Goodrich Corporation (GR) announced its fourth quarter and fiscal 2010 results. Its fourth quarter operating earnings were $1.15 per share versus 83 cents in the year-ago quarter. The fourth quarter results handsomely surpassed the Zacks Consensus Estimate of $1.05.
Goodrich reported GAAP earnings of $1.16 per share in fourth quarter versus 82 cents in the year-ago quarter. The results were driven by sales growth in all of the company’s major market channels, strong operational performance, continued success on cost containment initiatives, a lower effective tax rate and favorable changes in estimates for certain long-term contracts. This was, however, partially offset by a charge associated with the early retirement of debt.
Goodrich reported fiscal 2010 operating earnings of $4.50 versus $4.43 in the year-ago quarter and Zacks Consensus Estimate of $4.14. Goodrich reported GAAP earnings of $4.51 per share in fiscal 2010 versus $4.70 in the year-ago period. The year-over-year increase reflects higher overall sales, cost containment initiatives, and other factors.
Operational Statistics
Goodrich’s total operating revenue in fourth quarter 2010 was $1,806.2 million, up 10% from $1,642.3 million in the year-ago quarter. The actual results of the company were, however, lower than the Zacks Consensus Estimate of $1,847 million. During fourth quarter 2010, the company saw commercial aftermarket sales growth of 12% year-over-year.
In fiscal year 2010, total operating revenue was $6,966.9 million versus $6,685.6 million in fiscal year 2009 and Zacks Consensus Estimate of $7,089 million.
Goodrich’s total operating income in fourth quarter 2010 was $240.9 million versus $191.1 million in the year-ago quarter. In fiscal year 2010, total operating income was $998.3 million versus $929.2 million in fiscal year 2009.
Segmental Revenue
Actuation and Landing Systems: In fourth quarter 2010, revenues from this division was $639.2 million versus $645.1 million in the year-ago quarter. The results were driven by lower defense and aftermarket sales.
Nacelles and Interior Systems: In fourth quarter 2010, revenues from this division was $623.6 million versus $533.4 million in the year-ago quarter. The year-over-year growth was driven by higher large commercial, regional, business, and general aviation airplane aftermarket sales.
Electronic Systems: In fourth quarter 2010, revenues from this division was $543.4 million versus $463.8 million in the year-ago quarter. The year-over-year results reflect higher defense and aftermarket sales.
Financial Update
Goodrich ended fiscal 2010 with cash and cash equivalents of $798.9 million versus $811 million at fiscal-end 2009. Long-term debt and capital lease obligations at fiscal-end 2010 was $2,352.8 million versus $2,008.1 million at fiscal-end 2009.
In fourth quarter 2010, Goodrich reported free cash flow of $114 million, down $290 million from fourth quarter 2009 driven by higher contributions from pension plan. During fourth quarter 2010, the company contributed $313 million to its worldwide pension plans versus $64 million during fourth quarter 2009. Capital expenditures were $123 million in the fourth quarter 2010 versus $54 million in fourth quarter 2009.
In fiscal year 2010, free cash flow was $292 million, down $196 million from fourth quarter 2009. During fiscal year 2010, the company contributed $444 million to its worldwide pension plans versus $238 million during fiscal year 2009. Capital expenditures were $222 million in the fourth quarter 2010 versus $169 million in fiscal year 2009.
Guidance
Goodrich maintained its revenue guidance for fiscal 2011 in the range of $7.7 billion – $7.8 billion. The company increased its sales growth expectation for commercial aftermarket sales for 2011 and expects it to be in the range of 7%-9% year over year. This was due to the recent improvements in airline capacity trends, improving airline profitability for our commercial aftermarket products late in fourth quarter 2010.
However, it expects commercial aftermarket sales to be offset by decreased growth expectations for large commercial airplane original equipment sales, which it expects to grow about 15% mainly due to the delayed expected 787 deliveries recently announced by The Boeing Company (BA).
Goodrich Corporation increased it net income per share in the range of $5.30 – $5.45, up 18%-21% year-over-year. Goodrich currently retains a Zacks #2 Rank (Buy rating) on the stock, along with a longer-term Neutral recommendation.
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