CAE: Next beautifull dive.....NewsCAE 4th-Quarter Net Falls 91 Percent After Unit Sale (Update2)
May 17 (Bloomberg) -- CAE Inc., the world's biggest maker of equipment for training pilots, said fiscal fourth-quarter net income fell 91 percent from a year earlier, when the company sold its marine-equipment business.
Profit for the period ended March 31 fell to C$9.4 million ($8.5 million), or 4 cents a share, from C$108.8 million, or 44 cents, a year ago, Montreal-based CAE said today in a statement. Revenue rose 8.2 percent to C$284.3 million.
CAE sold its ship-simulator unit to L-3 Communications Corp. last year for C$238.6 million. Chief Executive Officer Robert Brown, who called 2006 a ``transition year'' for CAE, has sold businesses and cut jobs since taking over in 2004.
The rise of the Canadian dollar against its U.S. counterpart also cut the value of CAE's order backlog by about 7 percent to C$2.5 billion, the company said. The currency gained 3.8 percent over CAE's fiscal year and reached a 28-year high this month.
``The company is feeling the effects of a strong Canadian dollar which to some extent is depressing their growth and margins, but fundamentally the trends for CAE in the end markets are still very strong,'' Versant Partners analyst Cameron Doerksen said today in an interview. ``The civil side of the business is continuing to show improvement.''
CAE shares fell 33 cents, or 3.4 percent, to C$9.33 in 10:21 a.m. trading on the Toronto Stock Exchange today.
Flight Simulators
Sales of flight simulators to commercial airlines rose 44 percent. CAE is benefiting as aircraft makers such as Boeing Co. and Airbus SAS sell new jets to carriers in Asia and the Middle East, increasing demand for its equipment.
``What drives the new simulator sales market is aircraft orders and deliveries and Boeing and Airbus had a record year of new aircraft orders in 2005 and that's continuing into 2006,'' Doerksen said in an interview yesterday.
Excluding results from the marine unit and some costs and gains, profit rose to 9 cents a share from 6 cents, CAE said, matching Doerksen's estimate. The average estimate of 11 analysts surveyed by Thomson Financial was 9 cents. Thomson declined to say whether the estimate included one-time items.
CAE sold 21 cockpit simulators to carriers such as Japan Airlines International and India's Jet Airways in the fiscal year, leading the company to an annual profit of C$64.9 million compared with a loss of C$199.9 million a year ago.
Revenue from providing training and services to military customers fell 2 percent to C$47.7 million and military equipment sales dropped 4 percent to C$77.5 million in the quarter, CAE said.
``The military business had a little bit of a weak quarter, but it tends to be a lumpy business so it's difficult to isolate trends based on one quarter,'' Doerksen said.
Revenue from training commercial pilots rose 2 percent to C$81.1 million, and equipment sales to airlines climbed to C$78 million, the company said.
(CAE will hold a conference call at 1 p.m. Montreal time to discuss fiscal fourth-quarter results at https://www.cae.com )
To contact the reporter on this story:
Doug Alexander in Toronto at dalexander3@Bloomberg.net;
Frederic Tomesco in Montreal at tomesco@bloomberg.net.
Last Updated: May 17, 2006 10:23 EDT