Esterline Reports 3Q Earnings of $20.5 Million, or $.68 per Share, on $382.1 Million Sales

BELLEVUE, WA--(Marketwire - August 28, 2008) - Esterline Corporation, (NYSE: ESL) (www.esterline.com), a leading specialty manufacturer serving aerospace/defense markets, today reported fiscal 2008 third quarter (ended August 1) net earnings of $20.5 million, or $.68 per diluted share. Year-ago net earnings were $38.8 million, or $1.49 per diluted share, including $23.0 million after tax, or $.88 per diluted share, from an insurance recovery. Sales in the third quarter of 2008 were $382.1 million compared with $326.4 million a year ago.

Previously, the company estimated third quarter earnings would be $.55 to $.60 per share, reflecting postponed research and development assistance discussions with the Canadian government.

Robert W. Cremin, Esterline CEO, said, "...third quarter results were stronger than we expected, principally due to strong performance from our European operations during the month of July." Cremin also said that sales of spare parts and other aftermarket activity remained robust in both commercial aerospace and defense markets.

Cremin advised that the company was increasing its full-year (ended October 31) earnings guidance range to $3.50 to $3.60 per share, up from the previous guidance range of $3.45 to $3.55. Regarding the discussions in Canada, Cremin said, "...although we are optimistic, we have excluded any results of those talks from our full-year earnings estimate." Formal talks are expected to resume in September.

Overall research, development and engineering (R&D) expense in the third quarter was $22.4 million, or 5.9% of sales. Cremin noted that R&D spending as a percent of sales was down in the quarter "...from the 7% peak level in the prior quarter, reflecting Esterline's residual efforts on several major development programs, including the Boeing 787 and Airbus A400M."

He said that Esterline's R&D will "...trend down somewhat on a percent of sales basis as we move forward." He emphasized that "...investment in new product development remains essential to our delivering the value our customers have come to expect."

Backlog at the end of the third quarter was $1.06 billion compared with $977.9 million at the end of the prior-year period. Orders in the quarter increased to $380.4 million from $349.8 million a year ago.

Year-to-date net earnings were $76.7 million, or $2.56 per diluted share. For the first nine months of fiscal 2007, comparable earnings were $71.4 million, or $2.74 per diluted share, including $26.1 million after tax, or $1.00 per share, from an insurance recovery. Sales for the first nine months of 2008 were $1.13 billion compared with $895.9 million a year ago. The effective tax rate in the first nine months reflects $5.9 million in discrete tax benefits.

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "should" or "will," or the negative of such terms, or other comparable terminology. These forward-looking statements are only predictions based on the current intent and expectations of the management of Esterline, are not guarantees of future performance or actions, and involve risks and uncertainties that are difficult to predict and may cause Esterline's or its industry's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Esterline's actual results and the timing and outcome of events may differ materially from those expressed in or implied by the forward-looking statements due to risks detailed in Esterline's public filings with the Securities and Exchange Commission including its most recent Annual Report on Form 10-K.

EDITOR: See attached Consolidated Statement of Operations and Consolidated Balance Sheet

ESTERLINE TECHNOLOGIES CORPORATION
Consolidated Statement of Operations (unaudited)
In thousands, except per share amounts

                              Three months ended      Nine months ended
                               Aug 1,     Jul 27,      Aug 1,     Jul 27,
                               2008        2007        2008        2007
                             ---------   ---------   ---------   ---------
Segment Sales
        Avionics & Controls  $ 147,925   $ 123,410   $ 438,008   $ 310,379
        Sensors & Systems      121,927      95,520     343,825     276,684
        Advanced Materials     112,218     107,446     346,621     308,837
                             ---------   ---------   ---------   ---------

Net Sales                      382,070     326,376   1,128,454     895,900

Cost of Sales                  262,668     226,734     762,421     622,827
                             ---------   ---------   ---------   ---------
                               119,402      99,642     366,033     273,073
Expenses
        Selling, general
         and administrative     63,183      55,461     184,804     148,237
        Research, development
         and engineering        22,396      16,952      71,328      49,585
                             ---------   ---------   ---------   ---------
        Total Expenses          85,579      72,413     256,132     197,822

Other
        Other expense               --           7          86          24
        Insurance recovery          --     (32,857)         --     (37,314)
                             ---------   ---------   ---------   ---------
        Total Other                 --     (32,850)         86     (37,290)
                             ---------   ---------   ---------   ---------

Operating Earnings              33,823      60,079     109,815     112,541

        Interest income         (1,125)       (821)     (3,512)     (2,110)
        Interest expense         7,339      10,790      22,517      25,042
        Gain on derivative
         financial instrument       --          --      (1,850)         --
                             ---------   ---------   ---------   ---------

Other Expense, Net               6,214       9,969      17,155      22,932
                             ---------   ---------   ---------   ---------

Income Before Income Taxes      27,609      50,110      92,660      89,609
Income Tax Expense               7,091      11,217      15,780      18,096
                             ---------   ---------   ---------   ---------
Income Before Minority
 Interest                       20,518      38,893      76,880      71,513
Minority Interest                  (36)        (58)       (229)       (117)
                             ---------   ---------   ---------   ---------
Net Earnings                 $  20,482   $  38,835   $  76,651   $  71,396
                             =========   =========   =========   =========


Earnings Per Share:
        Basic                $     .69   $    1.51   $    2.60   $    2.79
        Diluted              $     .68   $    1.49   $    2.56   $    2.74


Weighted Average Number
 of Shares Outstanding-Basic    29,575      25,691      29,466      25,604

Weighted Average Number
 of Shares Outstanding-Diluted  29,994      26,139      29,894      26,022




Consolidated Balance Sheet (unaudited)
In thousands                                     Aug 1,           July 27,
                                                  2008              2007
                                              ------------     ------------
Assets
Current Assets
        Cash and cash equivalents             $    162,552     $     83,682
        Accounts receivable, net                   249,083          223,157
        Inventories                                298,461          251,612
        Income tax refundable                        6,495           15,601
        Deferred income tax benefits                31,907           36,893
        Prepaid expenses                            15,774           14,056
                                              ------------     ------------
                Total Current Assets               764,272          625,001

Property, Plant and Equipment, Net                 215,909          214,550

Other Non-Current Assets
        Goodwill                                   651,381          604,230
        Intangibles, net                           339,146          371,080
        Debt issuance costs, net                     7,957           10,691
        Deferred income tax benefits                46,041           16,547
        Other assets                                25,715           31,372
                                              ------------     ------------
                                              $  2,050,421     $  1,873,471
                                              ============     ============

Liabilities and Shareholders' Equity
Current Liabilities
        Accounts payable                      $     88,763     $     83,468
        Accrued liabilities                        181,583          164,571
        Credit facilities                            8,550           28,622
        Current maturities of long-term debt         8,649           10,245
        Federal and foreign income taxes            14,173            7,973
                                              ------------     ------------
                Total Current Liabilities          301,718          294,879

Long-Term Liabilities
        Long-term debt, net of current
         maturities                                390,221          555,385
        Deferred income taxes                      118,307          120,991
        Other liabilities                           54,051           42,956

Commitments and Contingencies                           --               --
Minority Interest                                    2,643            2,932

Shareholders' Equity                             1,183,481          856,328
                                              ------------     ------------
                                              $  2,050,421     $  1,873,471
                                              ============     ============

Contact Information: Contact: Brian Keogh 425/453-9400