CHARLOTTE, N.C. , Feb. 4 /PRNewswire-FirstCall/ --
-- Fourth quarter 2008 income per diluted share of
-- Fourth quarter 2008 sales of
-- Total segment operating income margin increased to 16.3 percent, from 15.8 percent in the fourth quarter 2007.
-- Full year 2008 sales of
-- Full year 2008 income per diluted share from continuing operations of
-- Full year 2009 sales expectations reduced to
Goodrich Corporation (NYSE: GR) announced results today for the fourth quarter and full year 2008 and lowered its outlook for 2009 sales and net income per diluted share, after incorporating updated expectations for 2009 pension expense and to take into account the uncertainty of the global economic environment.
Commenting on the company's performance and its outlook, Marshall Larsen , Chairman, President and Chief Executive Officer said, "Clearly, we are operating in an extremely challenging macroeconomic environment. Goodrich has performed very well in this environment, and we expect to continue our strong performance relative to market trends during 2009. Even though global airline capacity is expected to contract slightly in 2009, we have excellent product positions on the newer, more fuel-efficient airplanes that are least likely to be removed from service. We believe that this positioning will allow us to continue to report 2009 commercial aftermarket sales performance above market trends. We continue to expect commercial airplane original equipment sales growth for Goodrich in 2009, compared to 2008, as Boeing and Airbus are expected to deliver more new airplanes in 2009 than they delivered in 2008. Additionally, we are developing products for the right planes of tomorrow, including significant products for the Boeing 787 Dreamliner, the Airbus A350 XWB, the Bombardier CSeries and the Mitsubishi Regional Jet. These new programs are expected to generate significant new revenues for Goodrich for many years to come, and will help Goodrich sustain its position as an industry leader in its commercial aerospace markets. During 2009, we expect our diversified portfolio of defense and space products to continue to grow, especially in key product areas such as intelligence, surveillance and reconnaissance (ISR) and our helicopter products."
"All of us at Goodrich are actively engaged in efforts to reduce our discretionary spending and control our headcount during these uncertain economic times. We are prepared to act swiftly as economic conditions change to minimize the impact of potential reductions in new aircraft production or further decreases in airline capacity. With our strong balance sheet, excellent cash flow and motivated workforce, we believe we can continue our track record of strong financial performance during 2009 and beyond," Larsen continued.
Fourth Quarter 2008 Results
Goodrich reported fourth quarter 2008 net income of
Net income in the fourth quarter 2008, compared with the fourth quarter 2007, was affected by the overall increase in sales and improved operational efficiencies in most business units. Three other factors affected fourth quarter net income, compared to the fourth quarter 2007, including:
-- The fourth quarter 2008 results included pre-tax income of
-- The company reported an effective tax rate of 23 percent for the fourth quarter of 2008, compared with an effective tax rate of 33 percent during the fourth quarter 2007. The effective tax rate for the fourth quarter 2008 included the full year 2008 benefit of the extension of the U.S. Research and Development tax credit, which became law in October 2008 . The company also benefited from lower than expected effective state tax rates and a low effective rate on the gain associated with the formation of the Rolls-Royce joint venture noted above.
-- The fourth quarter 2007 results included pre-tax income of
The increased overall sales for the quarter reflected continued growth in most of the company's major market channels. For the fourth quarter 2008 compared with the fourth quarter 2007, sales changes by market channel were as follows:
-- Large commercial airplane original equipment sales decreased by 11 percent. Sales to Airbus grew by about 9 percent, but sales to Boeing declined by about 40 percent primarily due to the machinists' strike which resulted in fewer deliveries of components for Boeing airplanes,
-- Regional, business and general aviation airplane original equipment sales increased by 15 percent,
-- Large commercial, regional, business and general aviation airplane aftermarket sales increased by 4 percent, and
-- Defense and space sales of both original equipment and aftermarket products and services increased by 7 percent.
Sales during the fourth quarter 2008, compared to the fourth quarter 2007,
were negatively affected by
Net cash provided by operating activities during the fourth quarter 2008
Full Year 2008 Results
For the full year 2008, the company reported income from continuing
Net income for the full year 2008 was
The 10 percent increase in overall sales is primarily attributable to continued sales growth in the company's major market channels, which experienced full year 2008 growth as follows:
-- Large commercial airplane original equipment sales increased by 7 percent,
-- Regional, business and general aviation airplane original equipment sales increased by 23 percent,
-- Large commercial, regional, business and general aviation airplane aftermarket sales increased by 9 percent, and
-- Defense and space sales of both original equipment and aftermarket products and services increased by 11 percent.
