Canada's CAE Q2 revenue misses estimates; FY adjusted EPS outlook raised
CAE•CAE's fiscal Q2 revenue fell 2.6% to C$1.20 billion, missing the C$1.24 billion estimate, while adjusted EPS rose 17.9% to C$0.33 and beat estimates. The company raised its fiscal 2027 adjusted EPS outlook to C$1.28-C$1.35 and its adjusted segment operating income margin forecast to 14.9%-15.4%.
1. Quarterly results
CAE reported fiscal Q2 revenue of C$1.20 billion, down 2.6% and below the C$1.24 billion analyst estimate. Adjusted EPS increased 17.9% to C$0.33, above the C$0.26 estimate; EPS was C$0.18.
2. Fiscal 2027 outlook
CAE raised its adjusted EPS outlook to C$1.28-C$1.35 from C$1.21-C$1.28 and increased its forecast for adjusted segment operating income margin to 14.9%-15.4%. It continues to expect revenue to grow at a low-single-digit percentage rate.
3. Segment drivers
Lower simulator sales and higher selling, general and administrative expenses reduced adjusted operating income in Civil, partly offset by higher business training utilization. Defense adjusted operating income benefited from higher profitability on product deliveries, improved North American contract performance and recognition of investment tax credits. Free cash flow rose mainly because of lower capital expenditures.
