CAE posts 18 per cent raise in Q3 profits
Feb. 9, 2012, Montreal - Flight training firm CAE Inc. saw profits grow by 18 per cent in its latest quarter as strong demand for civil aerospace training and simulators offset weaker military results than a year ago.
February 9, 2012 By The Canadian Press
The Montreal-based company said it earned $45.6 million, or 18 cents per share in its third quarter, up from $38.5 million, or 15 cents per share in the same period of 2010. Adjusting for one-time items, profits were 17 cents per share.
Revenue grew 10 per cent to $453.1 million.
CAE was expected to earn 17 cents per share in adjusted profits on $468 million of revenues in the third quarter, according to analysts polled by Thomson Reuters.
Chief executive Marc Parent said he was pleased that margins increased in both civil and defence business units from the second quarter.
"The level of civil aviation market activity remains high in all regions and our order intake reflects our strong competitive position,'' he said in a news release.
"Although procurement delays in defence continue to make predicting the timing of orders a challenge, we won contracts with key defence customers during the quarter.''
In its civil segment, revenue grew by 13 per cent to $203.7 million compared to $179.9 million last year. Operating profit was $42 million, compared to $32.1 million last year.
CAE said it sold 11 full-flight simulators during the quarter and also signed training services contracts expected to
generate $122.2 million in future revenue, including an exclusive long term agreement with Flydubai in the United Arab Emirates.
In its military segments, revenue increased by one per cent to $222.3 million, compared to $219.8 million last year. Operating profit was $36.9 million, down slightly from $39.5 million last year.
The Montreal-based company has suggested that its military segment revenues will grow by low single digits this fiscal year.
Benoit Poirier of Desjardins Capital Markets said the military margins were higher than forecast and should provide some relief to investors.
"Our sense is that there was some uncertainty about military margins going into the quarter,'' he wrote in a report.
CAE has a solid military backlog with a good pipeline of international opportunities but the numbers were down from the prior quarter.
"Delays in government funding for certain programs remain a concern,'' added Michael Willemse of CIBC World Markets.
With the $100 million in orders announced in mid-January, CAE has generated about $440 million in new military order activity since the beginning of the fiscal year.
CAE's health-care simulation segment remains small, but is expected to take advantage of attractive growth opportunities.
Segment revenues increased to $27.1 million from $11.1, but the loss increased by $100,000 to $1.4 million.
Founded in 1947, it has 32 civil aviation, military and helicopter training centres around the world and trains more than 80,000 crew members.
The company had annual revenues last year exceeding $1.6 billion and employs more than 7,500 people at more than 100 sites and training locations in more than 20 countries.
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