Moog Inc. Reports Third Quarter 2025 Results With Both Record Sales and Earnings Per Share

Business Wire

25-07-2025

EAST AURORA, N.Y.--(BUSINESS WIRE)--Moog Inc. (NYSE: MOG.A and MOG.B), a worldwide designer, manufacturer and systems integrator of high-performance precision motion and fluid controls and control systems, today reported fiscal third quarter 2025 net sales of $971 million, diluted earnings per share of $1.87 and adjusted diluted earnings per share of $2.37, all records, reflecting business growth and simplified operations.
(in millions, except per share results)
Q3 2024
Deltas
Net sales
$
971
$
905
7
%
Operating margin
11.5
%
11.6
%
(10) bps
Adjusted operating margin
13.6
%
12.3
%
130 bps
Diluted net earnings per share
$
1.87
$
1.74
7
%
Adjusted diluted net earnings per share
$
2.37
$
1.91
24
%
Net cash provided (used) by operating activities
$
125
$
30
$
95
Free cash flow
$
93
$
(2
)
$
95
See the reconciliations of adjusted financial results and free cash flow to reported results included in the financial statements herein for the periods ended June 28, 2025 and June 29, 2024.
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Quarter Highlights
Net sales increased to a record level, led by strength in Commercial Aircraft, Space and Defense, and Military Aircraft. Industrial declined due to divestitures completed at the beginning of this fiscal year.
Operating margin was relatively unchanged as charges for a program termination and charges for simplification initiatives offset stronger operational performance.
Adjusted operating margin increased due to the benefit from the sale of intellectual property and inventory associated with a non-core product line and a favorable sales mix, partially offset by tariff pressure.
Diluted net earnings per share increased as strong operational performance was partially offset by higher charges for a program termination and charges for simplification initiatives.
Adjusted diluted net earnings per share increased reflecting margin expansion and incremental profit from higher sales.
Free cash flow improved with a conversion greater than 120%.
Twelve-month backlog was at a record level of $2.7 billion with growth primarily driven by Military Aircraft and Space and Defense.
Acquired COTSWORKS after quarter-end, strengthening the Space and Defense product portfolio.
"We have just delivered another quarter of record financial results, reflective of our unrelenting focus on driving improved business performance," said Pat Roche, CEO. "Our teams across the company continue advancing our simplification strategies, and our value proposition to our customers has resulted in strong order intake and a record 12-month backlog. Our employees are driving change and our business is strong, giving us confidence as we look to 2026."
Segment Results
Sales in the third quarter increased 7% to a record $971 million. Sales growth was led by Commercial Aircraft, which increased 16% on strong aftermarket demand. Space and Defense sales increased 11%, reflecting broad-based demand including satellite components and missile control programs. Military Aircraft sales increased 8%, driven by continued ramp-up on the FLRAA program. Industrial sales declined 4% due to previously completed divestitures.
Operating margin in the third quarter was 11.5%, down 10 basis points from the prior year. Military Aircraft operating margin declined 360 basis points to 8.0%, primarily due to charges tied to the termination of a product development effort, along with a less favorable sales mix and increased research and development investment in future programs. Industrial operating margin declined 20 basis points to 9.6%, reflecting charges related to portfolio shaping, facility rationalization and an investment impairment, as well as pressures from tariffs, and were partially offset by the benefit from simplification initiatives. Partially offsetting these declines was an increase in Commercial Aircraft operating margin of 200 basis points to 14.9%, supported by the benefit from the sale of a non-core product line and by record aftermarket sales, partially offset by pressures from tariffs and OEM customers' production delays. In addition, Space and Defense operating margin increased 70 basis points to 13.3%, driven by profitable sales growth.
Adjusted operating margin excludes charges of $20 million and $6 million in the third quarters of 2025 and 2024, respectively, which primarily relate to simplification initiatives and a program termination. Excluding these charges, total company adjusted operating margin increased 130 basis points from 12.3% to 13.6%. Commercial Aircraft adjusted operating margin increased 180 basis points to 14.9%, supported by the benefit from the sale of a non-core product line and by record aftermarket sales, partially offset by pressures from tariffs and OEM customers' production delays. Industrial adjusted operating margin improved 180 basis points to 13.5%, supported by the benefit of the simplification initiatives, including divestitures completed at the start of the year, partially offset by tariff pressure. Space and Defense adjusted operating margin increased 140 basis points to 14.1%, driven by profitable sales growth. Partially offsetting the increases was a decrease in Military Aircraft adjusted operating margin of 30 basis points to 11.6%, due to a less favorable program sales mix and increased research and development investment.
