Moog Inc. Reports Second Quarter 2025 Results With Record Sales and Strong Operational Performance
EAST AURORA, N.Y.--(BUSINESS WIRE)--April 25, 2025--
Moog Inc. (NYSE: MOG.A and MOG.B), a worldwide designer, manufacturer and systems integrator of high-performance precision motion and fluid controls and control systems, today reported fiscal second quarter 2025 diluted earnings per share of $1.75 and adjusted diluted earnings per share of $1.92, reflecting strong operational performance.
(in millions, except per
share results) Three Months Ended
----------------------------------------
Q2 2025 Q2 2024 Deltas
-------------- --------- -------------
Net sales $ 935 $ 930 0%
Operating margin 11.7% 12.0% (30) bps
Adjusted operating margin 12.5% 13.6% (110) bps
Diluted net earnings per
share $ 1.75 $1.86 (6)%
Adjusted diluted net earnings
per share $ 1.92 $2.19 (12)%
Net cash provided (used) by
operating activities $ 39 $ (44) $ 83
Free cash flow $ 2 $ (84) $ 86
------------------------------ ----- --- ---- ---- ---
See the reconciliations of adjusted financial results and free cash
flow to reported results included in the financial statements herein
for the periods ended March 29, 2025, and March 30, 2024.
Quarter Highlights
-- Net sales increased primarily in Military Aircraft and Commercial
Aircraft, while sales in Industrial declined due to simplification
actions.
-- Operating margin declined modestly due to the absence of the prior year's
one-time 150 basis point benefit from the Employee Retention Credit $(ERC)$,
masking stronger operational performance.
-- Adjusted operating margin declined due to the absence of prior year
benefit which offset stronger operational performance, primarily in
Industrial and in Military Aircraft.
-- Diluted net earnings per share declined due to last year's ERC, partially
offset by lower adjustments and higher operating margin.
-- Adjusted diluted net earnings per share declined due to last year's ERC,
partially offset by higher adjusted operating margin.
-- Free cash flow was driven by lower working capital requirements.
-- Twelve-month backlog remained steady at $2.5 billion.
-- Reiterated 2025 guidance, noting potential net tariff risk to operating
profit of $10 million to $20 million.
"We have delivered another quarter of strong financial results due to our unrelenting focus on operational performance," said Pat Roche, CEO. "We achieved record sales and drove improved operating margin and earnings per share, both net of the prior year's one-time Employee Retention Credit. In addition, we delivered free cash flow in line with our plan."
Segment Results
Sales in the second quarter of 2025 increased marginally to $935 million compared to the second quarter of 2024. Military Aircraft sales increased 6% to $214 million, driven by the continued ramp-up of the FLRAA program. Commercial Aircraft sales increased 4% to $216 million, reflecting strong aftermarket demand partially offset by production delays on certain business jet and narrow-body programs. Space and Defense sales increased 1% to $270 million, supported by broad-based defense demand. These gains were partially offset by a 7% decline in Industrial sales to $234 million, primarily due to divestitures and purposeful product exits.
Operating margin was 11.7% in the second quarter, down 30 basis points compared to the second quarter of 2024, which included a one-time 150 basis point benefit from the ERC. Space and Defense operating margin declined 370 basis points to 12.1%, reflecting the absence of the prior year's ERC benefit. Commercial Aircraft operating margin declined 20 basis points to 11.8%, driven by pressures arising from OEM customers' production delays, partially offset by stronger aftermarket activity. Partially offsetting these margin declines was a Military Aircraft operating margin increase of 280 basis points to 11.1%. Lower amounts of restructuring and other charges, along with stronger operational performance in the current quarter, were partially offset by the prior year's benefits of the mature product line sale and the ERC. Additionally, Industrial operating margin increased 50 basis points to 11.6%, driven by simplification initiatives.
Adjusted operating margin excludes $14 million and $7 million in restructuring and other charges in the second quarters of 2024 and 2025, respectively. Excluding these charges, total company adjusted operating margin decreased 110 basis points from 13.6% in 2024 to 12.5% in 2025. However, adjusted operating margin increased 40 basis points from a year ago, excluding the ERC benefit. Adjusted operating margin in Industrial increased 90 basis points to 13.4% driven by simplification initiatives. Commercial Aircraft adjusted operating margin declined 20 basis points to 11.8%, driven by pressures arising from OEM customers' production delays, partially offset by stronger aftermarket activity. Military Aircraft adjusted operating margin decreased 140 basis points as the prior year's benefits of the mature product line sale and the ERC were partially offset by stronger operational performance in the current quarter. Space and Defense adjusted operating margin decreased 330 basis points due to the absence of the prior year's ERC.
