Montreal-based CAE Inc. (CAE) is a world leader in flight simulators with over 9,000 employees. It has customers in 190 countries and 90% of its revenue is derived from international activities and exports, notes Gordon Pape, editor of Internet Wealth Builder.
CAE has 160 sites and training locations in 35 countries, representing the world's largest installed base of flight simulators. Each year, the company trains more than 220,000 civil and defense crew members and thousands of healthcare professionals.
The company's revenue and earnings were down in the third quarter of fiscal 2019, but the stock kept moving higher. Revenue was $816.3 million, compared with $828.2 million in the third quarter last year.
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Net income attributable to equity holders was $77.6 million ($0.29 per share) compared to $143.8 million ($0.53 per share) last year.
Excluding the income tax recovery related to the U.S. tax reform and net gain on the fair valuation of CAE's prior investment in the Asian Aviation Centre of Excellence, net income would have been $102.7 million ($0.38 per share) last year.
On the positive side, free cash flow was $155.1 million vs. $146 million in prior year. Order intake for the quarter was $882.1 million for a record $9 billion backlog.
Earlier this month, the company announced it had completed the acquisition of Bombardier's Business Aircraft Training business for US$645 million. The deal expands CAE's ability to address the training market for customers operating Bombardier business jets, which consists of more than 4,800 aircraft.
The business includes a modern fleet of full-flight simulators and training devices covering the Bombardier Learjet, Challenger, and Global product lines, including the latest large cabin Global 5500, 6500, and 7500 business jets. CAE is a Buy.
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