Moog Inc. (NYSE: MOG.A) (NYSE: MOG.B) announced today financial results for the fourth quarter and fiscal year ended October 1, 2016.
Fourth Quarter Highlights
- Earnings per share of $0.92, up 23% from a year ago;
- Sales of $619 million, down 1%;
- Restructuring and impairment expenses of $12 million, the equivalent of $.24 per share;
- Strong cash flow from operating activities.
Full-Year 2016 Highlights
- Earnings per share of $3.47, up 4%;
- Sales of $2.41 billion, down 4%;
- Operating margins of 9.9%, up marginally;
- Strong cash flow from operating activities, continuing the strong pattern of recent years;
- Repurchase of 850,000 shares in the second and third quarters for $39 million.
Segment Results
Total Aircraft Controls sales in the quarter were $265 million, down 4% from a year ago. Military aircraft sales of $127 million were down 13%, with softness in both OEM and aftermarket sales. Commercial aircraft revenues increased 6%, to $139 million. Sales of OEM products to Airbus increased 44%, to $33 million, on the A350 ramp. Boeing OEM product sales were 14% higher, to $64 million. Commercial aftermarket sales were off marginally.
For the year, Aircraft Controls sales were $1.1 billion, down 2%. Military aircraft OEM sales of $512 million were down 6% due to weaker sales on legacy programs including the F-15 and F-18 fighters, V-22 tilt rotor and Black Hawk helicopter programs. However, F-35 production sales were 6% higher, at $90 million. Military aftermarket sales of $200 million were off 5% due to the completion of the C-5 Super Galaxy modernization program.
Commercial aircraft sales of $551 million in the year were up 2%, mostly due to increased Airbus A350 and Boeing 787 OEM deliveries. Commercial aftermarket sales were down 4% on lower initial provisioning of 787 spares and softer business jet activity.
In the quarter, Space and Defense segment sales were $97 million, up 5% year over year. Space sales were 14% higher, attributed to strong satellite propulsion sales. Defense sales were off 4% on softer ground vehicle sales in Europe.
Space and Defense sales for the year were $366 million, down 4%. Space sales were $183 million, off 5%, as work on NASA’s Common EHA and Soft Capture programs wound down. Defense sales were down 3%, at $184 million, reflecting lower sales of missile controls and ground vehicle systems in Europe.
Industrial System segment sales in the quarter were $131 million, up 2%. Most of the increase was tied to stronger foreign currencies relative to the U.S. dollar. Energy sales were higher, simulation and test sales were mostly unchanged and industrial automation sales were down.
Industrial System sales for the year were $515 million, down 1%, mostly due to foreign exchange movements. Weaker industrial automation sales for metal forming and steel processing equipment, off 6%, were partly offset by increased sales for simulation and test products and an increase in wind energy sales tied to pitch control systems.
The Company’s Medical Devices segment has been integrated into the Components segment. All Components segment numbers referenced below have been restated and are comparable.
Components segment sales in the quarter were $125 million, down 1% from last year on weaker industrial sales, in particular, sales of oil and gas exploration products. Aerospace and defense sales of $47 million and medical sales of $47 million were unchanged. For the year, Components sales were $467 million, down 13%, with lower sales across all markets.
Consolidated year-end 12-month backlog was $1.2 billion.
Fiscal 2017 Outlook
The Company provided its initial projections for fiscal 2017.
- Forecast sales of $2.44 billion, up 1%;
- Forecast earnings per share of $3.50, plus or minus $0.20;
- Forecast full year operating margins of 10.3%;
- Another year of solid cash flow.
“Q4 was a strong finish to a challenging fiscal 2016,” said John Scannell, Chairman and CEO. “Like many companies, we’re faced with a slow-growth environment and we responded with restructuring activities, on-going portfolio adjustments and continued investment for the long term. Our underlying operations performed well despite significant challenges in the year and we’re optimistic that the actions we’ve taken will lead to long-term performance improvements.”
“We’re starting out fiscal 2017 with a cautious view of our markets. We’re assuming most markets will be fairly stable with the only real growth coming from the A350 program. We’re planning for a negative shift in the mix of programs in both our military and commercial aircraft businesses as production rates on legacy programs such as the F-18, 777 and business jets slow and new programs such as the F-35 and A350 continue to ramp up. Our Aircraft R&D will abate somewhat but will remain relatively high on our A350 and E-2 programs. We’ll also have a higher tax rate than fiscal 2016.”
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, wind energy, marine and medical equipment. Additional information about the company can be found at www.moog.com.
