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Jul 01, 2023
Moog Q3 2023 Earnings Report
Moog reported record sales and increased full-year earnings per share guidance.
Key Takeaways
Moog Inc. reported a 10% increase in net sales to $850 million, with growth across all reporting segments. Diluted earnings per share were $1.32, and adjusted diluted earnings per share were $1.37. The company increased its full-year guidance for sales and adjusted earnings per share.
Net sales increased by 10% compared to the third quarter of the previous year, with growth in all three reporting segments. Excluding divestitures, sales increased 11%.
Adjusted operating margin decreased to 10.2% from 10.5% year-over-year, due to additional charges on space vehicle development programs.
Adjusted diluted earnings per share decreased by 15%, as higher interest and corporate expenses offset increased operating profit.
Free cash flow was a use of $19 million, primarily due to growth in net working capital balances, particularly physical inventories.
Moog
Moog
Moog Revenue by Segment
Revenue by Segment
Space & Defense Revenue
CapyFin.comMilitary Aircraft Revenue
CapyFin.comIndustrial Revenue
CapyFin.com Forward Guidance
Moog is increasing its guidance for sales, adjusted operating profit, and adjusted earnings per share, while slightly modifying operating margin down. Free cash flow guidance is now a use of $60 million, reflecting the third quarter growth in physical inventories.
Positive Outlook
- Net sales are expected to be $3,250 million.
- Operating margin is expected to be 11.0%.
- Adjusted operating margin is expected to be 10.9%.
- Diluted net earnings per share are expected to be $5.82.
- Adjusted diluted net earnings per share are expected to be $5.75.
Challenges Ahead
- Free cash flow is now a use of $60 million, reflecting the third quarter growth in physical inventories.
- Incurred additional charges on space vehicle development programs of 150 basis points.
- Adjusted diluted earnings per share decreased 15%, as higher interest and corporate expenses were partially offset by increased operating profit.
- Working capital pressure was primarily due to growth in physical inventories.
- Adjusted operating margin decreased from 10.5% as compared to a year ago.
Revenue & Expenses
Visualization of income flow from segment revenue to net income