Moog (MOG-A) Tops Q2 EPS by 10c

Moog Reports Second Quarter Results

April 27, 2018 7:55 AM EDT

EAST AURORA, N.Y.--(BUSINESS WIRE)-- Moog Inc. (NYSE: MOG.A and MOG.B) announced today financial results for the quarter ended March 31, 2018.

Second Quarter Highlights

Sales of $689 million, up 9% from a year ago; Decision to wind down the pitch control portion of the wind energy business in 2018, while continuing to support current customer needs; GAAP diluted earnings per share of $.39 includes restructuring expenses of $0.72 per share related to the wind energy pitch control business and $0.05 per share charge related to the Tax Cuts and Jobs Act; Non-GAAP adjusted earnings per share from operations of $1.16, up from $0.88 a year ago; Announcement of a quarterly cash dividend of $0.25 per share, starting in June; Acquisition of VUES Brno s.r.o, a customized motion controls manufacturer in the Czech Republic; Cash flow from operations of $1 million, including $81 million of pension contributions.

Segment Results

Total Aircraft Controls segment sales in the quarter were $311 million, up 8% year over year. Military aircraft sales of $156 million were 14% higher. F-35 Joint Strike Fighter sales increased 12%. Other OEM sales were up 29%, to $76 million, attributed to foreign military sales and helicopter programs. Military aftermarket sales were $47 million, down 3%.

Commercial aircraft revenues increased 2%, to $156 million. Commercial aftermarket sales were up 39% on strong initial provisioning and spares, offsetting lower OEM sales. Airbus OEM sales were down 10% due to timing of deliveries. Boeing 787 sales were flat while other legacy OEM sales to Boeing were down 17%, mostly due to a decline in 777 volume.

Space and Defense segment sales were $144 million, up 3% year over year. Space sales were very strong, 19% higher, attributed to increases in sales of space avionics and launch vehicle controls. Defense sales were down 5%, mostly due to lower demand for military vehicle controls and naval products.

Industrial Systems segment sales in the quarter were $234 million, 15% higher from a year ago. Excluding currency effects and acquisitions, sales increased 6%. Industrial automation sales were up a healthy 16%, to $108 million. Energy sales were up 19% on sales of exploration and power generation products. Simulation and test sales were up 12% on strong sales of test equipment. Medical market sales were 10% higher.

Consolidated 12-month backlog was $1.3 billion.

Fiscal 2018 Outlook

The Company updated its projections for fiscal 2018.

Sales of $2.69 billion, up 8% over last year and increased $70 million from 90 days ago; GAAP earnings per share of $2.67, plus or minus $0.20, including the impact of wind energy restructuring and one-time tax reform effects; Non-GAAP diluted earnings per share of $4.40, plus or minus $0.20; Adjusted operating margins of 10.9% and GAAP margins of 9.7%; Cash flow from operating activities of $170 million.

Our underlying operations had another solid quarter, said John Scannell, Chairman and CEO. Six months into the year were comfortable with our earnings projections and have increased our sales forecast by $70 million. During the quarter, we announced an acquisition and initiated a quarterly... More