Wings Magazine

CAE more than doubles Q1 profit

Aug. 8, 2013, Montreal - CAE slightly missed analyst profit expectations even though its net profit more than doubled to $45.6 million in the first quarter of its fiscal year on a 15 per cent growth in revenues primarily due to the strength of its civil simulator and flight training business.

August 8, 2013  By The Canadian Press

The Montreal-based company earned 18 cents per share attributable to
shareholders for the three months ended June 30. That compared to eight cents per share or $21.5 million a year earlier.

one-time tax benefits and severance costs, its adjusted profit was
$31.8 million or 15 cents per share, compared to $46.9 million or 18
cents per share in the prior year.

Revenues for the quarter were $530.4 million, up from $462.2 million last year

adjusted profits were expected to slip one cent to 17 cents per share
on $525.4 million of revenue, according to analysts polled by Thomson


Chief executive Marc Parent said the company maintained
its market leadership with strong full-flight civil simulator sales and
higher military orders than last year.

"In civil, despite
disappointing margin performance this quarter, 23 full-flight simulator
sales fiscal year to date give us a strong start and we expect to reach a
record of 40 units by March 31,'' he said in a statement.

Thursday, CAE announced a contract for eight simulators, flight training
devices and a 15-year maintenance and service agreement with an
undisclosed customer. The contract signed in CAE's second quarter is
worth about $210 million at list prices.

Revenue from its civil
segments increased 27 per cent to $301.8 million, but segment operating
incomes fell to $37.6 million from $46.9 million last year.

company also said it was chosen to train U.S. Air Force crews to operate
Predator and Reaper remotely piloted aircraft, commonly called drones.
The initial one-year services contract is for US$20 million and could be
worth up to US$100 million if extended to the maximum.

contract – originally announced by the U.S. Defence Department on July
30 – was one of several disclosed by the company ahead of its annual
meeting of shareholders and a conference call with analysts.

also said it has been awarded a contract worth an undisclosed amount to
provide three mission training simulators for the Royal Australian Air

It signed an agreement in June with Lockheed Martin, the
U.S. manufacturer of the F-35 fighter jet, to deliver training system
support and services in Canada even though the federal government has
yet to decide whether it's replacing the existing fleet of CF-18s.

During the first quarter, CAE's military revenues increased by one per cent to reach $198.8 million.

Parent said the orders demonstrate "our resiliency in a challenging defence budget environment.''

core markets for health and mining simulator products earned $1.6
million on $29.8 million of revenues, up from $700,000 on $26.1 million
of sales last year.

The company employs about 8,000 people at more than 100 sites and training locations in approximately 30 countries.


Stories continue below