Free Cash Flow Results
Free cash flow for the quarter was $93 million, driven by strong earnings and cash provided by changes in working capital. Capital expenditures were $33 million.
2025 Financial Guidance
'We are increasing our sales guidance from 90 days ago based on the strength of the business. We are updating our adjusted operating margin guidance to reflect the expected pressures associated with tariffs and the underlying strength in our business. We are also moderating our free cash flow guidance based on working capital needs to support our elevated growth," said Jennifer Walter, CFO. "We're on track to close out a record year for sales in 2025. Our business is strong, and we're continuing to expand our operating margin and generate an increasing level of free cash flow."
Conference call information
In conjunction with today's release, Pat Roche, CEO, and Jennifer Walter, CFO, will host a conference call today beginning at 10:00 a.m. ET, which will be simultaneously broadcast live online. Listeners can access the call and supplemental financial materials at www.moog.com/investors/communications.
Cautionary Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which can be identified by words such as: 'may,' 'will,' 'should,' 'believes,' 'expects,' 'expected,' 'intends,' 'plans,' 'projects,' 'approximate,' 'estimates,' 'predicts,' 'potential,' 'outlook,' 'forecast,' 'anticipates,' 'presume,' 'assume' and other words and terms of similar meaning (including their negative counterparts or other various or comparable terminology). These forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995, are neither historical facts nor guarantees of future performance and are subject to several factors, risks and uncertainties, the impact or occurrence of which could cause actual results to differ materially from the expected results described in the forward-looking statements.
Although it is not possible to create a comprehensive list of all factors that may cause our actual results to differ from the results expressed or implied by our forward-looking statements or that may affect our future results, some of these factors and other risks and uncertainties are described in Item 1A 'Risk Factors' of our Annual Report on Form 10-K and in our other periodic filings with the Securities and Exchange Commission ('SEC') and include, but are not limited to, risks relating to: (i) our operation in highly competitive markets with competitors who may have greater resources than we possess; (ii) our operation in cyclical markets that are sensitive to domestic and foreign economic conditions and events; (iii) our heavy dependence on government contracts that may not be fully funded or may be terminated; (iv) supply chain constraints and inflationary impacts on prices for raw materials and components used in our products; (v) failure of our subcontractors or suppliers to perform their contractual obligations; and (vi) our accounting estimations for over-time contracts and any changes we need to make thereto. You should evaluate all forward-looking statements made in this press release in the context of these risks and uncertainties.
While we believe we have identified and discussed in our SEC filings the material risks affecting our business, there may be additional factors, risks and uncertainties not currently known to us or that we currently consider immaterial that may affect the forward-looking statements we make herein. Given these factors, risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictive of future results. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to update any forward-looking statement made in this press release, except as required by applicable law.
Three Months Ended
Nine Months Ended
June 28,
2025
June 29,
2024
June 28,
2025
June 29,
2024
As Reported:
Earnings before income taxes
$
77,982
$
70,905
$
220,140
$
212,265
Income taxes
18,275
14,545
51,566
48,090
Effective income tax rate
23.4
%
20.5
%
23.4
%
22.7
%
Net earnings
59,707
56,360
168,574
164,175
Diluted net earnings per share
$
1.87
$
1.74
$
5.25
$
5.08
Program Terminations 1
Earnings before income taxes
$
8,065
$
—
$
8,065
$
1,992
Income taxes
1,903
—
1,903
470
Net earnings
6,162
—
6,162
1,522
Diluted net earnings per share
$
0.19
$
—
$
0.19
$
0.05
Simplification Initiatives 2
Earnings before income taxes
$
6,805
$
5,818
$
18,204
$
14,457
Income taxes
1,647
1,502
4,487
3,654
Net earnings
5,158
4,316
13,717
10,803
Diluted net earnings per share
$
0.16
$
0.13
$
0.43
$
0.33
Investment Losses 3
Earnings before income taxes
$
3,000
$
—
$
3,000
$
5,294
Income taxes
—
(1,249
)
—
—
Net earnings
3,000
1,249
3,000
5,294
Diluted net earnings per share
$
0.09
$
0.04
$
0.09
$
0.16
Acquisition and Integration 4
Earnings before income taxes
$
481
$
—
$
481
$
—
Income taxes
113
—
113
—
Net earnings
368
—
368
—
Diluted net earnings per share
$
0.01
$
—
$
0.01
$
—
Other Charges 5
Earnings before income taxes
$
1,462
$
111
$
3,462
$
415
Income taxes
344
26
817
98
Net earnings
1,118
85
2,645
317
Diluted net earnings per share
$
0.04
$
—
$
0.08
$
0.01
As Adjusted:
Earnings before income taxes
$
97,795
$
76,834
$
253,352
$
234,423
Income taxes
22,282
14,824
58,886
52,312
Effective income tax rate
22.8
%
19.3
%
23.2
%
22.3
%
Net earnings
75,513
62,010
194,466
182,111
Diluted net earnings per share
$
2.37
$
1.91
$
6.06
$
5.63
The diluted net earnings per share associated with the adjustments in the table above may not reconcile when totaled due to rounding.