Sales during the full year 2008, compared to the full year 2007, were
negatively affected by
Net cash provided by operating activities during the full year 2008 was
-- On December 31, 2008 , Goodrich and Rolls-Royce completed the formation of a joint venture company to develop and supply engine controls for Rolls-Royce aero engines. The joint venture company will operate as Aero Engine Controls. Each of the contributing companies owns 50 percent of Aero Engine Controls. Goodrich will retain the aftermarket products and services business associated with the joint venture's products.
-- On December 9, 2008 , Goodrich was selected by Airbus to supply wheels and carbon brakes for all variants of the A350 XWB family of aircraft. The selection significantly increases Goodrich's content on the program.
-- On November 25, 2008 , Goodrich received a contract from the U.S. Department of Defense (DOD) for the first operational satellite system in support of Operationally Responsive Space (ORS). The satellite, designated ORS Sat-1, is to be manufactured and integrated by Goodrich's ISR Systems team in Danbury, Connecticut . ORS is focused on the ability to quickly and affordably implement space capabilities that benefit the warfighter.
-- On October 2, 2008 , Goodrich officially opened a 350,000 sq. ft. campus in Mexicali, Mexico focusing primarily on metal treatment processing and fabrication. In December 2008 , Goodrich's Board of Directors approved a plan to develop a 165,000 sq. ft. campus in Tianjin, China to accommodate maintenance, repair and overhaul, original equipment support, enterprise supply chain and shared services activities for the region.
The company's 2009 sales outlook is based on market assumptions for each of its major market channels. The current market assumptions for the full year 2009, compared with the full year 2008 outlook, include:
-- Large commercial airplane original equipment sales are expected to increase by about 3 - 5 percent,
-- Regional, business and general aviation airplane original equipment sales are expected to decrease by approximately 10 percent,
-- Large commercial, regional, business and general aviation airplane aftermarket sales are expected to be approximately flat, with large commercial aftermarket sales up slightly while regional, business and general aviation aftermarket sales are expected to be somewhat lower, compared to 2008. This outlook assumes that worldwide available seat miles (ASMs) decrease by approximately 4 percent in 2009 compared to 2008, and
-- Defense and space sales of both original equipment and aftermarket products and services are expected to increase by about 5 percent.
The company's full year 2009 sales expectations are for sales of
The outlook for 2009 income from continuing operations and net income per
diluted share is for a range of
The 2009 outlook includes, among other factors:
-- Compared to 2008, higher pre-tax pension expense of
-- A full-year effective tax rate of 31 - 32 percent for 2009, and
-- Favorable foreign exchange translation costs for 2009 that are
For 2009, Goodrich expects net cash provided by operating activities,
minus capital expenditures, to exceed 75 percent of net income, including the
impact of announced delays in the Boeing 787 Dreamliner and the Airbus A380
airplane programs. This outlook reflects a continuation of investments to
support these programs, the Airbus A350 XWB and low-cost country manufacturing
and productivity initiatives that are expected to enhance margins over the
near and long term. The company now expects capital expenditures for 2009 to
be in a range of
The current sales, net income and net cash provided by operating activities outlooks for 2009 do not include the impact of acquisitions or divestitures.
The supplemental discussion and tables that follow provide more detailed information about the fourth quarter 2008 segment results.
Goodrich will hold a conference call on February 4, 2009 at 10:00 AM U.S. Eastern Time to discuss this announcement. Interested parties can listen to a live webcast of the conference call, and view the related presentation materials, at www.goodrich.com, or listen via telephone by dialing 913-312-1235.
Goodrich Corporation, a Fortune 500 company, is a global supplier of systems and services to aerospace, defense and homeland security markets. With one of the most strategically diversified portfolios of products in the industry, Goodrich serves a global customer base with significant worldwide manufacturing and service facilities. For more information visit http://www.goodrich.com.
FORWARD-LOOKING INFORMATION IS SUBJECT TO RISK AND UNCERTAINTY
Certain statements made in this document are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding our future plans, objectives and expected performance. Specifically, statements that are not historical facts, including statements accompanied by words such as "believe," "expect," "anticipate," "intend," "should," "estimate," or "plan," are intended to identify forward-looking statements and convey the uncertainty of future events or outcomes. We caution readers that any such forward-looking statements are based on assumptions that we believe are reasonable, but are subject to a wide range of risks, and actual results may differ materially.
