Esterline Posts Loss Despite Revenue Growth

(RTTNews) - Esterline Technologies Corp (ESL), Thursday reported a slip to loss in the fourth quarter, hurt by discontinued operations and restructuring charges, which offset a near 7 percent climb in revenues.

Separately, BAE Systems (BA.L, BAESF, BAESY) said it has agreed with Esterline for the proposed acquisition of its wholly-owned subsidiary, Eclipse Electronic Systems Inc, for cash consideration of about $28 million, subject to closing adjustments.

The Texas-based Eclipse Electronic Systems business provides highly-advanced intelligence, surveillance, and reconnaissance products and services to the U.S. defense and intelligence community. The deal is expected to close during the first quarter of 2015.

Esterline, based in Bellevue, Washington, reported a fourth-quarter net loss of $3.5 million or $0.11 per share, compared with a profit of $65.9 million or $2.06 per share last year.

During the quarter, the company incurred a loss from discontinued operations of $55 million, and integration and certain incremental compliance costs of $8.2 million.

Excluding items, adjusted earnings for the quarter were $1.82 per share, compared with $2.09 per share a year ago.

On average, eight analysts polled by Thomson Reuters estimated earnings of $1.85 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the fourth quarter rose 6.7 percent to $548 million from $513.7 million in the prior year. Analysts estimated revenues of $556.5 million for the quarter.

"We operated well and put a strong finish on an important year for Esterline. In the fourth quarter, we were pleased to have advanced our integration efforts, taken decisive steps to focus our operations, refined our strategic plan and set Esterline on a path for sustained growth and improved profitability," said CEO Curtis Reusser, Esterline.

"We are encouraged by the progress we've made with the divestiture process designed to reshape our portfolio of businesses to better focus our efforts on our best opportunities. We believe that as we progress through next year, we'll experience continued growth and see our margins stabilize," Reusser added.

The company had previously announced the change to its year-end to better align with its peer group and to smoothen the somewhat artificial seasonality of the prior fiscal year-end timing.

For the fiscal year 2015, an 11-month period ending on October 2, 2015, the company expects adjusted earnings of $5.35 to $5.75 per share on revenues of $1.85 billion to $1.95 billion.

Analysts currently expect earnings of $6.73 per share on revenues of $2.22 billion for 2015.

ESL closed Thursday at $117.53, up $0.44 or 0.38%, on a volume of 169k shares on the NYSE.