1 Charges include costs related to the termination of significant development, production, or support programs, such as write-off and impairments or inventory and long-lived assets, contract termination costs, and other charges.
2 Charges include costs related to footprint rationalization, portfolio shaping and legal entity re-organization activities, such as facility closure costs, employee severance and retention costs, write-off and impairments of inventory and long-lived assets, and other charges.
3 Charges include impairment losses on minority investments.
4 Charges include costs related to acquisition such as amortization of inventory fair value step-up and professional services fees. Charges also include costs related to integrating the businesses, such as employee severance and retention costs, professional services fees, legal entity and facility rationalization costs and other related charges.
5 Other charges include business interruptions from natural causes, litigation matters, and other items that are not part of normal operations.
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While management believes that these adjusted financial measures may be useful in evaluating the financial condition and results of operations of the Company, this information should be considered supplemental and is not a substitute for financial information prepared in accordance with GAAP.
Moog Inc.
(dollars in thousands)
Three Months Ended
Nine Months Ended
June 28,
2025
June 29,
2024
June 28,
2025
June 29,
2024
Space and Defense operating profit - as reported
$
38,261
$
32,635
$
99,581
$
100,175
Simplification Initiatives
406
—
2,474
—
Acquisition Integration
481
—
481
—
Other charges
1,462
112
1,462
416
Space and Defense operating profit - as adjusted
$
40,610
$
32,747
$
103,998
$
100,591
14.1
%
12.7
%
12.9
%
13.3
%
Military Aircraft operating profit - as reported
$
17,994
$
23,965
$
64,632
$
60,323
Program terminations
8,065
—
8,065
1,992
Simplification Initiatives
—
609
591
3,732
Investment losses
—
—
—
5,294
Other charges
—
—
2,000
—
Military Aircraft operating profit - as adjusted
$
26,059
$
24,574
$
75,288
$
71,341
11.6
%
11.9
%
11.5
%
12.0
%
Commercial Aircraft operating profit - as reported
$
32,623
$
24,367
$
82,418
$
69,838
Simplification Initiatives
—
408
—
408
Commercial Aircraft operating profit - as adjusted
$
32,623
$
24,775
$
82,418
$
70,246
14.9
%
13.1
%
12.5
%
11.9
%
Industrial operating profit - as reported
$
22,989
$
24,413
$
75,700
$
81,592
Simplification Initiatives
6,399
4,800
15,139
10,316
Investment losses
3,000
—
3,000
—
Industrial operating profit - as adjusted
$
32,388
$
29,213
$
93,839
$
91,908
13.5
%
11.7
%
13.4
%
12.3
%
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While management believes that these adjusted financial measures may be useful in evaluating the financial condition and results of operations of the Company, this information should be considered supplemental and is not a substitute for financial information prepared in accordance with GAAP
June 28,
2025
September 28,
2024
ASSETS
Current assets
Cash and cash equivalents
$
58,191
$
61,694
Restricted cash
823
123
Receivables, net
529,753
419,971
Unbilled receivables
734,976
709,014
Inventories, net
924,682
863,702
Prepaid expenses and other current assets
153,479
86,245
Total current assets
2,401,904
2,140,749
Property, plant and equipment, net
988,125
929,357
Operating lease right-of-use assets
52,877
52,591
Goodwill
802,089
833,764
Intangible assets, net
57,182
63,479
Deferred income taxes
37,701
20,991
Other assets
56,696
52,695
Total assets
$
4,396,574
$
4,093,626
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable
$
289,160
$
292,988
Accrued compensation
98,292
101,127
Contract advances and progress billings
298,648
299,732
Accrued liabilities and other
302,514
305,180
Total current liabilities
