Thursday, Esterline Technologies Corp. (ESL), reported an increase in profit for the third quarter, despite lower revenues, benefiting from a rise in gross margin as well as a decline in operating and non-operating expenses. The company's earnings came in well ahead of analysts' consensus.
Esterline's income from continuing operations for the quarter increased to $32.48 million or $1.09 per share from $18.40 million or $0.62 per share last year.
Net earnings for the third quarter increased to $32.64 million or $1.09 per share from $20.48 million or $0.68 per share in the previous year.
On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.90 per share for the third quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter was $361.49 million, down from $363.46 million a year ago. Analysts expected revenues of $367.71 million for the quarter.
By segment, Avionics & Controls reported revenues of $171.03 million, compared to $147.93 million last year. Revenues from Sensors & Systems declined to $84.46 million from $103.32 million in the year earlier. Advanced Materials revenues were down at $106.00 million, compared to $112.22 million last year.
Cost of sales for the quarter was $244.34 million, compared to $250.11 million a year ago. Gross margin improved in the quarter as a percentage of sales to 32.4%, compared to 31.2% in the same period a year ago. Esterline said the margin increase was due primarily to improved performance in Avionics & Controls segment.
Operating expenses for the quarter declined to $74.56 million from $82.42 million in the previous year.
Interest expenses declined to $7.02 million from $7.34 million last year. Income expense was $3.01 million on an effective rate of 8.5%, lower than $6.23 million on an effective rate of 25.3% a year ago. Tax benefit for the quarter amounted to about $0.10 per share.
For the nine-month period, net earnings increased to $85.30 million or $2.86 per share from $76.65 million or $2.56 per share in the same period of the previous year. Net sales for the period declined to $1.03 billion from $1.08 billion last year.
New orders for the first nine months of 2009 were $1.01 billion, compared to $1.15 billion in the same period of 2008. Backlog was $1.07 billion, compared to $1.02 billion end last year.
Looking forward, the company expects earnings in the range of $3.10 to $3.30 per share for fiscal 2009. Analysts currently expect earnings of $3.13 per share for the full year.
ESL closed Thursday's regular trading at $30.50, up 0.42 or 1.40%, on a volume of 451 shares on the NYSE. In after hours, the stock further gained 1.30 or 4.26%, trading at 31.80.
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