Free Cash Flow Results
Free cash flow in the second quarter was $2 million. This result reflects strong earnings, halted growth in physical inventories and secured customer advances, partially offset by the timing of collections.
2025 Financial Guidance
"Our underlying business is strong, and we are reiterating our guidance on sales, adjusted operating margin and adjusted earnings per share," said Jennifer Walter, CFO. "We acknowledge the potential for pressure on our results from tariffs and we are taking appropriate steps to significantly mitigate the impact on our business."
FY 2025 Guidance
-------------------------------
Current (1) Previous
Net sales (in billions) $ 3.7 $ 3.7
Operating margin 12.7% 12.9%
Adjusted operating margin 13.0% 13.0%
Diluted net earnings per share(2) $ 7.89 $ 8.06
Adjusted diluted net earnings per
share(2) $ 8.20 $ 8.20
Free cash flow conversion 50% 50 - 75%
----------------------------------------- --- ------ ---------
(1) Current guidance excludes potential net tariff risk. (2) Diluted net
earnings per share and Adjusted diluted net earnings per share figures
are forecasted to be within range of +/- $0.20.
Conference call information
In conjunction with today's release, Pat Roche, CEO, and Jennifer Walter, CFO, will host a conference call today beginning at 10:00 a.m. ET, which will be simultaneously broadcast live online. Listeners can access the call and supplemental financial materials at www.moog.com/investors/communications.
Cautionary Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which can be identified by words such as: "may," "will," "should," "believes," "expects," "expected," "intends," "plans," "projects," "approximate," "estimates," "predicts," "potential," "outlook," "forecast," "anticipates," "presume," "assume" and other words and terms of similar meaning (including their negative counterparts or other various or comparable terminology). These forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995, are neither historical facts nor 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.
Although it is not possible to create a comprehensive list of all factors that may cause our 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 are described in Item 1A "Risk Factors" of our Annual Report on Form 10-K and in our other periodic filings with the Securities and Exchange Commission ("SEC") and include, but are not limited to, risks relating to: (i) our operation in highly competitive markets with competitors who may have greater resources than we possess; (ii) our operation in cyclical markets that are sensitive to domestic and foreign economic conditions and events; (iii) our heavy dependence on government contracts that may not be fully funded or may be terminated; (iv) supply chain constraints and inflationary impacts on prices for raw materials and components used in our products; (v) failure of our subcontractors or suppliers to perform their contractual obligations; and (vi) our accounting estimations for over-time contracts and any changes we need to make thereto. You should evaluate all forward-looking statements made in this press release in the context of these risks and uncertainties.
While we believe we have identified and discussed in our SEC filings 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 we make 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 press release, except as required by applicable law.
Moog Inc.
