Quarter Highlights
Net sales of
Operating margin of 11.0% decreased 40 basis points. The absence of the prior year's gain on the sale of two buildings more than offset the current quarter's benefits from pricing and higher production volume. Adjusted operating margin, excluding the gain on the sale of two buildings, expanded 90 basis points to 11.3%.
Diluted earnings per share of
Free cash flow improved by
Twelve-month backlog increased 6% to
'We had a great start to fiscal 2024, setting us up nicely to deliver margin enhancement in line with our investor day plan,' said
Quarter Results
Sales in the first quarter of 2024 increased across all segments compared to the first quarter of 2023. Commercial Aircraft sales increased 47% to
Operating margin decreased 40 basis points to 11.0% in the first quarter of 2024 compared to the first quarter of 2023. Industrial operating margin decreased 400 basis points, as the prior year benefited
Adjusted operating margin in the first quarter of 2024 increased 90 basis points to 11.3% compared to the first quarter of 2023. The only segment with significant adjustments is Industrial, which increased 30 basis points to 12.6% as the benefits of pricing initiatives were partially offset by the absence of the prior year's favorable sales mix.
Free Cash Flow Results
Free cash flow was
2024 Financial Guidance
'We are raising our sales and earnings per share guidance for the year based on our first quarter results, and are holding our operating margin guidance,' said
Cautionary Statement
Information included or incorporated by reference in this press release that does not consist of historical facts, including statements accompanied by or containing words such as 'may,' 'will,' 'should,' 'believes,' 'expects,' 'expected,' 'intends,' 'plans,' 'projects,' 'approximate,' 'estimates,' 'predicts,' 'potential,' 'outlook,' 'forecast,' 'anticipates,' 'presume' and 'assume,' are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance and are subject to several factors, risks and uncertainties, the impact or occurrence of which could cause actual results to differ materially from the expected results described in the forward-looking statements. In evaluating these forward-looking statements, you should carefully consider the factors set forth below.
Although it is not possible to create a comprehensive list of all factors that may cause actual results to differ from the results expressed or implied by our forward-looking statements or that may affect our future results, some of these factors and other risks and uncertainties that arise from time to time are described in Item 1A 'Risk Factors' of our Annual Report on Form 10-K and in our other periodic filings with the
Strategic risks
We operate in highly competitive markets with competitors who may have greater resources than we possess; Our research and development and innovation efforts are substantial and may not be successful, which could reduce our sales and earnings; If we are unable to adequately enforce and protect our intellectual property or defend against assertions of infringement, our business and our ability to compete could be harmed and Our sales and earnings may be affected if we cannot identify, acquire or integrate strategic acquisitions, or as we conduct portfolio shaping and footprint rationalization initiatives.
Market condition risks
The markets we serve are cyclical and sensitive to domestic and foreign economic conditions and events, which may cause our operating results to fluctuate; We depend heavily on government contracts that may not be fully funded or may be terminated, and the failure to receive funding or the termination of one or more of these contracts could reduce our sales and increase our costs; The loss of
Operational risks
A constrained supply chain, as well as inflated prices, across various raw materials and third-party provided components and sub-assemblies have had, and could continue to have, a material impact on our ability to manufacture and ship our products, in addition to adversely impacting our operating profit and balance sheet;
If our subcontractors or suppliers fail to perform their contractual obligations, our prime contract performance and our ability to obtain future business could be materially and adversely impacted;
We face, and may continue to face, risks related to information systems interruptions, intrusions and or new software implementations, which may adversely affect our business operations;
We may not be able to prevent, or timely detect, issues with our products and our manufacturing processes, which may adversely affect our operations and our earnings and The failure or misuse of our products may damage our reputation, necessitate a product recall or result in claims against us that exceed our insurance coverage, thereby requiring us to pay significant damages.
Financial risks
We make estimates in accounting for over-time contracts, and changes in these estimates may have significant impacts on our earnings; We enter into fixed-price contracts, which could subject us to losses if we have cost overruns; Our indebtedness and restrictive covenants under our credit facilities and indenture governing our senior notes could limit our operational and financial flexibility; Significant changes in discount rates, rates of return on pension assets, mortality tables and other factors could adversely affect our earnings and equity and increase our pension funding requirements; A write-off of all or part of our goodwill or other intangible assets could adversely affect our operating results and net worth and Unforeseen exposure to additional income tax liabilities may affect our operating results.
Legal and compliance risks
Contracting on government programs is subject to significant regulation, including rules related to bidding, billing and accounting standards, and any false claims or non-compliance could subject us to fines, penalties or possible debarment;
Our operations in foreign countries expose us to currency, political and trade risks and adverse changes in local legal and regulatory environments could impact our results of operations; Government regulations could limit our ability to sell our products outside
We may face reputational, regulatory or financial risks from a perceived, or an actual, failure to achieve our sustainability goals and The recently received invalidation of our facility security clearance by the
General risks
Future terror attacks, war, natural disasters or other catastrophic events beyond our control could negatively impact our business and
Our performance could suffer if we cannot maintain our culture as well as attract, retain and engage our employees.
While we believe we have identified and discussed above the material risks affecting our business, there may be additional factors, risks and uncertainties not currently known to us or that we currently consider immaterial that may affect the forward-looking statements made herein. Given these factors, risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictive of future results. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to update any forward-looking statement made in this report, except as required by law.
Contact:
Tel: +1 716.687.4225
Email: investorrelations@moog.com
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