CAE Q3 Profit Meets View, But Revenues Miss

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

"Our performance improved across the board in the third quarter with higher operating margins and a strong order intake. We have increased confidence for a strong second half with high-teens margins in Civil and continued resiliency in defence," President and CEO Marc Parent said.

The Montreal, Canada-based company reported net earnings of C$46.1 million or C$0.18 per share for the third quarter, higher than C$37.5 million or C$0.14 per share in the prior-year quarter.

On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of C$0.18 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter grew to C$513.6 million from C$500.9 million in the same quarter last year, but missed eleven Wall Street analysts' consensus estimate of C$533.16 million.

Revenue at the company's combined military segments increased 2 percent to C$201.8 million, and combined civil segments posted a 3 percent growth in revenue to C$282.1 million from last year. Revenues from new core markets of mining and healthcare were up to C$29.7 million from C$28.7 million last year.

Total operating profit for the quarter increased to C$77.6 million from C$59.8 million in the prior-year quarter, and operating margin improved 320 basis points to 15.1 percent. Combined civil segment operating margin dropped 90 basis points, while combined military expanded 260 basis points.

Backlog at the end of the third quarter was C$4.11 billion, up from C$3.46 billion a year ago.

CAE said it will pay a quarterly dividend of C$0.06 on March 31 to shareholders of record at the close of business on March 14, 2014.

"Our operational discipline is driving positive results, and with a clearer outlook for defence, and a robust commercial aerospace market, we are positioned for continued growth," Parent added.

CAE closed Monday's regular trading session at $12.58, down $0.03 on a volume of 17,000 shares. On the Toronto stock exchange, CAE.TO closed at C$13.90, down C$0.10 on a volume of 0.80 million shares.