Esterline posts 59 percent jump in 3Q profit

Esterline posts jump in 3Q profit on higher margins as it warns of continuing airline troubles

• On 6:21 pm EDT, Thursday September 3, 2009

BELLEVUE, Wash. (AP) -- Esterline Corp. said Thursday its third-quarter profit jumped 59 percent as margins improved at the aerospace and defense contractor's avionics and controls business.

Net income of $32.6 million, or $1.09 per share, compares with $20.5 million, or 68 cents per share, in the same period last year.

Earnings include a tax benefit of about 10 cents per share.

Analysts surveyed by Thomson Reuters expected earnings of 90 cents per share on revenue of $367.7 million.

Sales of $361.5 million for the quarter ended July 31 were down slightly from $363.5 million in the year-earlier period.

The margin as a percentage of sales rose to 32.4 percent from 31.2 percent in the same period last year. CEO Robert W. Cremin credited improved performance in Esterline's avionics and controls business.

Esterline, based in Bellevue, Wash., raised its 2009 guidance to between $3.10 per share and $3.30 per share, from its previous $3 per share to $3.20 per share, reflecting the third-quarter tax credit.

Cremin said the results will keep the company on pace with its full-year guidance "despite continued uncertainty in the commercial airline industry."

The guidance "reflects some caution," he said.

Sales of spare parts for commercial aviation appear to have bottomed, though Cremin cautioned that sales can be difficult to forecast accurately due to short lead times.

The decline in the business jet market also continues to affect certain operations, particularly Esterline's sensors and systems business, the company said.

In addition, Cremin said shipments of military countermeasure flares could be delayed due to a lack of specialized ships for transporting foreign orders.

"We know the orders will ship," he said. "We just aren't certain at this point if they'll ship in fiscal 2009 or push into 2010."

Shares rose 42 cents to close the regular session at $30.50. After hours when the earnings were released, the stock added $1.30, or 4.3 percent, to $31.80.

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