GenCorp CEO optimistic despite uncertainties
GenCorp Inc. (NYSE: GY) CEO Terry Hall said the company is faced with uncertainties, but continues to make progress.
The defense appropriation bill, which has yet to be passed by Congress, continues to be an uncertainty for the maker of aerospace and defense products, Hall said during a midday conference call. Also, NASA’s Constellation program, which includes Moon, Mars and other projects, is being restructured. Aerojet, a GenCorp subsidiary, makes missile and space propulsion engines for NASA.
Hall said he expects continued improvement not only in Aerojet’s business, but also GenCorp’s real estate segment, which generated $2.8 million during the first nine months of 2007, compared with $2.1 million for the same period of 2006. The company expects job and population growth to propel real estate demand over the next two to three years, Hall said.
During the three months ended Aug. 31, the Rancho Cordova, Calif.-based firm earned $15.6 million, or $0.24 a share, above Wall Street estimates of $0.06 per share and compared with a loss of $13.1 million, or $0.24 per share, a year earlier. The period included a $12.4 million tax benefit, compared with $1 million during the same quarter of 2006.
CFO Yasmin Seyal said the firm does not expect anymore substantial tax benefits in fiscal 2008.
Third-quarter revenue increased 25% to $198.5 million, above analyst expectations of $181.8 million and compared with $158.3 million in the year-ago period. Sales in GenCorp’s aerospace and defense segments climbed 26% to $197.1 million from $156.6 million.
“Our strategy of focusing on the in-space propulsion, the missile defense programs and the other programs has driven the success, along with all the good work of the management,” Hall said.
In midday trading, GY shares are up 7.69%, or $0.87, at $12.18. Over the last 52 weeks, shares have ranged from $10.55 to $15.25.
