Esterline Technologies Earnings: Here’s Why the Stock is Down Now

Esterline Technologies Corp. (NYSE:ESL) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 2.17%.

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Esterline Technologies Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 22.22% to $1.12 in the quarter versus EPS of $1.44 in the year-earlier quarter.

Revenue: Decreased 1.04% to $499.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Esterline Technologies Corp. reported adjusted EPS income of $1.12 per share. By that measure, the company missed the mean analyst estimate of $1.25. It missed the average revenue estimate of $509.57 million.

Quoting Management: Brad Lawrence, Esterline’s Chief Executive Officer, said the company’s second quarter results “…reflect stable revenues, steady margins, controlled costs, and good performance in a variety of businesses and programs.” Lawrence said he expects a solid second-half performance, despite headwinds in global defense markets and a slower-than-anticipated recovery of the European economy. He said the company “…adjusted full-year guidance to reflect these headwinds, but we’re still expecting a strong finish to the year, especially in the fourth quarter,” adding that a number of positive trends should be contributing factors. These include “…a steadily growing commercial aerospace market, solid margin performance, and a stable $1.3 billion backlog.” He also emphasized the company’s continued “…record cash flow from operations should exceed $200 million this fiscal year.”

Key Stats (on next page)…

EPS increased 40% from $0.80 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $1.53 and has not changed. For the current year, the average estimate is a profit of $5.58, which is the same with that ninety days ago.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)