OTTAWA (Reuters) - Third-quarter earnings at CAE Inc CAE.TO rose 33 percent on strong demand from civil and military markets, the Canadian flight simulator maker said on Thursday,.
CAE said it earned $39.5 million, or 16 cents a share, up from $29.7 million, or 12 cents a share, in the year-prior period.
That beat analysts’ mean estimate for a profit of 15 cents a share, according to Reuters Estimates.
The company also said it is likely to “slightly exceed” its full-year forecast for the sale of 34 full flight simulators. It has announced 31 sales so far this year.
“The exact number of sales we conclude this year will ultimately depend on the timing and number of contracts,” the company said in a statement.
Desjardins Securities analyst Benoit Poirier expects CAE to announce 36 deals in the fiscal year.
“The obituary on the aerospace cycle appears to have been premature,” said Dundee analyst Richard Stoneman in a note.
Earnings from continuing operations, excluding interest and income tax, increased nearly 40 percent to C$61.7 million, or 17.9 percent of revenue, from $44.2 million, or 13.3 percent of revenue.
“We were impressed by the ongoing margin strength in the civil simulator side, where margins of 24.3 percent were achieved,” Stoneman wrote. “With this sector now the largest revenue segment, margins here can shift overall margins higher.”
Revenue for the period ended December 31 rose 4 percent to $34.8 million.
The consolidated backlog at quarter’s end was $2.7 billion compared with $2.5 billion at the end of the second quarter.
Simulator sales for the civilian market rose 12 percent to $103.5 million, with a 24.3 percent margin. Training and services revenue for the sector also rose 12 percent, to $92.8 million, with a 16.7 percent operating margin.
Simulator sales for the military market fell 15 percent to $89.6 million on a stronger Canadian dollar and softer European sales, with a 12.8 percent operating margin. Training and services sales for that segment grew 16 percent to $58.9 million, with a 16.1 percent operating margin.
Shares in the Montreal-based company were 3.7 percent higher at $12.55 on the Toronto Stock Exchange.
Reporting by Susan Taylor; Editing by Rob Wilson