Heroux-Devtek beats profit expectations as acquisitions boost bottom line - InfoNews

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Heroux-Devtek beats profit expectations as acquisitions boost bottom line

Gilles Labbe, president and CEO of Heroux-Devtek, chats with shareholders prior to a special meeting of shareholders Tuesday, December 18, 2012 in Montreal. Heroux-Devtek Inc. says it earned $7.4 million in its latest quarter as its revenue was boosted compared with a year ago by acquisitions. THE CANADIAN PRESS/Paul Chiasson
February 07, 2019 - 1:32 PM

LONGUEUIL, Que. - Heroux-Devtek Inc. enjoyed a 49 per cent revenue boost last quarter as a pair of acquisitions beefed up its bottom line, exceeding analyst expectations and raising its share price by 10 per cent.

The aircraft parts company's acquisitions of Michigan-based rival Beaver Aerospace for US$23.5 million and Madrid-based landing gear-maker CESA for €140 million helped push profits to $7.4 million in the quarter ended Dec. 31, the company said.

Revenue totalled $144.5 million in its third quarter, up from $97 million in the same quarter a year earlier.

The Beaver and CESA acquisitions together contributed $39.6 million, while organic growth hit eight per cent, the company said.

The surprise results sparked a spike in share price, which closed at $13.98.

Analyst Benoit Poirier of Desjardins Capital Markets called the results "stellar," noting that the Longueuil-based company has received Boeing's customer certification for a surface treatment process that "should allow the company to realize its full margin potential."

Management forecast revenues of between $620 million and $650 million in 2022, which would mark a 35 per cent leap from expected revenues of roughly $465 million in 2019.

Heroux-Devtek, which was founded in the Second World War as a machine parts maker supplying the military, saw a 76 per cent year-over-year rise in revenue last quarter to $79 million from its defence segment, which Poirier expected to hit just $62 million. Commercial revenues come in at $66 million, a 25 per cent year-over-year increase.

Profits amounted to 20 cents per diluted share for the quarter ended Dec. 31 compared with a profit of $626,000 or two cents per share a year ago, the company said.

On an adjusted basis, Heroux-Devtek earned 26 cents per share for the quarter, up from 16 cents per share a year ago.

Analysts on average had expected adjusted earnings per share of 17 cents, according to Thomson Reuters Eikon.

Companies in this story: (TSX:HRX)

News from © The Canadian Press, 2019
The Canadian Press

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