Cae Inc (NYSE: CAE) stock soars on positive outlook

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Cae Inc (NYSE: CAE) stock rose over 4.8% on May 25th, 2018 (As of 1:42 PM GMT-4; Source: Google finance) post a decent full year and fourth quarter of 2018 performance.

The group enhanced their earnings per share by 8% while raised return on capital to 12.3% on higher training demand and the deployment of accretive growth capital. In Civil segment operating income rose 12% and booked a record $2.3 billion in orders, while in Defence, operating income surged 6% and booked a record $1.4 billion in orders. The group delivered growth in healthcare segment during the quarter driven by the launch of innovative products and a  broader market reach.

Civil revenue rose 9% yoy to $455.2 million during fourth quarter of 2018 while operating income reached $95.7 million (21.0% of revenue), up 14% against fourth quarter last year. Annual Civil revenue rose 5% yoy to $1,629.7 million, against last year. Segment operating income reached $324.5 million (19.9% of revenue). Defence booked orders were $434.5 million driven by Notable wins include a training systems integration contract for a comprehensive NH90 helicopter training solution for the Qatar Emiri Air Force, and a comprehensive S-70B Seahawk helicopter training system for the Brazilian Navy as part of a U.S. foreign military sale program

Healthcare revenue rose to $35.1 million during the quarter from $34.2 million in pcp while fourth quarter segment operating income was $6.7 million (19.1% of revenue), against $4.1 million (12.0% of revenue) in the fourth quarter last year. Annual Healthcare revenue was $115.2 million compared to $110.7 million last year, and annual segment operating income was $8.8 million (7.6% of revenue), compared to $6.6 million (6.0% of revenue) last year.

For 2019, CAE’s core markets would benefit from secular growth while the group forecasts underlying market growth to exceed in fiscal year 2019. In Civil, CAE expects to maintain its leadership position in FFS sales. For Defence, they forecast mid to high single-digit percentage operating income growth as it delivers from backlog and continues to win opportunities from a large pipeline. They see Healthcare to resume double-digit growth this year with their broader market reach, expanded offering, and the ongoing launch of innovative products.

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