- CAE ( NYSE: CAE ) President and CEO said, "We had a mixed performance in Q 1, with Civil delivering results in line with our view for strong annual growth, while Defense came in well short of our expectations, as a result of discrete program charges and near-term headwinds in this early stage of its multi-year growth journey."
- Q1 revenue was up 24% while adjusted EPS was down to $0.06 from $0.19 in year ago quarter.
- For Q1, Civil revenue increased to $480.4M from $432.9M in year ago quarter; during the quarter Civil delivered ten full-flight simulators to customers and first quarter Civil training centre utilization was 71%.
- Defense revenue surged 43% to $413.3M; Defense backlog, including options and CAE's interest in joint ventures, at the end of the quarter was $5B and Defense pipeline remains strong with some $9B of bids and proposals pending customer decisions.
- Q1 healthcare revenue increased to $39.6M from $31.6M.
- Amidst a challenging global environment, the company nabbed $1B in total orders for a record $10B backlog and 1.12 times book-to-sales ratio.
- In Civil, the company booked $522M in orders for a 1.09 times book-to-sales ratio, including long-term training agreements with airlines and business aircraft operators, and 11 full-flight simulator sales.
- In Defense, it booked orders for training and mission support solutions valued at $488M for 1.18 times book-to-sales.
- Free cash flow was negative $182.4M for the quarter compared to negative $147.6M in the first quarter last year; net debt at the end of the quarter was $3,025.9M compared to $2,700.1M at the end of prior quarter.
- Outlook: The company is targeting a consolidated adjusted segment operating margin of ~17% by the time its markets are generally recovered, with steady room for further improvement thereafter.
- Defense is expected to continue making good progress with the integration of L3H MT acquisition in FY23 and to fully realize $35 to $45M of cost synergies by FY24.
- While the average SA Author Rating stands at Buy, recently SA PRO Editors indicated with a Buy rating that the stock is well-positioned for a post-COVID rebound with 80% upside ; also JP Research states that the stock is well-positioned for a post-COVID rebound .
- YTD, the stock has lost 14% and is currently trading close to its 52-week low levels.
- Of the 12 Wall Street Analysts covering the stock, 7 rate it a Buy while Quant rating stands at Hold.
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CAE sees a mixed Q1 with rising revenue and falling earnings with Defense segment performing lower