GR Goodrich Corp. (The)

Goodrich Corporation (GR) planned to shut down its Marble Avenue landing gear facility in Cleveland, Ohio by the end of 2012. The company decided to close the factory due to a decrease in number of programs and lack of appropriate labor to fill the capacity that is cost-effective.

Goodrich supplies a wide range of landing gear equipment to commercial and military customers with the help of approximately 400 employees. The activities currently performed at Marble Avenue will be gradually transferred to other landing gear facilities.

Due to the closure of the facility, Goodrich is expected to incur pre-tax charges of approximately $39.0 million of which 40% are non-cash. Moreover, charges of approximately $16 million or 8 cents per diluted share are expected to be recorded in the second quarter of 2011 and approximately $5 million or 3 cents per diluted share in the second half of 2011. The company expects charges of approximately $15 million or 7 cents in 2012.

The company will update its 2011 outlook and other business-related revisions with its second-quarter results that are expected to be released on July 28, 2011.

Going forward, our bullish outlook on the company is supported by its geographically-diverse customer mix, its diverse presence in both commercial and business jets, its resurgence in commercial aftermarket sales, a strong balance sheet, an incremental dividend and an ongoing share repurchase program.

This is, however, offset by uncertainty in the recovery of the large commercial airplane original equipment market, along with possible defense cutbacks, dependence on international sales, high research and development overheads and regulatory risks. The company presently retains a short-term Zacks #2 Rank (Buy). We have a long-term Neutral recommendation on the stock. In the near term, the company’s peers Astronics Corp. (ATRO) holds a Zacks #1 Rank (Strong Buy rating).

Goodrich Corporation is a global supplier of systems and services to aerospace, defense and homeland security markets.  With one of the most strategically diversified portfolios of products in the industry, Goodrich serves a global customer base with significant worldwide manufacturing and service facilities.

 
ASTRONICS CORP (ATRO): Free Stock Analysis Report
 
GOODRICH CORP (GR): Free Stock Analysis Report
 
Zacks Investment Research