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Heroux Devtex experiences 12% profit gain in Q4

May 25, 2012, Longueuil, Que. - Quebec-based aerospace manufacturer Heroux-Devtek says its fourth-quarter profit was $8.9 million, up 12 per cent from the same time last year and ahead of analyst estimates.


May 25, 2012
By The Canadian Press

The Montreal-area company's profit amounted to 29 cents per share, which was two cents above a consensus estimate compiled by Thomson Reuters.

The company, headquartered in Longueuil, Que.,specializes in the design, development, manufacture and repair and overhaul of related systems and components for the aerospace and industrial products segments.

It supplies the commercial and military aerospace sectors with landing gear systems and airframe structural components from 12 manufacturing facilities. Its industrial segment provides large components for power generation equipment.

Heroux-Devtek's revenue was $109 million in the fourth quarter, also ahead of analyst estimates. The company says its aerospace sales were stable but sales increased in the industrial division.

For the full 2012 financial year ended March 31, Heroux-Devtek had $380.3 million in revenue — up 6.4 per cent from last year. Net income for the year was $26.5 million or 86 cents per share on a diluted basis.

That's up from $357.6 million in revenue and $19.1 million of net income, or 63 cents per share in fiscal 2011.

"Fiscal 2012 was a very successful year for Heroux-Devtek,'' chief executive Gilles Labbe said in a statement.

"While the overall economy remained hesitant, the majority of our strategic markets, both in the Aerospace and Industrial segments, gained momentum. As a result, we generated record sales and net income.''

Heroux-Devtek's adjusted earnings were expected to increase by two cents per share to 27 cents on flat revenues of $106 million during the fourth quarter of its fiscal year, according to analysts polled by Thomson Reuters.

For the full year, it was expected to earn 82 cents per share on $382 million of revenues. That compared with 61 cents on $358 million in the previous year.

The company also said Friday that conditions in the commercial aerospace market is largely favourable. It said new orders remain solid and backlogs represent approximately seven years of production at current rates.

On the other hand, analysts have said they expect the company will likely be affected by the Pentagon plans to reduce joint strike fighter (F35) purchases by at least 40 per cent through fiscal year 2017.

The cuts are part of the U.S. government's proposal to trim US$500 billion in defence spending.

In the past, Heroux-Devtek has generated 59 per cent of its revenue from the defence market, with the F35 program accounting for an estimated 10 per cent of total revenue, or US$35 million per year.

About 70 per cent of its sales are outside Canada, mainly in the United States.