Sign in

You're signed outSign in or to get full access.

MI

MOOG INC. (MOG-A)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 FY2024 revenue was $917.3M (+5% Y/Y), GAAP EPS $1.33, and adjusted EPS $2.16; adjusted operating margin held at 12.5% Y/Y as Moog closed a record year with positive FY2025 guidance .
  • Segment mix favored Defense: Military Aircraft +17% Y/Y to $216M and Space & Defense +9% to $263M; Industrial fell 5% and Commercial Aircraft rose 2% with margins normalizing after prior-year one-time benefits .
  • FY2025 guidance: revenue $3.70B, operating margin 13.0%, adjusted EPS $8.20 (+/− $0.20), and FCF conversion 50–75%, pointing to continued margin expansion and cash generation .
  • Record 12‑month backlog reached ~$2.5B (up 3% Y/Y), reinforcing forward visibility; Q4 free cash flow was $109M on strong collections and payment timing .

What Went Well and What Went Wrong

  • What Went Well
    • Defense outperformance: Military Aircraft sales +17% to $216M as FLRAA ramped; Military operating margin +590 bps to 11.8% on R&D reduction, improved mix, and cost absorption .
    • Margin execution: Adjusted operating margin improved in Industrial (12.8%, +90 bps) and Space & Defense (13.5%, +70 bps) as pricing and simplification offset mix headwinds; CFO noted adjusted EPS exceeded the high end of guidance .
    • Cash generation: Q4 FCF of $109M driven by strong customer collections and vendor payment timing; 12‑month backlog at a record ~$2.5B supports sustained demand .
  • What Went Wrong
    • GAAP operating margin contracted 100 bps Y/Y to 9.1% on higher simplification and other charges (Industrial, Space & Defense) despite solid underlying execution .
    • Commercial normalization: Commercial Aircraft operating margin fell 680 bps Y/Y to 11.0% given the absence of prior-year retroactive pricing and inventory-sale benefits .
    • Industrial softness: Segment sales declined 5% Y/Y on slower industrial automation, even as medical and automotive test partially offset the headwinds .

Financial Results

  • Quarterly trend (QoQ; fiscal quarters)
MetricQ2 2024Q3 2024Q4 2024
Revenue ($MM)$930.3 $904.7 $917.3
Diluted EPS ($)$1.86 $1.74 $1.33
Adjusted Diluted EPS ($)$2.19 $1.91 $2.16
Operating Margin (%)12.0% 11.6% 9.1%
Adjusted Operating Margin (%)13.6% 12.3% 12.5%
  • Year-over-year (Q4 FY2024 vs Q4 FY2023)
MetricQ4 2023Q4 2024
Revenue ($MM)$872.1 $917.3
Diluted EPS ($)$1.23 $1.33
Adjusted Diluted EPS ($)$2.10 $2.16
Operating Margin (%)10.1% 9.1%
Adjusted Operating Margin (%)12.5% 12.5%
  • Segment breakdown (Q4 FY2024 vs Q4 FY2023)
SegmentSales Q4’23 ($MM)Sales Q4’24 ($MM)Op Margin Q4’23Op Margin Q4’24
Space & Defense$241.2 $262.8 12.3% 10.3%
Military Aircraft$183.6 $215.6 5.9% 11.8%
Commercial Aircraft$193.3 $197.1 17.8% 11.0%
Industrial$254.0 $241.7 5.1% 3.8%
  • KPIs
KPIQ2 2024Q3 2024Q4 2024
12‑mo Backlog ($B)~$2.5 (record) ~$2.5 (record) ~$2.5 (record)
Net Cash from Ops ($MM)$(44.0) $30.2 $155.8
Free Cash Flow ($MM)$(84.1) $(1.9) $109.4
Capex ($MM)$40.1 $32.1 $46.4
FCF Conversion (%)N/A disclosed FY N/A disclosed FY 156% (quarter)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY2025N/A$3.70B New
Operating MarginFY2025N/A13.0% New
Adjusted Operating MarginFY2025N/A13.0% New
Diluted EPS (±$0.20)FY2025N/A$8.20 New
Adjusted Diluted EPS (±$0.20)FY2025N/A$8.20 New
FCF ConversionFY2025N/A50–75% New
Dividend per shareQuarterly$0.28 (declared Aug 2, 2024) $0.28 (payable Dec 6, 2024) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2, Q3)Current Period (Q4)Trend
Pricing & simplificationQ2: margin enhancement, ERC and pricing across segments ; Q3: margin expansion across segments Pricing “firmly embedded”; simplification scaling; 80/20 deployed to 5 more sites, now ~70% of sales coverage; >840 leaders trained Strengthening execution
FLRAA rampQ2: FLRAA ramp supported Military ; Q3: Military +18% on FLRAA Military +17% on FLRAA; margin +590 bps to 11.8% Continued tailwind
Industrial demandQ2: automation slowdown ; Q3: Industrial −1% Industrial −5%; mix/product transfers; adjusted margin +90 bps to 12.8% on pricing Soft demand, better pricing
Space vehicle programsQ2: S&D margin +460 bps (15.8%) on program performance ; Q3: +490 bps to 12.6% S&D sales +9%; adjusted margin +70 bps to 13.5% Solid performance
Backlog/Defense demandQ2: backlog +9% to ~$2.5B (record) ; Q3: +7% to ~$2.5B Backlog +3% to record ~$2.5B; strong European defense demand Durable visibility
Portfolio shapingQ2: gain on sale of buildings ; Q3: no notable asset sales Post-year-end sales of Brno motors and Luxembourg manifold facilities (footprint consolidation) Ongoing simplification

