(Montreal) After experiencing operational challenges due to supply chain and COVID-19 related absences, CAE reassured investors with better than expected results. The stock ended Thursday’s session up 18%.
Updated yesterday at 4:24 p.m.
The Montreal-based pilot training and flight simulator specialist “still faces challenges” caused by labor shortages and supply chain disruptions, but its president and CEO, Marc Parent hopes the situation will improve in the fourth quarter of its fiscal year, which ends at the end of March.
“In the coming months, we are able to assess how our labor needs will be met, so we have good visibility,” said CAE’s big boss, during a conference call to discuss the results. . It’s the same for parts. When we look six months ahead, we are able to predict that we will be able to carry out our programs, because we will have the labor and the parts. »
CAE reiterated that it believes it can grow earnings per share at an annual rate of 25% over three years. Mr. Parent expects the recovery of civil aviation to continue. He also believes that the defense sector is in a phase of structural growth as Western armies try to modernize their equipment.
Benoit Poirier, of Desjardins Capital Markets, is reassured by the absence of bad news for the period including the months of July, August and September. Last August, CAE recorded a $28.9 million charge related to two separate military programs in the United States.
“Overall, we are pleased with the results considering that the market was anticipating more difficulties with supply chain and other burdens in the defense sector. »
Despite the headwinds, Parent said the results came as no surprise to management. “The results are what we expected. »
On inflation, the executive confirmed that the company and industry representatives are lobbying the U.S. government to seek compensation for inflation-related cost increases for contracts in the defense sector. “I believe we will have some form of compensation, but I can’t tell you when that will happen. »
Results above expectations
CAE tripled its net income, which rose from 14 million to 44.5 million. Adjusted diluted earnings per share were 19 cents, down from 17 cents.
Revenues, for their part, increased by 22% to 993.2 million, compared to 814.9 million.
Prior to the earnings release, analysts on average had expected diluted adjusted earnings per share of 17 cents, according to financial data firm Refinitiv.
CAE said its adjusted backlog hit a record $10.6 billion. The order-to-sales ratio, for its part, stands at 1.30, which means that the order book is filling up.
The stock gained $4.38, or 18.21%, to $28.43 on the Toronto Stock Exchange on Thursday.