commercial aerospace is also very healthy and our industrial markets remain solid. With one quarter in the bank, we are increasingly confident about our forecast for the full year.”
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. Listeners can access the call live or in replay mode at www.moog.com/investors/communications. Supplemental financial data will be available on the webcast web page 90 minutes prior to the conference call.
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, 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 forward-looking statements reflect the Company’s current views with respect to certain current and future events and financial performance and are not guarantees of future performance. This includes but is not limited to, the Company’s expectation and ability to pay a quarterly cash dividend on its common stock in the future, subject to the determination by the board of directors, and based on an evaluation of company earnings, financial condition and requirements, business conditions, capital allocation determinations and other factors, risks and uncertainties. The impact or occurrence of these 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 over time 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; 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; we are involved in various legal proceedings, the outcome of which may be unfavorable to us; future terror attacks, war, natural disasters or other catastrophic events beyond our control could negatively impact our business; and our operations are subject to environmental laws, and complying with those laws may cause us to incur significant costs.
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.
Results shown in the previous table include the one-time impacts of the Tax Cuts and Jobs Act of 2017. The table below adjusts the income taxes, net earnings and diluted net earnings per share to exclude these impacts.
Reconciliation to non-GAAP adjusted income taxes, net earnings and diluted net earnings per share:
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CONTACT: Ann Marie Luhr
KEYWORD: UNITED STATES NORTH AMERICA NEW YORK
INDUSTRY KEYWORD: TECHNOLOGY SATELLITE MANUFACTURING AEROSPACE ENGINEERING
SOURCE: Moog Inc.
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PUB: 01/25/2019 07:55 AM/DISC: 01/25/2019 07:55 AM