Important factors that could cause actual results to differ from expected performance include, but are not limited to:
-- demand for and market acceptance of new and existing products, such as the Airbus A350 XWB and A380, the Boeing 787 Dreamliner, the EMBRAER 190, the Mitsubishi Regional Jet (MRJ), the Bombardier CSeries, the Dassault Falcon 7X and the Lockheed Martin F-35 Lightning II and F-22 Raptor;
-- our ability to extend our commercial OE contracts beyond the initial contract periods;
-- cancellation or delays of orders or contracts by customers or with suppliers, including delays or cancellations associated with the Boeing 787 Dreamliner, the Airbus A380 and A350 XWB aircraft programs, and major military programs;
-- the financial viability of key suppliers and the ability of our suppliers to perform under existing contracts;
-- successful development of products and advanced technologies;
-- the health of the commercial aerospace industry, including the impact of bankruptcies and/or consolidations in the airline industry;
-- global demand for aircraft spare parts and aftermarket services;
-- changing priorities or reductions in the defense budgets in the U.S. and other countries, U.S. foreign policy and the level of activity in military flight operations;
-- the possibility of restructuring and consolidation actions;
-- threats and events associated with and efforts to combat terrorism;
-- the extent to which expenses relating to employee and retiree medical and pension benefits change;
-- competitive product and pricing pressures;
-- our ability to recover under contractual rights of indemnification for environmental and other claims arising out of the divestiture of our tire, vinyl and other businesses;
-- possible assertion of claims against us on the theory that we, as the former corporate parent of Coltec Industries Inc, bear some responsibility for the asbestos-related liabilities of Coltec and its subsidiaries;
-- the effect of changes in accounting policies or tax legislation;
-- cumulative catch-up adjustments or loss contract reserves on long-term contracts accounted for under the percentage of completion method of accounting;
-- domestic and foreign government spending, budgetary and trade policies;
-- economic and political changes in international markets where we compete, such as changes in currency exchange rates, inflation, fuel prices, deflation, recession and other external factors over which we have no control;
-- the outcome of contingencies including completion of acquisitions, divestitures, tax audits, litigation and environmental remediation efforts; and
-- the impact of labor difficulties or work stoppages at our, a customer's or a supplier's facilities
We caution you not to place undue reliance on the forward-looking statements contained in this document, which speak only as of the date on which such statements are made. We undertake no obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date on which such statements were made or to reflect the occurrence of unanticipated events.
Actuation and Landing Systems: Actuation and Landing Systems segment sales
-- Lower large commercial airplane OE sales of approximately
-- Lower defense and space OE and aftermarket sales of approximately
-- Higher non-aerospace sales of approximately
Actuation and Landing Systems segment operating income of
-- Settlement of an A380 claim with Northrop Grumman in the fourth quarter
of 2007 that did not recur in 2008, which resulted in lower income of
-- Favorable product mix across most business units, which resulted in
higher income of approximately
-- Higher pricing net of increased operating costs across all business
units, which resulted in higher income of approximately
Nacelles and Interior Systems: Nacelles and Interior Systems segment sales
-- Higher large commercial airplane aftermarket sales, including spare
parts and MRO volume of approximately
-- Higher defense and space OE and aftermarket sales of approximately
-- Higher regional, business, and general aviation airplane OE sales of
-- Higher large commercial airplane OE sales of approximately
Nacelles and Interior Systems segment operating income of
-- Higher sales volume, primarily in our aerostructures and interiors
business units, which resulted in higher income of approximately
-- Higher operating costs of approximately
Electronic Systems: Electronic Systems segment sales of
-- Higher defense and space OE and aftermarket sales of approximately
-- Higher large commercial, regional, business and general aviation
airplane aftermarket sales of approximately
-- Higher regional, business and general aviation airplane OE sales of
-- Lower large commercial airplane OE sales of approximately
Electronic Systems segment operating income of
-- Higher costs of approximately
-- Higher sales volume offset by unfavorable pricing and product mix,
primarily in our sensors and integrated systems and engine control and
electrical power systems business units, which resulted in higher income of
SOURCE Goodrich Corporation