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Moog Inc. profits increase 16 percent; Every business sees sales growth1

Moog Inc. chief executive John Scannell says the Elma motion control equipment maker's diversity is paying dividends.

Moog said Friday that its second-quarter profits jumped by 16 percent, buoyed by stronger earnings from its aircraft controls and industrial systems businesses and a rebound by its medical device unit.

"It was a nice quarter," Scannell said. "We had sales growth in every business."

Moog's earnings, which topped analyst forecasts, grew to $35.4 million, or 77 cents per share, from $30.6 million, or 66 cents per share, a year ago. Analysts had expected the company to earn 75 cents.

Moog's sales grew by 9 percent to $625 million from $574 million, fueled mainly by growth at its aircraft controls and industrial components businesses, but revenues were up in each of the company's five units.

"In general, the defense business is holding its own, our industrial markets are healthy and our commercial aircraft business is powering ahead," Scannell said.

Earnings from Moog's aircraft controls business, which accounts for more than a third of the company's sales, grew by 19 percent to $22.8 million. The unit's sales improved by 15 percent to $236 million, fueled by a 24 percent increase in commercial aircraft revenues and a 9 percent increase in military sales.

"Commercial aircraft is going great guns," Scannell said. "That military business is doing nicely."

The company's industrial systems business increased its operating profits by 21 percent to $19.3 million. The unit's sales rose by 8 percent to $168 million, buoyed by a 49 percent jump in revenues from test and simulation products, offsetting flat sales of its automation and energy products.

The stronger sales had an even bigger impact on the overall profitability of the industrial systems business.

Earnings were nearly flat at the company's components group at $13.5 million, with sales growing by 6 percent to $96 million as stronger marine, medical and industrial product sales offset lower defense revenues.

Moog's medical device business continued to rebound, earning $1.5 million during the quarter compared with a loss of $1.5 million a year ago, with sales inching up by 3 percent to $35 million on rising pump sales.

"It's not exactly where we'd like to be, but we continue to see improvement," Scannell said. "The market has improved somewhat."

The company's space and defense controls unit's operating profits slid by 24 percent, despite a 2 percent increase in revenues as the profitability of those sales decreased significantly as some of its long-running programs wound down.