HEICO (HEI) Q3 Earnings Miss Estimates, Sales Increase Y/Y
HEICO Corporation’s HEI third-quarter fiscal 2022 earnings per share (EPS) of 60 cents missed the Zacks Consensus Estimate of 65 cents by 7.7%. However, the bottom line improved by 7% from the prior-year period’s figure of 56 cents per share.
Total Sales
The company’s net sales increased by 21% year over year to $569.5 million in the reported quarter, primarily driven by the consistent rebound observed in demand for the company’s commercial aerospace products and services. Moreover, total sales beat the Zacks Consensus Estimate of $553 million by 2.9%.
Heico Corporation Price, Consensus and EPS Surprise
Heico Corporation price-consensus-eps-surprise-chart | Heico Corporation Quote
Operational Update
HEICO’s total costs and expenses increased by 18.9% year over year to $440.8 million in the quarter under review. The increase was due to the higher cost of sales and SG&A expenses.
Segmental Performance
Flight Support Group: Net sales surged 39% year over year to $330.3 million, driven by the enhanced demand for the majority of its commercial aerospace products and services.
The operating income soared 68% year over year to $70.8 million on the improved gross profit margin and efficiencies realized from the higher net sales volume. Further, its operating margin expanded by a massive 370 basis points (bps) to 21.4% compared with 17.7% in the prior-year period.
Electronic Technologies Group: The segment’s net sales increased 2% to $244.2 million in the quarter under review, primarily due to the increased demand for other electronics, space and medical products.
The segment’s operating income decreased by 1.4% year over year to $68 million, primarily on lower defense sales and a lower gross profit margin. The company’s operating margin contracted by 90 bps to 27.9%.
Financial Details
As of Jul 31, 2022, HEI’s cash and cash equivalents totaled $133.6 million compared with $108.3 million as of Oct 31, 2021.
Cash flow provided by operating activities was $323.9 million during the nine months ended Jul 31, 2022, reflecting a 3.1% decline from the prior-year period.
HEICO reported long-term debt (net of current maturities) of $244 million as of Jul 31, 2022, slightly up from $235 million as of Oct 31, 2021.
Zacks Rank
HEICO currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Defense Releases
Lockheed Martin LMT reported second-quarter 2022 earnings of $6.32 per share, which surpassed the Zacks Consensus Estimate of $6.29 by 0.5%. However, the bottom line declined 1.6% year over year.
Lockheed Martin’s top line declined 9.3% from the $17.03 billion reported in the year-ago quarter. LMT ended the second quarter of 2022 (on Jun 26, 2022) with $134.64 billion in the backlog compared with $135.23 billion at the end of the first quarter of 2022.
AAR Corp. AIR reported fourth-quarter fiscal 2022 adjusted earnings of 72 cents per share, which surpassed the Zacks Consensus Estimate of 68 cents by 5.9%. Earnings recorded a solid surge of 53.2% from the year-ago quarter.
AAR generated net sales worth $476.1 million, which improved 8.8% from the $437.6 million recorded in the year-ago quarter. AIR’s cash and cash equivalents amounted to $53.5 million as of May 31, 2022 compared with $51.8 million as of May 31, 2021.
Raytheon Technologies’ RTX second-quarter 2022 adjusted EPS of $1.16 beat the Zacks Consensus Estimate of $1.12 by 3.6%. Moreover, the bottom line improved 13% from the year-ago quarter’s adjusted earnings of $1.03.
Raytheon Technologies had cash and cash equivalents of $4,767 million as of Jun 30, 2022 compared with $7,832 million as of Dec 31, 2021. RTX projects the 2022 adjusted EPS in the range of $4.60-$4.80.
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