Management Commentary

  • “Our fourth quarter was strong, bringing to a close an exceptional year with record sales and expanded margins.” — Pat Roche, CEO .
  • “Adjusted operating margin was robust and on plan, and adjusted earnings per share exceeded the high end of our guidance range.” — Jennifer Walter, CFO .
  • “We are continuing to make excellent progress on driving margin enhancement through pricing and simplification… We deployed 80/20 to five additional sites, now covering 70% of our business by sales and trained more than 80 more leaders, bringing the total to over 840.” — Pat Roche, CEO (Q4 call) .

Q&A Highlights

  • Analysts focused on Defense growth durability (FLRAA ramp and mix), Industrial softness and recovery cadence, and the path to FY2025 margin/FCF targets; management underscored pricing/simplification traction, strong defense demand (incl. Europe), and cash conversion improvement plans .
  • Clarified non-operating items: Q4 included a ~$10M cumulative interest capitalization adjustment for 2023–2024; non-op in Q4’23 included a pension settlement and favorable litigation, affecting comparability .
  • Portfolio shaping and footprint consolidation are progressing as part of simplification, with site sales and 80/20 deployment expanding to cover ~70% of sales .

Estimates Context

  • S&P Global consensus estimates (EPS, revenue) were unavailable at this time due to a data access limit; as a result, we cannot present verified Street consensus comparisons for Q4 or FY2025 guidance. Values could not be retrieved from S&P Global at the time of analysis.
  • The company did note adjusted EPS exceeded the high end of its own guidance in Q4, indicating outperformance versus internal expectations; FY2025 guide implies continued margin expansion and higher FCF conversion, which may catalyze upward revisions to margin and cash flow assumptions in models .

Key Takeaways for Investors

  • Mix shift and execution: Defense strength (FLRAA, European demand) plus pricing/simplification drove sustained adjusted margins, with Q4 adjusted operating margin at 12.5% despite higher GAAP charges .
  • Commercial normalization: Commercial Aircraft margins reset from unusually strong prior-year levels but remain healthy on volume and pricing; watch for OEM production cadence into FY2025 .
  • Industrial still soft, but resilient: Orders in automation are slower, yet pricing actions and product transfers supported adjusted margin gains in Industrial (12.8% in Q4) .
  • Cash inflection: Q4 FCF of $109M and FY2025 FCF conversion guide of 50–75% highlight cash discipline and working-capital normalization potential .
  • FY2025 setup: Guide to $3.70B revenue and 13% operating margin underpins a margin-expansion narrative; adjusted EPS $8.20 (+/− $0.20) frames earnings power .
  • Backlog supports visibility: Record ~$2.5B 12‑month backlog provides line of sight to continued aerospace and defense growth .
  • Capital returns steady: Dividend maintained at $0.28 per quarter, signaling stability while the company funds growth and simplification initiatives .

Additional Documents Reviewed (Q4 context)

  • Q4 results press release and full 8‑K 2.02 package (financial statements, segment reconciliations) .
  • Q4 earnings call transcript hosted on Moog’s investor site and third‑party transcript sources .
  • Other relevant Q4 press release: dividend declaration ($0.28 payable Dec 6, 2024) .
  • Prior quarter earnings for trend analysis: Q3 FY2024 results (8‑K and press) ; Q2 FY2024 results (8‑K and press) .

Notes: All company-reported figures are GAAP unless labeled “adjusted” by Moog; see reconciliations in exhibits. Non‑GAAP adjustments primarily reflect restructuring/simplification charges, asset impairments/fair value adjustments, pension settlement (prior year), and gains/losses on asset sales .