Wednesday, energy control products maker Woodward Governor Co. (WGOV) reported a decline in profit for the first quarter from a year ago on lower sales. However, earnings for the quarter came in above analysts' consensus by 2 cents.
First-quarter net earnings attributable to Woodward decreased to $22.35 million from $27.06 million in the prior-year period. Earnings per share declined to $0.32 from $0.39. Analysts polled by Thomson Reuters expected earnings of $0.30 per share for the quarter. Analysts' estimates typically exclude one-time items.
Net sales fell 2% to $339.3 million from $344.7 million last year; lower than analysts' expectations of $347.14 million. Foreign currency exchange rates had a favorable impact on net sales of approximately $9 million.
Excluding $58.2 million of airframe systems' segment sales from its HRT acquisition, the company's organic net sales declined 18% to $281.1 million from $344.7 million. Segement-wise, Woodward's sales from turbine systems decreased 9% to $142.4 million from $156.8 million, sales from electrical power systems declined 8% to $56.8 million from $61.8 million and sales from engine systems fell 36% to $67.9 million from $105.3 million in the year-ago period. However, sales from airframe systems increased to $91.7 million from $52.3 million in the prior-year quarter.
Non-segment expenses totaled $5.4 million, compared to $7.8 million for the same quarter last year. Total costs and expenses increased slightly to $307.81 million from $306.58 million.
Woodward's operating earnings declined to $39.6 million from $44.0 million in the year-ago period due to the decline in organic sales volumes. The decline was partially offset by cost-cutting measures, sales from the recent HRT acquisition and forex gains of $2 million. Organic operating earnings declined 24% to $33.5 million from $44.0 million.
Looking ahead, Woodward expects earnings per share in between $1.40 and $1.60 on net sales in the range of $1.4 billion to $1.5 billion in 2010. Analysts expect the company to report earnings of $1.50 per share on revenues of $1.46 billion for the full-year.
WGOV closed Wednesday's regular trading session at $28.94, down $0.40 or 1.36%, on the Nasdaq.
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