Full Year EPS Remains on Target: $1.50 to $1.60
BELLEVUE, Wash., June 1, 2004 — Esterline Corporation ( NYSE /ESL www.esterline.com), a leading specialty manufacturer serving aerospace/defense markets, today reported fiscal 2004 second quarter (ended April 30) income from continuing operations of $9.2 million, or $.43 per diluted share, on $150.2 million sales. Comparable earnings a year ago were $6.0 million, or $.29 per diluted share, on sales of $135.3 million.
Robert W. Cremin , Esterline CEO said, “…industry trends appear to be turning in our favor.” He said that as U.S. and international airline traffic picks up, “…we’re seeing a rebound in our commercial aerospace business.” He noted that the company’s order rate has been steadily improving over the past two quarters, reflecting a gradual return of commercial airline traffic to pre-September 11 levels.
Cremin pointed out that roughly 80% of Esterline’s business is split evenly between commercial aerospace and defense markets. He said that the company’s defense activity continues to be strong, “…with solid demand for our aircraft and land vehicle cockpit components including displays and pilot controls, and our advanced materials.”
He said the remaining 20% stems from non-aerospace commercial applications of the company’s core technologies, notably interface systems for medical equipment. Cremin said, “…medical markets are a natural evolution for our technology,” and noted that GE Healthcare recently presented Esterline’s Advanced Input Systems operation with its Global MVP Award for 2003, recognizing GE Healthcare’s top worldwide overall supplier in terms of performance.
Year-to-date income from continuing operations was $11.1 million, or $.52 per diluted share, on sales of $282.8 million. The results include a previously reported first quarter $1.9 million tax benefit and a $2.9 million after-tax severance expense. For the first six months of fiscal 2003, income from continuing operations was $11.9 million, or $.57 per share, on sales of $261.6 million.
The company also reported $0.7 million in net income, or $.03 per diluted share, in the second quarter from a discontinued operation, W. A. Whitney. In July 2002, Esterline discontinued its Automation segment to focus on its core aerospace/defense business. Esterline continues to pursue the sale of W. A. Whitney. Cremin said, “…Whitney has weathered a prolonged downturn in its industry and is benefiting from improving heavy equipment markets.” He added that Whitney maintains a “…superior reputation for high quality and innovative products.”
Including discontinued operations, the company reported net earnings in the second quarter of fiscal 2004 of $9.9 million, or $.46 per diluted share, compared with $0.2 million, or $.01 per diluted share, in the prior year period. The year-ago period included a loss from discontinued operations of $5.8 million, or ($.28) per diluted share. Year-to-date net earnings were $11.8 million, or $.55 per diluted share, and $6.1 million, or $.29 per diluted share, in the prior year period.
Orders received in the second quarter totaled $158.5 million compared with $165.9 million a year ago.The decrease reflects the timing of receiving combustible ordnance orders. Year-to-date orders are up nearly 6% to $311.8 million from $294.2 million a year ago. Backlog at April 30, 2004 , was $329.9 million compared with $314.3 million at the end of the prior year period, and $321.6 million at the end of last quarter.
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the current intent and expectations of the management of Esterline, are not guarantees of future performance, and involve risks and uncertainties that are difficult to predict. Esterline’s actual results and the timing and outcome of events may differ materially from those expressed in or implied by the forward-looking statements due to changes in aerospace/defense industry demand and other risks detailed in the company's public filings with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K for the year ended October 31, 2003.
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