Moog Inc. continues robust growth (2024)

Moog Inc.’s business continues to show strong results as the manufacturer ramps up for future production.

The Elma-based motion-control equipment maker reported profits of $60 million in its fiscal second quarter, up 39.5% from a year ago. The company also reported record sales of $930 million, with each of its four business segments posting sales increases.

And Moog’s backlog — a key indicator of future revenues — has reached a record high $2.5 billion.

“It was an exceptional quarter,” said Pat Roche, the CEO. “We’re doing really well financially.”

A look at where the growth came from:

Commercial aircraft. Sales increased 26%, bolstered by a pickup in air travel. Moog is seeing strong demand for replacement parts for aircraft, a trend that Roche anticipates will continue.

“There’s been constraints in the availability of aircraft,” he said. “Therefore, the fleet that’s there today is being used more and more, and that drives aftermarket for us.”

Moog also supplies parts to aircraft makers Airbus and Boeing for newly built planes. Boeing is under pressure over quality issues, but Roche said Boeing’s problems have not had a ripple effect on Moog.

“We’re continuing to manufacture in alignment with Boeing’s plans,” Roche said. “Boeing hasn’t come back and communicated any changes to us on that front. So we keep going with the work that we’re doing.”

Military aircraft. Sales increased 11% as Moog continues to ramp up its work on a new helicopter in development for the Army. Moog is part of Bell Textron’s team for the V-280, which will eventually replace the Black Hawk.

The helicopter work is expected to generate $60 million in revenues for Moog in its current fiscal year. “I would say we’re near full rate with our engineering teams at this point,” Roche said.

Space and defense. Sales rose 9%, amid growing attention to defense spending.

“The geopolitical environment has become even more tense over the past months,” Roche said. “The war in Ukraine appears to be without end in sight, and the conflict in the Middle East risks expanding to a wider regional war.

“Investing in our defense is a clear and pressing priority for the U.S. and its global allied nations,” he said. “Consequently, we are seeing a broad-based increase in demand across our defense applications, notably missile components, space components and space vehicles.”

The demand isn’t strictly U.S.-based, he said. Moog’s European defense business is also growing.

On the space side, Moog’s first four Meteorite space vehicles were launched into orbit in February. The satellites flew as part of a U.S. Space Force mission.

Industrial. Sales were up 4%. The business “has turned out to be more resilient than we had thought,” Roche said. “We know there’s a slowdown coming, because we see that in the incoming orders.” That slowdown is expected to come in industrial automation, but Moog has seen sales rise in other parts of the segment, such as energy products and flight simulator platforms.

Moog has raised its guidance for the current fiscal year. The company now forecasts its sales to rise 7% and its earnings per share to increase 18%.

In other developments:

Moog is making progress resolving an issue with a federal defense agency that has barred the company from entering into new contracts that require a facility security clearance, due to the fact that Roche is not a U.S. citizen

By the end of 2024, Moog expects to start moving some manufacturing equipment into the new building, which will be home to work on the joint strike fighter, and, eventually, the new Army helicopter.

Moog is being sued by in Florida by a defense contract it supplies parts to,L3Harris Technologies. According to media reports, the suit accuses Moog of failing to deliver satellite components in a timely fashion, and that parts delivered were defective.

Roche declined to comment on the accusations during a Friday call with investors. “We will vigorously defend ourselves, of course, against those allegations,” he said.

Roche noted Moog “continues to support L3Harris on their important work that they’re doing, and we have a number of other space vehicle programs that we’re running with them at the moment.”

“That work continues, despite this issue we’re working through,” Roche said.