Full Year Earnings were $55.6 Million, or $2.15 on Sales of $972.3 Million
BELLEVUE, Wash., Dec. 7, 2006 — Esterline Corporation (NYSE/ESL www.esterline.com), a leading specialty manufacturer serving aerospace/defense markets, today reported fourth quarter income from continuing operations of $18.4 million, or $.71 per diluted share, on sales of $270.3 million. In the same period last year, income from continuing operations was $15.4 million, or $.60 per diluted share, on $224.1 million sales. Orders received in the fourth quarter totaled $288.2 million. This compared with orders of $204.2 million a year ago. Backlog at year-end was $653.5 million compared with $482.8 million at the end of the prior-year period.
Full year 2006 income from continuing operations was $55.6 million, or $2.15 per diluted share. The prior year’s income from continuing operations was $51.0 million, or $2.02 per diluted share . Including net income from discontinued operations of $7.0 million, or $0.27 per diluted share, net earnings in fiscal 2005 were $58.0 million or $2.29 per diluted share. Sales in fiscal 2006 were $972.3 million compared with last year’s sales of $835.4 million in fiscal 2005.
Robert W. Cremin , Esterline CEO, said the company’s fourth quarter performance “…ended the year on a strong note.” And he emphasized that “…the 19% improvement in net income over last year’s fourth quarter performance included a significantly increased R&D investment — $14.9 million compared with $12.1 million in the same quarter last year.”
Regarding the explosion, Cremin said, “…production at Wallop’s north-side facility is now operating at pre-accident levels.” He said that although the new south facility is still closed, and will remain so for at least another nine months, “…negotiations with our insurance providers are going well.” Related to the incident, the company recorded a $4.9 million insurance recovery in the fourth quarter.
He also said that plant productivity is back to normal levels at the company’s sensors operation.
Looking forward, Cremin said he anticipates a “…solid year ahead for Esterline, supported by record backlogs, new products coming to market, and R&D expenses moderating.” Reflecting that confidence, the company adjusted its FY07 EPS guidance range to $2.45 to $2.60 per share, the mid-range of which represents a 17% increase over FY06.
Emphasizing Esterline’s normal seasonality, Cremin noted that the company’s first quarter has the fewest working days due to the number of holiday-related plant closures. He said that when considering performance in FY07, investors should expect “…EPS in the first couple of quarters to be very similar to their respective FY06 quarters, ramping up strongly in the second half as new programs begin to kick in and R&D expense comes down.”
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