CAE Q2 Earnings Meet View, But Revenues Top

(RTTNews) - Canadian aviation-training and simulation products provider CAE, Inc. (CAE, CAE.TO) reported Wednesday a profit for the second quarter that grew from last year, reflecting improved margins and double-digit revenue growth. Earnings per share matched analysts' expectations, while quarterly revenues topped their estimates.

"Performance for the second quarter was in line with our outlook for growth in Civil and Healthcare, and for resiliency in Defence," President and CEO Marc Parent said in a statement.

The Montreal, Canada-based company reported net earnings of C$42.9 million or C$0.16 per share for the second quarter, higher than C$38.3 million or C$0.15 per share in the prior-year quarter.

On average, eight analysts polled by Thomson Reuters expected the company to report earnings of C$0.16 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter improved 11 percent to C$529.4 million from C$478.2 million in the same quarter last year, and topped seven Wall Street analysts' consensus estimate of C$508.90 million.

Revenue for civil simulation and training grew 10 percent to C$296.0 million from last year. During the quarter, the company signed solutions agreements with an expected value of C$297.5 million.

Revenue for defence and security also increased 9 percent to C$209.1 million, and revenue for healthcare was up 34 percent to C$24.3 million from the year-ago quarter.

"In Civil, we made important progress with our solutions strategy, with Japan Airlines agreeing to conduct all its pilot training at the upcoming CAE-JAL joint venture. In Defence, we received contract extensions and technology upgrades from our existing installed base and long-term services programs. And in Healthcare, we made good progress and continue to be encouraged by our prospects in this growing market," Parent added.

Total operating profit for the quarter increased to C$72.8 million from C$64.6 million in the prior-year quarter, and operating margin improved 30 basis points to 13.8 percent.

Civil simulation and training operating margins improved 80 basis points, and healthcare operating margins soared 520 basis points from last year. Meanwhile, operating margin for defense and security dropped 100 basis points.

Backlog at the end of the second quarter was C$4.81 billion, up from C$4.71 billion a year ago.

CAE's Board of Directors has today approved a quarterly dividend of C$0.07, payable on December 31, to shareholders of record at the close of business on December 15, 2014.

"For CAE overall, we are reiterating our expectations for a stronger performance in the second half and solid growth for the year as a whole," Parent added.

In Wednesday's regular trading session, CAE is currently trading at $12.59, down $0.18 or 1.41% on a volume of 100 shares.