Astronics Corp. had a record-setting start to 2013 in more ways than one.
The East Aurora aircraft lighting and electronics manufacturer’s profits, sales and order bookings all set record highs during the first quarter, leading to a 41 percent surge in the company’s earnings.
“It doesn’t get a whole lot better to start off a new year,” said Peter J. Gundermann, Astronics’ president and chief executive officer, during a conference call Monday. “To me, those are the big three.”
The profits were much stronger than analysts were expecting, pushing Astronics’ stock up by 9.7 percent, or $2.81, to $31.59 Monday.
And while Astronics executives said they were narrowing their sales forecast for the year to between $280 million and $310 million, they said they now are optimistic that revenues this year will come in toward the higher end of that estimate. Astronics expects to update its forecast again after the end of the second quarter.
“I think we have more upside potential to push the upper level of that range or exceed it than we have downside risk,” Gundermann said.
Astronics’ profits jumped to $8.6 million, or 56 cents per share, from $6.1 million, or 40 cents per share, a year earlier as its overall profitability strengthened as its workload increased.
“Pumping that kind of volume through our cost structure does good things” for the company’s profitability, Gundermann said.
Astronics executives also believe the company’s military sales, which account for about 15 percent of the company’s total revenues, are not threatened by mandated federal budget cuts under sequestration.
“We believe we’re going to be pretty stable for a while,” Gundermann said. “We’re on generally high-priority programs or provide replacement parts that keep planes flying.”
The company’s sales swelled by 14 percent to $74 million from $61.1 million a year ago, buoyed by a 16 percent jump in sales of its aerospace products, especially cabin electronics and avionics equipment.
Astronics’ fast-growing cabin electronics business was especially strong during the quarter, with sales of equipment that allow airline passengers to plug electronic devices into their seats jumping by 15 percent to $40.4 million, or nearly 55 percent of the company’s total revenues.
Gundermann said he sees good growth potential for Astronics products to provide in-seat power systems for airline passengers. So far, most of the systems have been installed on bigger, wide-body aircraft used on longer flights. But Gundermann believes passengers, who carry an average of two electronic devices with them, are beginning to look for in-seat power on the narrow-body aircraft used on shorter flights.
“There are a lot of narrow body seats out there for us to address,” said Gundermann, who estimates that only 10 percent to 15 percent of seats on narrow-body aircraft have in-seat power, compared with about 50 percent on wide-body jets.
The company’s revenues from avionics products shot up by 71 percent to $5.3 million, while airfield lighting equipment revenues soared by 48 percent to $3.4 million. Aircraft lighting equipment sales rose by 7 percent to $18.1 million, while airframe power product revenues dipped by 4 percent to $4.4 million.
Astronics’ struggling test systems business in Florida continued to lose money, with its losses worsening to $1.5 million from $1.1 million a year ago, as revenues tumbled by 27 percent to $2.3 million from $3.1 million.
While Astronics executives previously had been reluctant to reduce the test systems staff so it would be able to retain the unit’s expertise in hopes that the business would eventually rebound, they reduced the business’ workforce by about 30 percent during the quarter, which is expected to save $1.5 million over the rest of this year and by $2 million in 2014.
The company booked $78.5 million in new orders during the quarter, leaving it with a record $119 million backlog of orders, up 4 percent from the end of last year and up 17 percent from a year ago.