Magellan Aerospace sees profits soar in Q4

(Photo: Magellan Aerospace)

TORONTO -- Magellan Aerospace Corp. is reporting an almost 33 per cent increase in fourth-quarter earnings, citing improved business from commercial airplane manufacturers among the reasons.

The Mississauga, Ont.,-based supplier of components for the aerospace and power generation industries says net income in the three months ended Dec. 31 totalled $22.1 million or 38 cents per diluted share, up from $16.6 million or 31 cents in the same 2011 period.

Revenues rose to $186.6 million from $173.3 million.

For the full year, the company earned $58.3 million or $1 per share on revenue of $704.6 million. That was up from $27.4 million or 73 cents per share on revenue of $691.4 million in 2011.

Revenue from the aerospace business rose 8.1 per cent in 2012 to $659.3 million from $609.9 million, offsetting a 44.4 per cent decline in its much smaller power generation segment to $45.3 million from $81.5 million.

"With 70 per cent of 2012 revenues coming from the commercial aircraft market, Magellan continues to be well positioned to take advantage of the current up cycle in this market segment," the company said.

"The year 2012 benefited from increased single- and twin-aisle production rates at Boeing and Airbus," it said, adding that long-term agreements secured during the year with both airplane builders would "serve to further augment the corporation's strong positioning in this sector for the next decade."

While the defence market as a whole is contracting, Magellan said it was pleased the Joint Strike Fighter program achieved a number of key milestones in 2012, with Lockheed Martin delivering 30 aircraft in 2012 compared with 13 aircraft in 2011.

Magellan said the potential effects of U.S. budget cuts on the JSF program are unknown, but are expected to be minimal in the near term.

Nevertheless, the company is anticipating moderating growth in JSF revenues over the next few years.