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Profits soar at Astronics Corp.
Aircraft electronics, lighting lead the way
Published:July 30, 2010, 12:00 AM
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Updated: July 30, 2010, 7:18 AM
Astronics Corp.’s second-quarter profits jumped by 24 percent as a solid growth in its cabin electronics business offset even further weakening at the East Aurora company’s test systems unit.
With rising sales at its aerospace products business making its operations more productive, Astronics was able to increase its profits even though the company’s overall sales were flat during the quarter.
While sales tumbled by 60 percent at the company’s troubled test systems business and are expected to remain depressed through the rest of the year, Astronics executives said Thursday that the renewed strength of its aerospace business allowed them to increase their sales forecast for this year by about 6 percent to about $190 million.
“Overall, we had a solid quarter,” said Peter Gundermann, Astronics’ president and chief executive officer.
All the company’s strength came from its aircraft lighting and cabin electronics business, which accounted for 93 percent of Astronics’ overall revenues during the quarter.
Operating profits at the aerospace business soared by 83 percent to $6.8 million as sales strengthened by 14 percent to $43.6 million, mainly because of stronger orders from commercial airlines.
With the economy improving, airlines stepped up their efforts to upgrade their aircraft by purchasing and installing in-flight entertainment and in-seat power systems. Revenues from the business jet market, which
plunged last year, improved by 18 percent from their 2009 level.
But Astronics continues to be dragged down by its test systems business, which was added in January 2009 when the company paid $50 million for DME Corp., a provider of military test, training and simulation equipment as well as commercial aviation safety equipment and airfield lighting systems.
That business, which had $51 million in sales last year, produced just $3.5 million in revenues during the second quarter, down from $8.8 million a year earlier. That caused operating losses at the test systems business to swell to nearly $1 million, compared with a loss of $250,000 a year ago.
Astronics executives aren’t expecting any improvement in the test systems business, either, reducing their sales forecast for the segment to $20 million to $25 million this year, half of last year’s level and less than the $25 million to $35 million they were expecting in May.
At the same time, Astronics officials are more upbeat about the prospects for their aerospace business, boosting their sales forecast for that segment by 11 percent to between $165 million and $170 million.
Overall, Astronics now expects sales this year of $185 million to $195 million, up from its earlier forecast this spring of $170 million to $190 million.
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