Stronger sales of components for commercial aircraft, as well as satellites and rockets, helped Moog Inc. boost its first-quarter profits by 13 percent, the Elma aerospace company said Thursday.
But investors, spooked by the company's warning that its sales and profit growth would slow during the next nine months and cause its earnings to fall short of expectations, dumped Moog's stock, sending it down 2 5/1 6 to 22 1/8 .
The increased profits stretched Moog's streak of higher earnings to 22 quarters, but the company also warned that its sales are likely to grow at a slower pace during the next nine months.
The profits, which rose to $6.32 million, or 70 cents per share, from $5.63 million, or 62 cents per share, a year earlier, fell just shy of the 71 cents per share that analysts surveyed by First Call, which tracks earnings estimates.
"It was a good quarter," said Robert T. Brady, Moog's chairman and chief executive officer. "I'm really pleased we're doing as well in the aircraft products because we're going through a transition period," with Boeing Co. cutting its production of commercial jets and work ending in its mainstay F-15 fighter and B-2 bomber military programs.
Still, Brady warned that lower aircraft-production rates, coupled with a slowing order rate for satellites and launch vehicles, will cause Moog's sales growth to average about 3 percent this year, which is about half of the first-quarter growth rate.
Moog's sales grew by 6 percent during the quarter that ended Dec. 31 to $157.3 million from $148.4 million a year earlier.
In addition, Brady said the company's earnings growth, which has averaged about 20 percent a year during the last two years, also will slow, probably to less than 10 percent this year. Brady said he expects Moog's profits for the fiscal year that ends in September to range between $2.80 and $2.97 per share, which is down from the $3.10 per year that analysts had been expecting.
The company's acquisitions of Hydrolux and Raytheon Corp.'s Montek Division, have given the company new sales at a time when Boeing was cutting its commercial jet production and the F-18 fighter and V-22 tilt-rotor aircraft programs are ramping up, Brady said. Because Moog now supplies more components for Boeing's jets, its commercial aircraft sales grew by 6 percent to $77 million during the quarter and its replacement-parts business also increased sharply.
Moog's satellite and launch vehicle business grew by 25 percent and became much more profitable, but Brady said new orders are in short supply. "Things are slow at the moment, and if there aren't a lot of people buying satellites, there isn't a lot of demand for launch vehicles," he said.
The company's industrial sales fell slightly to $52 million because of unfavorable currency exchange rates.