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What: Shares of aerospace and defense parts supplier Esterline Technologies
So what: For the quarter, Esterline recorded robust sales growth of 19% to $485.9 million and reported an adjusted-profit (with goodwill losses excluded) of $1.12, which squeaked by Wall Street's expectations by $0.01. The real giddy-up in Esterline's share price has to do with the company's fourth-quarter and full-year guidance, which came in ahead of the Street's forecasts. Esterline cited strength in its backlog and an abatement in third-quarter growth deterrents as the reasoning behind its fourth-quarter profit forecast of $1.60-$1.70 versus the consensus $1.59 estimate.
Now what: Although Esterline's management feels relatively confident that the company is set to benefit from the next aerospace cycle, my optimism is much more muted. I'll give Esterline a golf clap for beating expectations, but I'm concerned about defense and aerospace spending in general, with big government cuts looming. Even at 10.5 times forward earnings, I'd be leery about buying into Esterline's optimism. For now, I'm happy staying on the sidelines.
Craving more input? Start by adding Esterline Technologies to your free and personalized Watchlist so you can keep up on the latest news with the company.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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