The Montreal-based company, best known for its civil aviation simulators, said its revenue soared 24 per cent year-over-year to $933.3 million in the three-month period that ended June 30. Despite the top line growth, CAE said its operating profit sank 54 per cent to $39.4 million. On an adjusted basis, it earned $0.06 per share; analysts, on average, were expecting $0.22 in per-share adjusted earnings.
In a release, CAE said its operating profit in the fiscal first quarter was hurt by $28.9 million in “unfavourable contract profit adjustments” relating to two U.S. programs in in its defence unit. By consequence, that unit swung to an operating loss in the quarter. The company said the adjustments stemmed from new cost assessments.
CAE also indicated there’s no immediate sign of an upturn for its defence business amid persistent supply chain and staffing challenges. Due to the problems in that division, CAE slashed its profit growth outlook for the year, saying it now expects mid-20 per cent growth in adjusted operating income; it previously forecast mid-30 per cent growth.
Marc Parent, the company’s president and chief executive, said in a release the revised outlook reflects “the more acute, sector-wide headwinds we are now experiencing, namely supply chain pressures, labour shortages, and a slower defence contracting environment.”
By contrast, operating profit from its civil aviation business jumped 28 per cent year over-year to $75.4 million. In its release, CAE highlighted long-term exclusive training agreements with United Airlines Holdings Inc., JetBlue Airways Corp. and another unidentified “major” airline in North America.
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