Moog Inc.'s defense and space businesses are growing – and that's good news for the Elma motion control equipment maker's local operations.
Moog's defense-related business, excluding replacement parts, grew at a double-digit pace during the third quarter. The company is in the later stages of a $44 million project to expand its Elma campus and is looking to add engineering talent.
"We continue to hire," said John Scannell, Moog's chairman and CEO, after the company reported stronger-than-expected fourth-quarter profits on Friday. "We're continuing to hire engineering talent."
Moog, with more than 2,500 employees across Western New York, is one of the region's biggest private-sector employers. The company is getting ready to move into a 95,000-square-foot addition to its aircraft division's facilities in Elma, partly to accommodate the work Moog will be doing for years to come on the F-35 Joint Strike Fighter jet program.
But Moog's growth – with sales rising by 9% in the fourth quarter and 7% for the year – did not come without growing pains. The company's supply chains were stretched, forcing the company into a restructuring that added spare capacity to its supply chain and revamped other parts of its operations.
"We've learned over the course of the year that our operational structures were not up to par," Scannell said.
Even so, Moog's fourth-quarter profits rose by 13% to $45.9 million, or $1.31 per share, during the quarter that ended in September, up from $40.6 million, or $1.14 per share, a year earlier. That beat analyst forecasts by 3 cents per share.
The earnings exceeded expectations even though the company's aircraft controls business, which accounts for 45% of Moog's sales, endured an 11% drop in its operating profits because of the supply chain constraints and a termination charge related to Airbus' decision earlier this year to stop production of its A380 superjumbo passenger jet due to lackluster sales.
That was offset by a 49% jump in operating profits from its space and defense business and a 2% increase in earnings at its industrial products segment.
Moog expects the growth to continue into next year. The company said it expects its profits to rise by nearly 9% to $5.55 per share, up from $5.11 per share during the fiscal year that ended in September.
Moog expects its annual sales to rise by 4% and hit the $3 billion mark for the first time.