Moog Inc. (NYSE:MOG.A) Q1 2020 Earnings Conference Call - Final Transcript

Jan 24, 2020 • 10:00 am ET


Moog Inc. (NYSE:MOG.A) Q1 2020 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Moog's First Quarter Fiscal Year 2020 Earnings Conference Call. [Operator Instructions]

At this time, I would now like to turn today's conference over to Ms. Ann Luhr. Please go ahead, ma'am.

Ann Marie Luhr

Good morning. Before we begin, we call your attention to the fact that we may make forward-looking statements during the course of this conference call. These forward-looking statements are not guarantees of our future performance and are subject to the risks uncertainties and other factors, that could cause actual performance to differ materially from such statements. A description of these risks uncertainties and other factors is contained in our news release of January 24, 2020 our most recent Form 8-K filed on January 24, 2020 and certain of our other public filings with the SEC.

We have provided some financial schedules to help our listener's better follow along with the prepared comments. For those of you who do not already have the document a copy of today's financial presentation is available on our Investor Relations homepage and webcast page at John?

John R. Scannell

Thanks, Ann. Good morning. Thanks for joining us. This morning, we report on the first quarter of fiscal '20 and fine-tune our guidance for the full year. Overall, it was a strong start to our new fiscal year, in terms of both sales and operating performance. This quarter I'm adopting a new approach to the headlines. First, offering some macroeconomic comments followed by some microeconomic thoughts, and then focusing on what's going on inside our company.

First, from a macroeconomic perspective, there is more clarity around both Brexit and the US trade dispute with China than there was a quarter ago. While neither situation has significant direct impact on our business, the additional clarity should help stabilize the global economy and be positive for both our Industrial and Commercial Aircraft businesses longer term. On the defense side, the continued unrest in the Middle East suggests a reduction in overseas -- US overseas activities is not imminent, which supports our thesis for continued strong defense spending.

Second, within our industry sectors, there have been developments in both our Commercial Aircraft and Industrial markets. The uncertainty around the Boeing 737 Max return to service has increased, while the potential addition of simulator training requirements for Max pilots has also emerged. On the Industrial side, the economic climate in Europe has continue to weaken, particularly in Germany and our team there believes we've not yet seen the bottom. In the defense markets, excluding developments in the Middle East, the underlying narrative concerning near-peer rivals in China and Russia has not changed and spending priorities remain stable.

Third, it was a good quarter for our business. Sales were up 11%, operating profit was up 14%, and earnings per share were up 18%. During the quarter, we witnessed the first flight of The Embraer E2 175 using all Moog flight controls. And our medical manufacturing facility in Costa Rica received a prestigious National awards for operational excellence.