Strengthening sales of its cabin electronics systems to airlines helped Astronics Corp. boost its fourth-quarter profits by 9 percent, although its earnings and revenues both grew slower than analysts had expected.
The East Aurora aircraft lighting and electronics maker said Tuesday that strong demand for its cabin electronics systems, which let airline passengers plug in their laptops and other electronic devices into their seats, fueled its sales growth, along with a continued rebound in its business jet markets. Those gains helped offset an 8 percent drop in sales for military aircraft.
Astronics said its profits rose to $5.7 million, or 37 cents per share, from $5.2 million, or 34 cents per share, a year ago. The earnings fell two cents short of the 39 cents per share that analysts were expecting.
The company’s sales improved to $67.4 million from $61.2 million, with three-quarters of the increase coming from an avioinics business that Astronics acquired in November 2011. Overall, Astronics’ sales were weaker than the $70.8 million in revenues that analysts had forecast.
Astronics said it expects 2013’s sales to continue growing at about the same pace as the fourth quarter. The company said it expects its sales this year to be between $275 million and $310 million, up about 10 percent from $266 million last year at the midpoint of the forecast range.
The company said its aerospace sales, which account for nearly all of its revenues, are expected to rise by around 11 percent to between $265 million and $300 million, up from $254 million last year. Revenues from its test systems business in Florida, which has struggled mightily since Astronics acquired it, are expected to keep dropping, falling to $10 million, which would be 13 percent less than its $11.5 million during 2012 and 30 percent less than 2011.
“We expect the positive trends that supported us through 2012 to continue in 2013,” said Peter Gundermann, Astronics’ president and chief executive officer. “We believe that commercial airlines will continue the trend of providing electrical power to their customers.”
During the fourth quarter, operating profits from its aerospace business weakened by 11 percent to $10.8 million, despite an 11 percent increase in sales to $64.7 million, mainly because of a 17 percent increase in engineering and development expenses and higher warranty and inventory reserves.
The test systems business lost $1.5 million, compared with $3.4 million a year ago.
Astronics’ cabin electronics sales, which account for 55 percent of the company’s total revenues, grew by 13 percent during the quarter, while its airfield lighting equipment sales grew by 11 percent. Those gains offset an 11 percent decline in aircraft lighting revenues and a 14 percent drop in sales of airframe power products. The company’s new avionics products business generated $5 million in sales.