Rising sales fueled by four acquisitions last year, coupled with stronger earnings from its aircraft and industrial products businesses, helped Moog Inc. boost its first-quarter profits by 44 percent, the Elma aerospace company said Friday.
Moog's profits, which have risen for every quarter over the last 4 1/2 years, increased to $5.63 million, or 62 cents per share, from $3.91 million, or 53 cents per share, a year ago. The earnings were a penny better than the 61 cents per share that analysts predicted, according to First Call, which tracks earnings estimates.
"We're very happy with a continued strong quarter," said Robert T. Brady, Moog's chairman and chief executive officer.
Brady said the company's main focus in the coming months will be on integrating the operations of its four 1998 acquisitions, including its $160 million purchase of Raytheon Aircraft's Montek division last fall.
"Our initial assessment is that things are going real well," Brady said.
"Our emphasis in '99 will be on the assimilation of the acquisitions we made in '98," he said. "We're not expecting to make any headlines in the next few months with acquisitions. We'll pretty much stick to our knitting."
Moog said sales in its aircraft business grew by 16 percent to $73 million, largely because of the Montek acquisition. But the aircraft business' profit margins narrowed slightly because of an 80 percent increase in research and development spending linked mainly to the company's work on the Joint Strike Fighter project.
Brady said the company's profit margins in the commercial aircraft business strengthened because the Montek acquisition gave the company a greater share of the replacement parts business, which tends to be more profitable.
Moog's industrial sales grew by 23 percent to $53 million, primarily because of the acquisitions of Montek and Hydrolux Sarl in Luxembourg, along with increased sales of industrial motors that are used on control systems for military vehicles.
The company's satellite and launch vehicle business increased its sales by 11 percent to $23 million, but its operating profits fell slightly because of a less profitable mix of products, which is expected to improve as big commercial satellite constellation projects move forward, Brady said.
Moog's sales rose by 18 percent to $148.4 million during the quarter that ended Dec. 31, compared with $126.1 million a year ago. About $17.2 million of the increased sales came from the company's acquisitions, with Moog's revenues from its existing businesses growing by 4 percent.
Profits keep rising
Sales grow by 18 percent
Quarter ended Profits
1997 Dec. $ 3.9 mil.
1998 March $ 4.7 mil.
June $ 5.3 mil.
Sept. $ 5.4 mil.
Dec. $ 5.6 mil.
MOOG - 44% increase 1st quarter '99.
SOURCE: Moog, Inc.