Woodward Governor Co. (WGOV), a provider of energy control systems and components for commercial and military purposes, Wednesday reported a decline in profit for the fourth quarter, reflecting higher costs and expenses that more than offset a moderate rise in net sales. Earnings, however, topped analysts' estimate by a penny. The company also provided guidance for the fiscal 2010.
The Fort Collins, Colorado-based company's net earnings for the fourth quarter declined to $23.82 million or $0.34 per share from $34.43 million or $0.50 per share in the previous year.
On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.33 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter increased 4% to $364.53 million from $350.54 million last year, yet missed analysts' revenue estimate of $381.47 million. Foreign currency exchange rates had a negative impact on net sales of about $5 million in the fiscal 2009 fourth quarter.
Organic net sales which excludes Airframe Systems' segment external sales of $109.6 million were $255.0 million, down about 27% from $350.5 million in the fiscal 2008 fourth quarter.
By segment, sales from Turbine Systems declined 14% to $148.35 million from a year ago, reflecting declines in aerospace OEM and industrial equipment markets, while aftermarket sales remained consistent with the prior year. Airframe Systems reported sales of $110.35 million for the fourth quarter reflecting stable defense markets and weakness in the business and regional jet markets.
Electrical Power Systems sales declined 40% to $53.72 million from last year. Sales results reflected a broad decline in all markets served by the Electrical Power Systems segment. Net sales from Engine Systems were $73.84 million, down 38% from a year earlier, due to broad declines across all of the company's served markets.
Total costs and expenses rose to $331.73 million from $299.86 million a year ago. Selling, general and administrative expenses increased to $33.95 million from $29.32 million a year earlier.
Amortization charges were $7.95 million, up from $1.57 million last year. Interest expense increased to $9.50 million from $0.86 million last year.
For the fiscal 2009, net earnings declined to $94.35 million or $1.37 per share from $121.88 million or $1.75 per share in the previous fiscal year. Net sales for the year rose 14% to $1.43 billion from $1.26 billion. Foreign currency exchange rates had a negative impact on net organic sales of about 9% and approximately $6 million on organic operating earnings for fiscal 2009.
On an adjusted basis, the company reported earnings per share of $1.57 for the fiscal year 2009. Analysts expected earnings of $1.53 per share on revenues of $1.45 billion for the fiscal year.
Looking forward, the company expects the environment to remain challenging through at least the first half of fiscal 2010. For fiscal 2010, the company anticipates sales to be between $1.4 billion and $1.5 billion and earnings per share to be between $1.40 and $1.60.
Analysts expect earnings of $1.49 per share on revenues of $1.50 billion for the fiscal 2010.
WGOV closed Wednesday's regular trading at $25.80, down 0.27 or 1.04%, on a volume of 373K shares on the Nasdaq. In after hours, the stock further declined 1.02 or 3.95%, trading at $24.78.
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