CAE Stock Flies High After Q4 Revenue Beat, Board Overhaul: Retail’s Unswayed

According to Koyfin data, the company’s quarterly revenue rose 12% year-over-year to C$1.22 billion compared to an analyst estimate of C$1.18 billion.

CAE Inc (CAE) stock jumped about 15% on Friday to hit the highest level in more than two-and-half years after the company reported upbeat fiscal third-quarter revenue and added the co-founder of activist investor Browning West to its board.

According to Koyfin data, the company’s quarterly revenue rose 12% year-over-year to C$1.22 billion compared to an analyst estimate of C$1.18 billion.

Its adjusted earnings of C$0.29 per share for the quarter ended Dec. 31 were in line with estimates.

CAE said third-quarter revenue in its civil aviation segment rose to $752.6 million, compared with $622.1 million in the year-ago quarter.

During the quarter, the unit delivered 20 full-flight simulators (FFSs), a 54% increase over last year.

However, third-quarter revenue from its defense segment fell to $470.8 million, compared with $472.4 million in the year-ago quarter.

“Aircraft original equipment manufacturer (OEM) supply issues have affected airline pilot hiring and training demand forecasts and remain a near-term headwind for a portion of CAE’s commercial training business,” the company stated.

CAE said that due to the delay in new aircraft deliveries, it expects annual adjusted segment operating income growth in the civil aviation unit to be modestly below its previous outlook of about 10%.

The company also raised its annual revenue growth forecast in its defense unit to high-single-digit percentage points compared with low to mid-single-digit percentage points projected earlier.

“Rising geopolitical tensions are driving a focus on near-peer threats, defense modernization, and readiness, fueling demand for the training and simulation solutions that CAE offers,” the company noted.

It also added Peter Lee, the co-founder of activist investor Browning LP, to its board. The investor had urged CAE to include it in the company’s CEO search process.

The firm also added three new members to its board and named a new chair.

Retail sentiment on Stocktwits remained in the ‘neutral’(50/100) territory, while retail chatter was ‘extremely low.’

Over the past year, CAE U.S. shares have gained 30.6%.

( 1 Canadian dollar = 0.71 U.S. dollars)

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