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Once these most recent quarterly results are finalized, they will be run through Ratings' model and our ratings will be adjusted accordingly. To keep up to date on all of our ratings, visit Ratings Screener.

On May 28, 2009,

Esterline Technologies


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reported an increase of 2.1% in its Q2 FY09 earnings, driven by improved revenues year-over-year, dragged down by customers reducing inventory levels. Net income increased to $25.71 million or $0.86 per share from $25.19 million or $0.84 per share a year ago. Income from continuing operations grew 5.8% to $25.34 million or $0.85 per share, which missed the most recent consensus estimate of $0.96 per share.

Total revenue increased to $359.50 million from $358.03 million in Q2 FY08, led by a surge in its Avionics and Controls segment sales, partially offset by declining orders on the back of decreasing commercial aviation demand. Revenue from Avionics and Controls rose 14.9% to $169.11 million from $147.17 million. However, revenue from Sensors and Systems declined 10.9% to $86.76 million from $97.33 million, and that from Advanced Materials decreased 8.7% to $103.64 million from $113.53 million on a year-over-year basis.

Cost of sales increased 4.3% to $246.90 million from $236.65 million. Gross profit margin declined 260 basis points to 31.30% from 33.90% in Q2 FY08. This decline was due to currency related mark-to-market requirements, adjustments to long-term contracts and the impact of starting a new manufacturing facility in Mexico. Additionally, selling, general, and administrative expenses fell 5.3% to $54.62 million from $57.70 million, while research, development, and engineering expenses plummeted 27.0% to $18.29 million from $25.05 million in same quarter a year ago.

Meanwhile, the company emphasized that its backlog exceeds $1.00 billion. ESL added that the 787, the Joint Strike Fighter and the T-6B military trainer will be successful programs for the company.

For FY09, the company reduced its earnings per share guidance to range between $3.00 and $3.20 due to uncertainty in the industry, declining business jet and spare parts demand, and potential timing issues with foreign shipments of countermeasure flares.