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Alliant CEO Murphy stepping down
Armament sales grew by nearly one-third and pushed up profit by 18 percent for the quarter.
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Alliant Techsystems is on the hunt for a chief executive, and its new board chairman pledged Thursday that the aerospace and defense giant can make the innovative and affordable products the military and NASA will need in coming decades.
Retired Air Force Gen. Ron Fogleman said the company is well-positioned to meet the "growing demand for low-cost solutions" coming out of the Department of Defense.
Fogleman, 67, a five-year member of the board, stepped up to become chairman as the company announced Wednesday night that Chairman and CEO Dan Murphy will retire.
Murphy, 61, the company's longest-serving CEO with a tenure of more than six years, said in a statement that he was "leaving the company to address family matters that require my personal attention."
Chief Financial Officer John Shroyer, 46, will serve as interim CEO. Shroyer, a 23-year veteran of Alliant, told Wall Street analysts Thursday that the company was raising revenue and earnings projections slightly for fiscal 2010.
Full-year sales are now estimated to be $4.825 billion to $4.875 billion, a $25 million bump from a previous projection. Earnings per share should be $8.60 to $8.75, up 15 cents over earlier guidance.
Powered by 31 percent growth in armament sales, Alliant Techsystems boosted profit by 18 percent to $73 million for fiscal 2010 second quarter that ended Oct. 4. Sales rose 10.6 percent in the quarter to $1.2 billion.
Company stock closed Thursday at $86, up $2.77 or 3.33 percent.
Fogleman stressed stability during a Thursday conference call with analysts. "It's business as usual, the company won't skip a beat," said Fogleman, who also emphasized that the senior management team would remain in place.
One analyst asked whether a new top executive would be asked to execute a new business strategy. "We're pretty comfortable with where we're at going forward at this point," Fogleman said. But he said the company's leadership always looks at new business opportunities. If the company decided to pursue a new direction, he said, he would "want to make sure that the new CEO is part of that strategic planning process."
The company has retained a search firm to work on the CEO selection process, which will include internal and external candidates.
Several senior leaders within the company, including Shroyer, will be candidates for the permanent CEO job, said company spokesman Bryce Hallowell. He added that the new CEO likely will be selected early in the first quarter of 2010.
Armament sales in the fiscal 2010 second quarter jumped by nearly a third to $554 million, while space systems revenue fell 10 percent to $350 million. Mission systems, the third business line, rose 8.5 percent to $304 million. (That division includes making equipment for commercial and military aircraft.)
Space systems revenue declined partly because of a draw down of the Minuteman III missile program, and Shroyer said armament revenue included a boost from sales of products used in the Afghanistan conflict.
Since President Obama was elected, ammunition sales have increased. In a Thursday report, Rob Stallard, a Macquarie Securities analyst, wrote: "There is likely to be some nervousness about the sustainability of the 'Obama Bullet Bubble,' but the addition of the non-standard Afghan [weapons contracts] has the potential to be a sustainable and growing revenue stream."
Liz Fedor • 612-673-7709
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