Goodrich Corp. (GR) reported a 37.4% year-over-year decline in fourth quarter earnings from continuing operations to $105.5 million. Earnings per share came in at 83 cents per share, which was well below the Zacks Consensus Estimate of 89 cents.
The company, which supplies aerospace components, stated that sales declined 3.1% to $1.6 billion from $1.7 billion in the year-ago period. The decrease was primarily caused by adverse impact of current economic conditions on the company’s major market channels coupled with lower reported sales resulting from the formation of the engine controls joint venture with Rolls-Royce (RYCEY). However, overall sales were partially offset by favorable foreign currency translations.
In terms of segment, Actuation and Landing Systems segment sales grew 11.4% year-over-year to $645 million. However, the growth was more than offset by an 11.6% decline in Nacelles and Interior Systems segment sales to $533 million coupled with a 9.6% decrease in Electronic Systems segment to $464 million.
Goodrich’s bottom was also adversely affected by a 20.7% decline in operating income to $191.1 million. The reduction was caused by 31% lower operating income in the Nacelles and Interior Systems segment mainly due to lower aerostructures business sales coupled with a 6% decrease in Electronic System segment’s operating income as a result of reduced sales volume and higher pension costs.
Goodrich reaffirmed its fiscal 2010 EPS outlook in the range of $4.15 to $4.40 with sales expected to reach $7.1 billion. The earnings guidance is behind the Zacks Consensus Estimate of $4.42 per share, derived from 26 covering analysts, which has remained constant over the past 2 months.
We currently have a Neutral recommendation on Goodrich’s shares.
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