CAE shares jump as quarterly results beat expectations on flight simulator demand
FILE PHOTO: An employee looks up at a CAE 7000 Series simulator at the CAE Inc. headquarters in Montreal, March 31, 2009. REUTERS/Christinne Muschi/File Photo
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(Reuters) -Shares of CAE (NYSE:CAE) Inc rose almost 20% on Thursday after the Canadian company posted quarterly revenue and profit above analyst estimates, as demand for flight simulators at its civil aviation and defense units surged.
In midday trading, shares of the world’s largest civil aviation training company were trading at C$28.34 on the Toronto Stock Exchange, amid a rise in broader markets on hopes that the Federal Reserve might scale down the size of its future interest rate hikes. They rose about 19% to $21.15 on the New York Stock Exchange.
Sales at CAE’s civil aviation unit, which serves airplane makers including Canada’s Bombardier (OTC:BDRBF) Inc, jumped 40% on strong demand from airplane makers and carriers, which ramped up their training spending in the quarter to capitalize on a rebound in travel demand.
«Our outlook for Civil (Aviation)remains highly positive, with its industry-leading positioning expected to enable us to grow significantly through the market recovery and beyond.» CAE Chief Executive Officer Marc Parent said.
Montreal-based CAE now expects to deliver 45 full flight simulators during its fiscal year, up from a previous forecast of 40.
«We are pleased with the results in the quarter given the market had priced in further supply chain issues,» Desjardins analyst Benoit Poirier said in a note.
CAE posted revenue of C$993.2 million ($743.64 million) for the second quarter of its 2023 fiscal year, which ended Sept. 30, ahead of Refinitiv IBES estimates of about C$949 million.
On an adjusted basis, it earned 19 Canadian cents per share, compared to analyst expectations of 17 cents.
($1 = 1.3356 Canadian dollars)
