Albany International’s revenue rises 12%
Despite ongoing Boeing MAX-related slowdown, defense-related sales boost third-quarter numbers
Albany International Corp.’s revenue went up by 12 percent, in the third quarter, despite a Boeing backlog and supply chain issues. Profits would have risen too, if not for a one-time pension settlement that cost the company nearly $50 million, The Rochester-based company reported.
All told, Albany reported revenue of $261 million for the quarter ending Sept. 30, with a profit of about $10.8 million –
just under a third of the amount it earned in the same quarter last year. For stockholders, that means a 34-cents-a-share profit.
Beginning 2018, Albany stepped up its defense contracting to find another market for its LEAP engine parts after Boeing was forced to ground its 737 MAX airliner following a recurring software failure that caused the deaths of 346 in two separate crashes.
“I wish we were delivering again,” said CEO Bill Higgins. “Basically our production is still idle. said CEO Bill Higgins in a conference call. “Until we get further word from Boeing, that’s where it’s going to sit.”
However, the company’s Engineer Components division now sells half its wares to defense firms, so the pivot paid off as revenues rose 42 percent.
It’s Machine Clothing division, used to make the equipment that produces paper among other things, went up a more modest 4 percent.
As for the profit decline, it was due to a $49.1 million one-time expense to essentially buy annuities for employees to replace a costly pension plan.
“We believe that it was the right action for both our shareholders and our active and prospective retirees,” said Chief Financial Officer Stephen Nolan.
Without that pension settlement and some currency issues, operating income would have actually increased by more than 20 percent for the quarter
Year-to-date, Albany has reported revenues of $766 million, an 11 percent increase, resulting in $78 million profits, or $2.41 cents a share, down by 41 cents.
The company also updated its guidance in a slightly positive direction. Revenue is now expected to range from $990 million to $1.015 billion, and earnings per share would be somewhere between $2.84 and $3.14.
Higgins blamed currency, delivery and inflation problems for the lackluster profit projections for the current quarter.
“Rising input costs have continued to rise, so we expect to see more impact in the fourth quarter,” Higgins said.