CAE shares surge to all time high after posting strong cap to a great year

CAE Inc. shares hit an all-time high Friday after the flight training and simulator company beat expectations as it reported a 49% boost in fourth-quarter profits and big increase in revenues compared with a year ago.

The Montreal-based company’s stock closed up $4.67 or 14.6% to $36.67 in trading on the Toronto Stock Exchange.

The gain came after CAE said it earned $122.3 million attributable to shareholders or 46 cents per share for the quarter ended March 31, compared with a profit of $82.3 million or 31 cents per share a year ago.

Revenue totalled $1.02 billion, up 42% from $720.9 million.

The increase came as civil aviation training revenue totalled $593.4 million, up from $395.5 million a year ago, while defence and security revenue climbed to $387.9 million from $290.5 million. Health care revenue rose to $40.7 million from $35.1 million.

Excluding specific items, CAE says it earned $127.5 million or 48 cents per share for the quarter, up from $82.3 million or 31 cents per share in the same quarter last year.

Analysts on average had expected a profit of 43 cents per share and $945.2 million in revenue, according to Thomson Reuters Eikon.

For the full year, the company’s net income attributable to shareholders fell to $330 million or $1.23 per share, compared with $346 million or $1.28 per share a year earlier.

Adjusted profits rose 13% to $335.2 million or $1.25 per share, up from $297.9 million or $1.11 per share in 2018.

Revenues were up 17% to $3.3 billion.

“For the year as a whole, CAE delivered a record performance, meeting our annual outlook, and further establishing itself as the worldwide leader in aviation training,” stated CEO Marc Parent.

The order backlog reached a record $9.5 billion and the company had 78 full-flight simulators for the year, above its initial expectations for about 70 and its previous record of 53 units.

Cameron Doerksen of National Bank Financial raised his target price for the company nearly 11% to $36 despite the company’s 2020 outlook which he described as “a bit light versus our forecast.”

“We believe CAE’s record backlog and recurring nature of much of its overall revenue provides excellent visibility for growth in the coming years,” he wrote in a report.