Third Quarter Conference Call -- Fiscal 2008

07 / 25 / 2008

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We're anticipating a substantial increase, $16 million, in our revenues for specialized test equipment. The biggest portion of that has to do with a number of projects in the automobile industry and particularly in Asia. We have discussions underway with a number of customers whose names you would recognize.

We're looking for a $12 million increase in sales in the power gen market. Much of that growth will come in Asia, primarily with customers building steam turbines and wind turbines. And, then we expect to add $46 million in revenue from the LTi acquisition.

In the simulator business, we're looking for a $9 million increase reflecting the continuing demand at CAE and some new business with customers like Mechtronix and Thales.

In metal-forming, we're looking for a $10 million sales increase to $62 million, largely the result of increased sales of hydraulic manifolds built in our Luxembourg company and the application of very high-power electric motors, a technology we recently acquired in Japan.

We're expecting $8 million worth of growth in controls for plastics machinery, mostly the result of hydraulic pump sales to customers who've recently embraced our product.

We're forecasting continued increases in sales of gauge controls for steel mills. This market continues to be driven by requirements in China. Recently, the Chinese have begun rebuilding outdated steel mills to upgrade their capacity.

Last, but by no means least, we're looking for an increase of 18% in our aftermarket revenue to a new level of $57 million.

Given the concern in many parts of the world about the onset of a global recession, it may seem a little unusual to be talking about a 23% increase in Industrial sales. However, our forecast is based on trends in a number of different product and market specialties. We have customers experiencing strong demand at the moment. We have new customers coming on stream for our current technology and new products and new technology to be delivered to our existing customer base and we have the impact of the LTi acquisition. So, we have a lot of confidence in our Industrial forecast.

In terms of margins, we have a budget put together which forecasts margins of 14.2%, very close to the 14.3% that we expect to experience in fiscal '08.

So, all-in-all, our Industrial picture for '09 is very bullish.

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