Moog Inc. Reports Record Sales and Positive Outlook

Moog Inc. (($MOG.A)) has held its Q4 earnings call. Read on for the main highlights of the call.

Moog Inc. recently held its earnings call, revealing a robust quarter marked by record sales and performance. The sentiment was overwhelmingly positive, driven by significant growth in the Aerospace and Defense sectors. The company also received notable industry recognition and expressed a promising outlook for fiscal year 2026. However, challenges persist, particularly concerning tariff impacts on Commercial Aircraft margins and efforts to enhance cash flow conversion.

Record Financial Performance

Moog Inc. achieved unprecedented results in Q4 2025, with sales exceeding $1 billion for the first time and a 12-month backlog reaching $3 billion. The company reported its highest quarterly adjusted operating margin and earnings per share (EPS), alongside a marked improvement in free cash flow.

Strong Growth in Aerospace and Defense

The Aerospace and Defense sectors were standout performers, with Commercial Aircraft sales soaring by 27% and Space and Defense sales increasing by 17%. Military Aircraft sales also rose by 10%, fueled by new production programs and pricing enhancements.

Expansion in Defense Markets

Moog is capitalizing on strong demand in the Defense sector, with opportunities spanning the U.S., Europe, and Australia. The company secured several significant contracts, including a major win in missile production in Australia.

Operational Excellence Recognized

The company’s operational prowess was acknowledged with the Crystal Excellence Award from CAE and a supplier award from Lockheed Martin, highlighting Moog’s outstanding performance and on-time delivery.

Positive FY ’26 Outlook

Looking ahead, Moog projects a 9% increase in sales to $4.2 billion for FY ’26, with a 15% rise in EPS and a 40 basis point increase in adjusted operating margin.

Tariff Impact on Commercial Aircraft Margins

The Commercial Aircraft segment faced significant margin pressure due to tariffs, resulting in a 440 basis point decrease in operating margin in Q4 2025.

Accounting Error Correction

Moog revised its previously reported results due to an accounting error related to Commercial Aircraft aftermarket contracts, which impacted net earnings per share in past fiscal years.

Challenges in Cash Flow Conversion

Despite improvements, Moog’s free cash flow conversion remains below target, projected at 60% for FY ’26, influenced by working capital needs and capital expenditures.

Guidance for FY ’26

Moog Inc. provided strong guidance for FY 2026, anticipating a 9% increase in sales to $4.2 billion. The company expects a 70 basis point improvement in adjusted operating margin, excluding tariffs, and a 15% rise in adjusted EPS. Key growth areas include a 15% sales increase in Commercial Aircraft and an 11% rise in Space and Defense sales. Moog plans to manage working capital effectively and maintain its focus on operational excellence to meet these targets, despite challenges like tariffs and complex supply chains.

In summary, Moog Inc.’s earnings call highlighted a quarter of record achievements and a positive outlook for the future. The company’s strong performance in Aerospace and Defense, coupled with strategic expansions and industry accolades, positions it well for continued growth. However, challenges such as tariff impacts and cash flow conversion remain areas to watch. Investors and stakeholders can look forward to Moog’s proactive approach in navigating these challenges and capitalizing on growth opportunities.