Moog Inc. took a big tax hit in the first quarter, but expects the federal tax overhaul to benefit the company in the long run.
As a result, the Elma aerospace company recorded first-quarter profits of only $1.3 million. Moog's profits of $47.8 million were mostly offset by $46.5 million in income taxes. A year ago, Moog reported profits of $30.6 million, after recording $6.4 million in income taxes.
"The tax reform act is a one-time hit mostly in this quarter, a little bit more through the year, and then it's going to be a benefit from there on out," said John Scannell, Moog's chairman and CEO, citing the reduced tax rate that will take effect.
The big hit, he said, was the one-time tax on offshore earnings and cash. Moog has more than $300 million in cash offshore, and even more earnings offshore, Scannell said.
Excluding the tax hit, Moog's profits were 93 cents per share - five cents better than analysts were expecting.
Moog reported a 6 percent increase in sales, to $628 million, for the quarter ended Dec. 31. Each of its three business segments — aircraft controls, space and defense, and industrial systems — had sales increases.
Moog kept unchanged its full fiscal year forecast of $2.62 billion, which would be up 5 percent from a year ago. It also expects its full-year earnings per share of $4.10, an increase of about 5 percent.