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Moog profits leap 23 percent

Moog Inc. chief executive Robert T. Brady saw plenty to like in the Elma aerospace company's fourth quarter.

Moog's profits jumped by 23 percent, topping analyst expectations by a penny per share, while sales were up 21 percent.

At the same time, the company continued to invest heavily in its development efforts for the new Boeing 787 Dreamliner commercial jet, tempering its earnings growth now but paving the way for a spurt in sales in the coming years.

"The company is performing, as a whole, very well during a period when the company is making substantial research and development investments," Brady said Thursday. "This is a huge program for us, and it will be very important for the long-term future of the company."

Moog executives expect the company to continue its double-digit growth into next year, slightly increasing its forecast that its profits and sales in 2008 will jump by about 16 percent.

"We're actually quite optimistic about 2008," Brady said.

In the fourth quarter, Moog's profits jumped to $26.8 million, or 62 cents per share, up from $21.8 million, or 51 cents per share, a year earlier. Sales rose to $413 million during the quarter that ended in September, compared with $341 million the year before.

Much of the earnings growth came from Moog's space and defense controls business, along with its industrial controls segment, while earnings weakened in its aircraft controls business.

Moog's industrial controls business increased its earnings by 41 percent to $13.8 million as revenues rose 18 percent to $111 million, fueled by stronger sales of its motion simulators, steel mill equipment and plastics controls.

Earnings in the company's space and defense business surged by 73 percent to $5.5 million on a 29 percent increase in sales to $46 million as work picked up on its program to refurbish Minuteman missiles.

While sales grew by 12 percent to $160 million in Moog's aircraft controls business, earnings slid by 7 percent to $17.5 million. Moog's research and development costs, which typically average about 4 percent to 5 percent of sales, jumped to 6 percent last year because of the 787 program. In all, Moog's R&D spending grew by 34 percent last year to $103 million.

Earnings at the company's components group jumped by 28 percent to $10.7 million as sales rose 18 percent to $73 million on double-digit sales gains to the military and for commercial aircraft avionics.

The company's new medical devices business earned $2.8 million on $23 million in sales, although Brady said that unit was not as profitable as officials had hoped because of weaker-than-expected earnings at its Curlin Medical business.

For the fiscal year that began in October, Moog said it expects to earn $115 million to $119 million, or about $2.69 per share, on sales of $1.785 billion to $1.805 billion.

Moog shares fell 6 percent, or $2.66, to $43.49 on Thursday.


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