Moog Inc. will finish moving into its $44 million expansion at its Elma campus within the next couple of months.
But with business going strong at the locally based aerospace company, it might not be too long before Moog is looking to expand again.
"Our folks here are looking at what's the next building we've got to build because we continue to see expansion," said John Scannell, Moog's chairman and CEO, after the company reported first-quarter profits that easily topped analyst forecasts and raised its financial outlook for this year.
"We're just running out of space," Scannell said Friday. "It's very positive for the operations here."
Moog, with more than 3,500 employees across Western New York, is one of the region's biggest private-sector employers. The company already has moved into the offices within the 95,000-square-foot addition it built to its aircraft division's facilities in Elma, but Moog officials are taking a more deliberate tact moving into the assembly and test area within the new complex.
"That's gradually starting to happen," Scannell said. "We're moving into our new building slowly and carefully."
Moog Inc.'s defense and space businesses are growing – and that's good news for the Elma motion control equipment maker's local operations. Its latest expansion was built partly to accommodate the work Moog will be doing for years to come on the F-35 Joint Strike Fighter jet program and to accommodate the growth of its operations that make components and systems for other military aircraft as well as satellites and missiles.
"It's a very strong performance out here in East Aurora," he said.
Still, Scannell said the company's struggles to find top engineering talent has been a drag on its growth here.
"We're still hiring," he said. "Our biggest constraint is hiring the type of talent that we need."
Moog's defense-related business grew at a double-digit pace during the first quarter, which ended in December. Military aircraft sales grew by 17%, while sales of replacement parts rose by 17% as the fleet of F-35 jets now flying has doubled over the past two years, Scannell said. Its space and defense business is "going gangbusters," with revenues rising by 19%, Scannell said.
Overall, Moog's sales grew by 11% in the first quarter to $755 million. Its profits rose by 17% to $50 million, or $1.44 per share, easily topping the $1.21 per share that analysts were expecting.
Some of that increase was because revenues that Moog was expecting to come in later this year were booked during the first quarter, Scannell said.
But overall, Moog still believes this year will turn out better than originally expected - at least in sales. The company boosted its sales forecast for the full year to $30 billion, an increase of about $35 million. But it reduced its earnings forecast for the year by 5 cents per share to $5.50 per share because of costs associated with a recent debt offering and its share buyback program.
Scannell also downplayed the impact the continued grounding of the Boeing 737 Max aircraft will have on the company. Moog had expected to do about $30 million to $40 million in work on the 737 Max, but it's now unclear how much of those revenues will come in this year with the commercial jet's future still in limbo, Scannell said. The 737 Max work is done at a Moog facility in the Philippines.
"It's an impact, but it's not a huge impact on the company," he said.