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
(dollars in thousands, except per share data)
Three Months Ended Six Months Ended
------------------------ ------------------------
March 29, March 30, March 29, March 30,
2025 2024 2025 2024
------------------ ----------- ----------- ----------- -----------
Net sales $ 934,840 $ 930,303 $ 1,845,155 $ 1,787,153
Cost of sales 676,648 663,350 1,344,688 1,287,001
Inventory
write-down 2,149 175 2,149 175
---------- ---------- ---------- ----------
Gross profit 256,043 266,778 498,318 499,977
Research and
development 24,481 28,382 48,086 58,961
Selling,
general and
administrative 133,102 124,961 260,883 243,686
Interest 19,548 18,003 36,550 34,697
Asset
impairment -- 6,750 -- 6,750
Restructuring 2,425 6,750 6,209 8,639
Other 2,908 3,183 4,432 5,884
---------- ---------- ---------- ----------
Earnings before
income taxes 73,579 78,749 142,158 141,360
Income taxes 17,825 18,746 33,291 33,545
---------- ---------- ---------- ----------
Net earnings $ 55,754 $ 60,003 $ 108,867 $ 107,815
---------- ---------- ---------- ----------
Net earnings per
share
Basic $ 1.77 $ 1.88 $ 3.43 $ 3.38
Diluted $ 1.75 $ 1.86 $ 3.38 $ 3.34
---------- ---------- ---------- ----------
Weighted average
common shares
outstanding
Basic 31,558,372 31,967,828 31,764,917 31,934,965
Diluted 31,942,315 32,335,418 32,174,804 32,295,762
------------------ ---------- ---------- ---------- ----------
Moog Inc. RECONCILIATION TO ADJUSTED NET EARNINGS BEFORE TAXES,
INCOMES TAXES, NET EARNINGS AND DILUTED NET EARNINGS PER SHARE
(UNAUDITED) (dollars in thousands)
Three Months Ended Six Months Ended
------------------------- --------------------------
March 29, March 30, March 29, March 30,
2025 2024 2025 2024
------------- ------------ ----------- ------------ ------------
As Reported:
Earnings
before
income
taxes $73,579 $78,749 $142,158 $141,360
Income taxes 17,825 18,746 33,291 33,545
Effective
income tax
rate 24.2% 23.8% 23.4% 23.7%
Net earnings 55,754 60,003 108,867 107,815
Diluted net
earnings
per share $ 1.75 $ 1.86 $ 3.38 $ 3.34
Restructuring and Other
Charges:
Earnings
before
income
taxes $ 7,343 $ 7,590 $ 13,399 $ 9,479
Income taxes 1,801 1,852 3,313 2,350
Net earnings 5,542 5,738 10,086 7,129
Diluted net
earnings
per share $ 0.17 $ 0.18 $ 0.31 $ 0.22
Asset
Impairment:
Earnings
before
income
taxes $ -- $ 6,750 $ -- $ 6,750
Income taxes -- 1,593 -- 1,593
Net earnings -- 5,157 -- 5,157
Diluted net
earnings
per share $ -- $ 0.16 $ -- $ 0.16
As Adjusted:
Earnings
before
income
taxes $80,922 $93,089 $155,557 $157,589
Income taxes 19,626 22,191 36,604 37,488
Effective
income tax
rate 24.3% 23.8% 23.5% 23.8%
Net earnings 61,296 70,898 118,953 120,101
Diluted net
earnings
per share $ 1.92 $ 2.19 $ 3.70 $ 3.72
------------- ------ --- ------ ------- -------
The diluted net earnings per share associated with the adjustments
in the table above may not reconcile when totaled due to rounding.
Results shown above have been adjusted to exclude impacts associated with restructuring and other charges related to continued portfolio shaping and footprint rationalization activities, as well as asset impairments due to program termination and the devaluation of an investment. While management believes that these adjusted financial measures may be useful in evaluating the financial condition and results of operations of the Company, this information should be considered supplemental and is not a substitute for financial information prepared in accordance with GAAP.
Moog Inc.
CONSOLIDATED SALES AND OPERATING PROFIT (UNAUDITED)
(dollars in thousands)
Three Months Ended Six Months Ended
-------------------------- ------------------------------
March 29, March 30, March 29, March 30,
2025 2024 2025 2024
---------------- ------------ ------------ -------------- --------------
Net sales:
Space and
Defense $270,184 $266,787 $ 517,968 $ 496,915
Military
Aircraft 213,849 202,500 427,269 388,744
Commercial
Aircraft 216,381 207,594 437,304 401,816
Industrial 234,426 253,422 462,614 499,678
------- ------- --------- ---------
Net sales $934,840 $930,303 $1,845,155 $1,787,153
---------------- ------- ------- --------- ---------
Operating
profit:
Space and
Defense $ 32,781 $ 42,243 $ 61,320 $ 67,540
12.1% 15.8% 11.8% 13.6%
Military
Aircraft 23,722 16,769 46,638 36,358
11.1% 8.3% 10.9% 9.4%
Commercial
Aircraft 25,591 24,845 49,795 45,471
11.8% 12.0% 11.4% 11.3%
Industrial 27,213 28,155 52,711 57,179
11.6% 11.1% 11.4% 11.4%
------- ------- --------- ---------
Total operating
profit 109,307 112,012 210,464 206,548
11.7% 12.0% 11.4% 11.6%
Deductions from
operating
profit:
Interest
expense 19,548 18,003 36,550 34,697
Equity-based
compensation
expense 3,695 3,047 8,020 7,212
Non-service
pension
expense 1,939 3,191 3,885 6,378
Corporate and
other
expenses,
net 10,546 9,022 19,851 16,901
---------------- ------- ------- --------- ---------
Earnings before
income taxes $ 73,579 $ 78,749 $ 142,158 $ 141,360
---------------- ------- ------- --------- ---------
Moog Inc.
