Moog Inc. chief executive Robert T. Brady was a "very happy camper" on Friday.
The Elma aerospace company reported second-quarter profits that beat analyst forecasts by a penny and were up 14 percent from a year ago, despite $10 million in research and development expenses that cut operating profits in its aircraft controls business. Sales grew at all of Moog's main businesses, and the company hiked its earnings guidance for the current fiscal year by 2 cents per share.
"There wasn't any bad news," he said. "We're a bunch of different businesses and they're all doing well at the same time. That's not the typical situation historically."
But while Brady was happy, investors were subdued, pushing Moog's stock down by 7 cents to $43.33 as the increase in the company's earnings guidance still left it a penny less than the $2.33 per share that analysts surveyed by Thomson Financial/First Call already were expecting.
Brady said Moog intentionally takes a "slightly conservative" approach in putting together its earnings guidance, which is why it could lag behind the estimates of analysts who take a more aggressive view of the company's business.
"The guidance we put out is not intended to be the best set of numbers possible," Brady said. "We don't want to disappoint anybody."
Brady said he wasn't disappointed by the company's second-quarter performance. Moog's profits jumped to $24.5 million, or 57 cents per share, from $21.5 million, or 53 cents per share, a year earlier.
The company's sales grew by 19 percent to $385 million during the quarter that ended in March from $322 million a year ago, as revenues increased by at least 14 percent in each of its four main businesses.
Operating profits fell by 11 percent to $14.6 million at Moog's aircraft controls business, despite a 14 percent increase in sales to $146 million, because of $10 million in R&D expenses, mostly for the company's work on Boeing's new 787 jet.
"We're spending a lot of money on development, and we can afford it because all of our businesses are going good," Brady said.
While commercial aircraft division sales soared by 47 percent, largely because of components used on Boeing jets, Moog's military aircraft component sales were hurt by a 31 percent drop in work on the Joint Strike Fighter program as the jet's development program advances.
Moog's space and defense business increased its operating profits by 52 percent to $7.1 million as sales grew by 21 percent to $47 million, buoyed by a 39 percent jump in commercial satellite component sales and increased work on the U.S. Marine Corps' Light Armored Vehicle and the Army's Future Combat Systems program.
Moog's newly-formed medical devices business earned $1.1 million on $11.7 million in sales. Brady expects the medical device business to generate about $80 million in annual sales and a profit margin of around 20 percent beginning in the fiscal year that starts in October.
A 23 percent jump in plastic controls helped boost earnings 26 percent to $14.8 million at Moog's industrial controls business as overall sales rose 15 percent to $111 million. Component sales rose by 18 percent to $69 million, contributing to an 18 percent jump in operating profits to $9.8 million in that segment.