988,614
999,027
Long-term debt, excluding current installments
1,081,674
874,139
Long-term pension and retirement obligations
177,688
167,161
Deferred income taxes
27,664
27,738
Other long-term liabilities
177,233
164,928
Total liabilities
2,452,873
2,232,993
Shareholders' equity
Common stock - Class A
43,864
43,835
Common stock - Class B
7,416
7,445
Additional paid-in capital
769,935
784,509
Retained earnings
2,810,050
2,668,723
Treasury shares
(1,205,305
)
(1,082,240
)
Stock Employee Compensation Trust
(173,214
)
(194,049
)
Supplemental Retirement Plan Trust
(147,042
)
(163,821
)
Accumulated other comprehensive loss
(162,003
)
(203,769
)
Total shareholders' equity
1,943,701
1,860,633
Total liabilities and shareholders' equity
$
4,396,574
$
4,093,626
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Moog Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)
Nine Months Ended
June 28,
2025
June 29,
2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings
$
168,574
$
164,175
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
Depreciation
69,292
64,302
Amortization
6,996
7,677
Deferred income taxes
(18,645
)
(26,483
)
Equity-based compensation expense
12,669
11,301
Asset impairment and inventory write-down
10,988
8,637
Other
4,399
5,374
Changes in assets and liabilities providing (using) cash:
Receivables
(105,346
)
(18,677
)
Unbilled receivables
(35,174
)
(57,723
)
Inventories
(64,095
)
(105,629
)
Accounts payable
(3,301
)
918
Contract advances and progress billings
8,798
(26,882
)
Accrued expenses
(6,645
)
36,928
Accrued income taxes
(22,669
)
9,832
Net pension and post retirement liabilities
15,563
8,783
Other assets and liabilities
(8,941
)
(35,978
)
Net cash provided (used) by operating activities
32,463
46,555
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired
—
(5,911
)
Purchase of property, plant and equipment
(103,041
)
(109,616
)
Net proceeds from businesses sold
13,487
1,627
Other investing transactions
(2,844
)
(646
)
Net cash provided (used) by investing activities
(92,398
)
(114,546
)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from revolving lines of credit
957,500
784,500
Payments on revolving lines of credit
(1,001,500
)
(691,000
)
Proceeds from long-term debt
250,000
—
Payments on finance lease obligations
(7,194
)
(4,468
)
Payment of dividends
(27,247
)
(26,521
)
Proceeds from sale of treasury stock
10,970
7,579
Purchase of outstanding shares for treasury
(127,808
)
(21,832
)
Proceeds from sale of stock held by SECT
20,287
16,670
Purchase of stock held by SECT
(18,505
)
(14,296
)
Other financing transactions
(1,600
)
—
Net cash provided (used) by financing activities
54,903
50,632
Effect of exchange rate changes on cash
(491
)
(267
)
Increase (decrease) in cash, cash equivalents and restricted cash
(5,523
)
(17,626
)
Cash, cash equivalents and restricted cash at beginning of year (1)
64,537
69,144
Cash, cash equivalents and restricted cash at end of period
$
59,014
$
51,518
(1) Beginning of year cash balance at September 29, 2024 includes cash related to assets held for sale of $2,720.
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Free cash flow is defined as net cash provided (used) by operating activities, less purchase of property, plant and equipment, less the benefit from the Receivables Purchase Agreement. Free cash flow conversion is defined as free cash flow divided by adjusted net earnings. Free cash flow and free cash flow conversion are not measures determined in accordance with GAAP and may not be comparable with the measures as used by other companies. However, management believes these adjusted financial measures may be useful in evaluating the liquidity, financial condition and results of operations of the Company. This information should be considered supplemental and is not a substitute for financial information prepared in accordance with GAAP.