RECONCILIATION TO ADJUSTED OPERATING PROFIT AND MARGINS (UNAUDITED)
(dollars in thousands)
Three Months Ended Six Months Ended
-------------------------- --------------------------
March 29, March 30, March 29, March 30,
2025 2024 2025 2024
--------------- ------------ ------------ ------------ ------------
Space and
Defense
operating
profit - as
reported $ 32,781 $ 42,243 $ 61,320 $ 67,540
Asset
impairment -- 304 -- 304
Restructuring
and other 1,138 -- 2,068 --
------- ------- ------- -------
Space and
Defense
operating
profit - as
adjusted $ 33,919 $ 42,547 $ 63,388 $ 67,844
12.6% 15.9% 12.2% 13.7%
--------------- ------- ------- ------- -------
Military
Aircraft
operating
profit - as
reported $ 23,722 $ 16,769 $ 46,638 $ 36,358
Asset
impairment -- 6,446 -- 6,446
Restructuring
and other 2,000 3,963 2,591 3,963
------- ------- ------- -------
Military
Aircraft
operating
profit - as
adjusted $ 25,722 $ 27,178 $ 49,229 $ 46,767
12.0% 13.4% 11.5% 12.0%
--------------- ------- ------- ------- -------
Commercial
Aircraft
operating
profit - as
reported and
adjusted $ 25,591 $ 24,845 $ 49,795 $ 45,471
11.8% 12.0% 11.4% 11.3%
--------------- ------- ------- ------- -------
Industrial
operating
profit - as
reported $ 27,213 $ 28,155 $ 52,711 $ 57,179
Restructuring
and other 4,205 3,627 8,740 5,516
------- ------- ------- -------
Industrial
operating
profit - as
adjusted $ 31,418 $ 31,782 $ 61,451 $ 62,695
13.4% 12.5% 13.3% 12.5%
--------------- ------- ------- ------- -------
Total
operating
profit - as
adjusted $116,650 $126,352 $223,863 $222,777
--------------- ------- ------- ------- -------
12.5% 13.6% 12.1% 12.5%
--------------- ------- ------- ------- -------
While management believes that these adjusted financial measures may be useful in evaluating the financial condition and results of operations of the Company, this information should be considered supplemental and is not a substitute for financial information prepared in accordance with GAAP.
Moog Inc.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
March 29, September 28,
2025 2024
--------------------------------------- ------------ -----------------
ASSETS
Current assets
Cash and cash equivalents $ 62,124 $ 61,694
Restricted cash 602 123
Receivables, net 537,179 419,971
Unbilled receivables 733,762 709,014
Inventories, net 902,551 863,702
Prepaid expenses and other current
assets 95,554 86,245
---------- ----------
Total current assets 2,331,772 2,140,749
Property, plant and equipment, net 960,015 929,357
Operating lease right-of-use assets 55,354 52,591
Goodwill 825,415 833,764
Intangible assets, net 57,915 63,479
Deferred income taxes 31,638 20,991
Other assets 57,146 52,695
---------- ----------
Total assets $ 4,319,255 $ 4,093,626
--------------------------------------- ---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 293,052 $ 292,988
Accrued compensation 69,411 101,127
Contract advances and progress
billings 306,772 299,732
Accrued liabilities and other 282,180 305,180
---------- ----------
Total current liabilities 951,415 999,027
Long-term debt, excluding current
installments 1,165,662 874,139
Long-term pension and retirement
obligations 172,395 167,161
Deferred income taxes 26,384 27,738
Other long-term liabilities 167,982 164,928
---------- ----------
Total liabilities 2,483,838 2,232,993
---------- ----------
Shareholders' equity
Common stock - Class A 43,852 43,835
Common stock - Class B 7,428 7,445
Additional paid-in capital 750,119 784,509
Retained earnings 2,759,484 2,668,723
Treasury shares (1,204,032) (1,082,240)
Stock Employee Compensation Trust (162,945) (194,049)
Supplemental Retirement Plan Trust (141,490) (163,821)
Accumulated other comprehensive loss (216,999) (203,769)
---------- ----------
Total shareholders' equity 1,835,417 1,860,633
---------- ----------
Total liabilities and shareholders'
equity $ 4,319,255 $ 4,093,626
--------------------------------------- ---------- ----------
Moog Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)
Six Months Ended
------------------------
March 29, March 30,
2025 2024
