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29 Jul 16. Embraer cuts sales outlook; makes graft probe provision. Brazilian planemaker Embraer SA cut its outlook for executive jet sales this year and set aside $200m to settle a U.S. graft probe, triggering an unexpected quarterly loss and sending shares to a more than two-year low on Friday.
Embraer said in a securities filing it was nearing a settlement to defer prosecution under the U.S. Foreign Corrupt Practices Act (FCPA) for allegedly bribing officials in the Dominican Republic to secure a deal for defense aircraft.
The provision for that possible deal contributed to a net loss of $99m in the second quarter, according to a securities filing. The result was far worse than a $129m profit a year earlier and the average forecast of a $76m profit in a Reuters poll of analysts.
The world’s third-largest commercial planemaker cut its outlook for executive jet sales this year by 10 aircraft, which lowered estimates for revenue, operating profit and cash flow.
Embraer shares tumbled 13 percent in Sao Paulo to their lowest level since October 2013.
“It was no question a messy quarter,” wrote RBC analyst Derek Spronck in a note to clients. “This feels like a ‘kitchen sink’ quarter to us where management needed to reset expectations.”
Even without the FCPA provision, earnings before interest, taxes, depreciation and amortization would have fallen 15 percent to $152m, missing an average forecast of $189m, which Spronck attributed to weak pricing.
Chief Financial Officer Jose Antonio Filippo told reporters that Embraer was determined to defend pricing on its executive jets in a weak market, which led the company to cut back its deliveries this year.
Weak global growth and a glut of used jets has weighed on demand for new executive aircraft, leading Dassault Aviation cut its delivery forecast for Falcon business jets this month. (Source: Reuters)
29 Jul 16. Moog Reports Third Quarter Results. Moog Inc. (NYSE: MOG.A ) (NYSE: MOG.B) announced today third quarter earnings per share of $1.00, up 6% from a year ago on slightly lower sales of $613m. Cash flow from operating activities was strong in the quarter, at $82 m, while net earnings were flat at $36m.
Total Aircraft Controls sales in the quarter were $274m, up 1% from a year ago. Commercial aircraft sales of $140m were up 8%. Sales of OEM products to Airbus increased 45%, to $28m, on the A350 production ramp up. Boeing OEM product sales were 13% higher, at $66m, on increased sales across all platforms. Commercial aftermarket revenues of $27m were down 12% due to lower initial provisioning of 787 spares and softer business jet activity.
Military aircraft sales of $134m were 5% lower year over year. OEM sales were down 6%, to $84m, due to declines in V-22 tilt rotor and Black Hawk helicopter sales. F-35 production sales were 7% higher. Military aftermarket sales were down 4%, to $50m, as the C-5M Super Galaxy upgrade program winds down. F-35 aftermarket sales were higher on increased depot repair activity.
Space and Defense segment sales were $91m, 5% lower than last year. Space sales were $44m, a decrease of 8% due to lower sales of avionics and components. Defense sales were $47m, down marginally due to slower military vehicle sales.
Sales in the Company’s Industrial Systems segment were flat at $130m. Energy market sales were 8% higher, at $33m, helped by higher sales of wind energy products into Europe and China. Industrial automation sales were $69m, off 3%. Simulation and test product sales were $28m, also off 3%, reflecting strong prior year sales of test equipment.
Components segment sales, at $92m, were 18% lower than last year. Sales of aerospace and defense products were $42m, down 14%, on softer OEM