Published on March 24th, 2015 | by itadmin
Moog (NYSE:MOG-A) Might Be In A Bit of a Difficulty after its 1st Quarter Reports
We can see a lot of development in the aerospace industry and it seems that the industry will continue to grow in the years ahead. Similarly Moog (NYSE:MOG-A) is also a company using its potentials and earning profits from the demands of this ever growing industry. The company manufactures motion control components from the smallest of machineries from dental equipment to large scale airplanes and spacecrafts. However, this company is also a victim of the merciless business upheaval one can witness all over the world.
The company announced its 1st quarter earnings report recently, but these results were not as expected.The investors and the company were a bit battered by the situation. Here is an overview of the mishaps that may have caused below expectation earnings for the company.The reports were mixed, but investors could not find what they had been looking for. Moog (NYSE:MOG-A)reported an annual growth of 10% in net income. Besides this, the company also reduced the number of shares which ultimately resulted in higher earnings per share of $0.86.
This is almost 23% more than the previous reports. However, the effects were neutralized by the falling revenues which were $631 million, a drop of almost 2%. And this showed the basic weakness in Moog’s (NYSE:MOG-A) core business operations. The aerospace region was not helpful for the company this time, where the entire region saw an increase of only 1.5%. The commercial aircraft production sales rose by 10% but this wasn’t enough for lifting Moog’s (NYSE:MOG-A) falling revenues.
Moreover, the military region was mainly responsible for this slow growth. Besides this several regions of the company saw substantial drops. The industrial systems business alone saw a fall of 7% because of slower double digit growth in the simulation and test system sales region. The drop in energy product was also harsh on Moog’s (NYSE:MOG-A) revenues and proved fatal for its growth. The CEO John Scannellsaid that the company has already surpassed the early earnings expectations.
However there are few more factors which have bought about uncertainty for the company (NYSE:MOG-A). He said that the falling oil prices, substantial growth in US Dollar’s value and the industrial upset outside the US region are the main factors responsible for these uncertain conditions.As a consequence of this uncertainty and the slow growth of the company, it has revised its guidance reports for the current year and has posted new values for 2015.
Moog (NYSE:MOG-A) first of all reduced the revenue projection by $95 million and now expects annual revenues to be about $2.57 billion. This means earnings per share of $3.85 in case everything stays as the company has planned. However, the revised guidance proved fatal for the company where investors were hoping earnings per share to be near $4.2. Anyhow the company appears to stabilize in the long run and they may have some bright prospects from the military region.