-------------------------------------------- ---------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 108,867 $ 107,815
Adjustments to reconcile net earnings to
net cash provided (used) by operating
activities:
Depreciation 45,822 42,276
Amortization 4,629 5,296
Deferred income taxes (12,252) (17,805)
Equity-based compensation expense 8,020 7,212
Asset impairment -- 6,750
Other 2,997 2,382
Changes in assets and liabilities
providing (using) cash:
Receivables (123,555) 17,469
Unbilled receivables (26,967) (86,197)
Inventories (54,209) (77,396)
Accounts payable 1,975 1,847
Contract advances and progress
billings 9,964 24,512
Accrued expenses (30,966) 903
Accrued income taxes (24,986) 10,833
Net pension and post retirement
liabilities 12,986 5,687
Other assets and liabilities (15,187) (35,195)
-------- --------
Net cash provided (used) by
operating activities (92,862) 16,389
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of businesses, net of cash
acquired -- (5,911)
Purchase of property, plant and equipment (70,382) (77,530)
Net proceeds from businesses sold 13,487 --
Other investing transactions (2,062) (515)
-------- --------
Net cash provided (used) by
investing activities (58,957) (83,956)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from revolving lines of credit 752,500 509,500
Payments on revolving lines of credit (462,000) (425,000)
Payments on finance lease obligations (4,501) (2,741)
Payment of dividends (18,106) (17,572)
Proceeds from sale of treasury stock 7,825 7,579
Purchase of outstanding shares for
treasury (126,425) (20,238)
Proceeds from sale of stock held by SECT 19,289 15,788
Purchase of stock held by SECT (14,808) (9,407)
Other financing transactions (1,457) --
-------- --------
Net cash provided (used) by
financing activities 152,317 57,909
-------- --------
Effect of exchange rate changes on cash (2,309) 245
-------- --------
Increase (decrease) in cash, cash
equivalents and restricted cash (1,811) (9,413)
Cash, cash equivalents and restricted
cash at beginning of year (1) 64,537 69,144
-------- --------
Cash, cash equivalents and restricted
cash at end of period $ 62,726 $ 59,731
-------------------------------------------- -------- --------
(1) Beginning of year cash balance at September 29, 2024, includes
cash related to assets held for sale of $2,720.
Moog Inc. RECONCILIATION OF NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES TO FREE CASH FLOW (UNAUDITED) (dollars in thousands)
Three Months Ended Six Months Ended
-------------------------- ---------------------------
March 29, March 30, March 29, March 30,
2025 2024 2025 2024
------------- ------------ ------------ ------------- ------------
Net cash
provided
(used) by
operating
activities $ 39,422 $(44,002) $ (92,862) $ 16,389
Purchase of
property,
plant and
equipment (37,604) (40,114) (70,382) (77,530)
Receivables
Purchase
Agreement -- -- -- (25,000)
------- ------- -------- -------
Free cash
flow $ 1,818 $(84,116) $(163,244) $(86,141)
Adjusted net
earnings $ 61,296 $ 70,898 $ 118,953 $120,101
------- ------- -------- -------
Free cash
flow
conversion 3% (119)% (137)% (72)%
------------- ------- ------- -------- -------
Free cash flow is defined as net cash provided (used) by operating activities, less purchase of property, plant and equipment, less the benefit from the Receivables Purchase Agreement. Free cash flow conversion is defined as free cash flow divided by adjusted net earnings. Free cash flow and free cash flow conversion are not measures determined in accordance with GAAP and may not be comparable with the measures as used by other companies. However, management believes these adjusted financial measures may be useful in evaluating the liquidity, financial condition and results of operations of the Company. This information should be considered supplemental and is not a substitute for financial information prepared in accordance with GAAP.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250425602346/en/
CONTACT: Aaron Astrachan
716.687.4225
(END) Dow Jones Newswires
April 25, 2025 07:55 ET (11:55 GMT)
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