Electronic equipment and turbines maker Woodward Governor Co. (WGOV) Friday said it lowered its fiscal 2009 guidance from the prior range, citing greater than anticipated declines in order volumes in several of its markets. Woodward also intends to take a series of cost reduction action that would result in a one-time restructuring charge of around $0.13 per share.
In another development, Woodward signed a definitive agreement to acquire critical motion control systems maker, HR Textron from Texton Inc. (TXT) for about $365 million in cash. The acquisition, expected to close in April 2009, will to be neutral to Woodward's earnings in fiscal 2009 and accretive in 2010.
Woodward Governor now expects 2009 earnings in the range of $1.40 to $1.65 per share before the costs of planned restructuring actions and sales in a range of $1.3 billion to $1.4 billion.
Previously, on February 27, 2009, the company projected earnings in the range of $1.65 to $1.90 per share on sales of $1.4 billion to $1.5 billion.
On average, seven analysts polled by Thomson Reuters expected earnings of $1.75 per share on revenues of $1.46 billion. Analysts' estimates typically exclude one-time special items.
As per the purchase agreement between Woodward and HR Textron, Woodward would acquire all of the outstanding shares of HR Textron from Textron Inc, its parent company, and the UK assets used in HR Textron's business. HR Textron would become a wholly owned subsidiary of Woodward and be integrated into Woodward's Airframe Systems business segment.
Textron said the deal is expected to generate about $265 million in net after-tax cash proceeds, however, is expected to reduce 2009 earnings of Textron by about $0.05 per share.
HR Textron provides solutions to customers such as Bell, Boeing, Cessna, General Dynamics, Lockheed Martin, Raytheon and United Technologies.
WGOV closed Friday's regular trading at $17.22, down $0.12 or 0.70%, on a volume of 0.71 million shares.
TXT closed Friday's regular trading at $5.65, down $0.15 or 2.59%, on a volume of 12.10 million shares.
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