Aerospace Company Earnings Flying High
February 27 2019 - Hot Aerospace Supplier Heico Lifts Guidance After Earnings Beat By Investors Business Daily
Aerospace parts supplier Heico (HEIA) topped fiscal first-quarter earnings and revenue forecasts late Tuesday and boosted its outlook. Heico stock rose, still in range from a recent breakout.
Estimates: Analysts see Heico earnings rising 4.4% to 47 cents per share with revenue up 11.7% to $451.9 million.
Results: Heico earnings came in at 58 cents a share. Excluding 9 cents a share in tax benefits, EPS was 49 cents. Revenue rose 15% to $466.1 million.
Flight support unit sales rose 13% to $287.2 million on increased demand for new products in the aftermarket replacement parts line. Heico's electronic technologies group sales rose 18% to $184.4 million on 12% organic growth of defense, aerospace and space products.
Overall operating margin improved to 21.0% from 19.7% a year ago.
Outlook: Heico now sees fiscal 2019 net income growth of 11%-13%, up from a prior view of 10% growth. It also sees sales growth of 9%-11%, up from a prior view of 8%-10%.
Heico sees its flight support group's full year sales growing 7%-9%, up from an earlier estimate of 7% to 8%.
"As we look ahead to the remainder of fiscal 2019, we anticipate continued net sales growth within the Flight Support Group's commercial aviation and defense product lines," said Chairman and CEO Laurans Mendelson. "We also anticipate growth within the Electronic Technologies Group, principally driven by demand for the majority of our products."
Shares closed up 0.6% at 80.25 on the stock market today. Heico stock broke out of a six-month-long cup base on Friday with a 78.55 buy point. Volume was below average on the breakout, which is not a great sign.
The aerospace and electronics company builds components for commercial and military customers including Boeing (BA), Airbus (EADSY) and Lockheed Martin (LMT) and for the industrial and computer industries.
Heico stock has a 98 Composite Rating and is ranked second in IBD's Aerospace/Defense industry group. The industry group is rated No. 9 out of IBD's 197 industries.
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