HEICO Corp. (HEI) Q1 Earnings Top Estimates, Revenues Up Y/Y

HEICO Corporation (NYSE:HEI) reported first-quarter fiscal 2019 earnings of 58 cents per share, surpassing the Zacks Consensus Estimate of 46 cents. The bottom line rose 20.8% from the prior-year figure of 48 cents. The year-over-year improvement was driven by higher sales in the reported quarter and increase in operating income.

Total Sales

Quarterly net sales of $466.1 million outpaced the Zacks Consensus Estimate of $454 million by 2.67%. The top line also increased 15.3% from
the year-ago quarter’s $404.4 million. The upside can be primarily attributed to the company’s organic growth.

Operational Update

HEICO Corp’s total costs and expenses increased 13.3% year over year to $368.2 million in the reported quarter. The uptick was driven by higher cost of sales, and increased selling, general and administrative expenses.

Segmental Performance

Flight Support Group: Net sales were up 13% year over year to $287.2 million, owing to increased demand and new product offerings within the company’s aftermarket replacement parts and specialty products categories.

Operating income improved 15% year over year to $52.9 million, courtesy of net sales growth and improved gross profit margin, mainly reflecting a more favorable product mix within the specialty products category.

Its operating margin increased to 18.4% in the first quarter of fiscal 2019, up from 18.0% in the first quarter of fiscal 2018.

Electronic Technologies Group: Net sales rose 18% year over year to $184.4 million, majorly owing to increased demand for certain defense, aerospace and space products.

The company’s operating margin improved to 28.0% in the first quarter of fiscal 2019, up from 27.8% in the first quarter of fiscal 2018.

Operating income increased 19% year over year to $51.6 million, largely on account of the quarterly net sales growth and improved gross profit margin.

Financial Details

As of Jan 31, 2019, cash and cash equivalents summed $57.9 million compared with $59.6 million as of Jan 31, 2018.

Long-term debt (net of current maturities) totaled $607.6 million as of Jan 31, 2019, up from $531.6 million as of Jan 31, 2018.

As of Jan 31, 2019, cash provided by operating activities was $49.6 million compared with $51.9 million as of Jan 31, 2018.

Fiscal 2019 Guidance

HEICO Corp estimates fiscal 2019 net sales to grow 9-11%, up from its prior growth estimates of 8-10%.

The company also anticipates net income growth of 11-13% for the fiscal, up from the prior growth estimates of approximately 10%.

Zacks Rank

HEICO Corp. currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Defense Releases

FLIR Systems Inc.’s (NASDAQ:FLIR) fourth-quarter 2018 adjusted earnings of 62 cents per share surpassed the Zacks Consensus Estimate of 60 cents by 3.3%. The company carries a Zacks Rank #3 (Hold).

Textron (NYSE:TXT) reported fourth-quarter 2018 adjusted earnings of $1.15 per share from continuing operations, which exceeded the Zacks Consensus Estimate of 98 cents by 17.3%. The company has a Zacks Rank #3.

Hexcel Corporation’s (NYSE:HXL) fourth-quarter 2018 adjusted earnings of 82 cents per share outpaced the Zacks Consensus Estimate of 80 cents by 2.5%. The company carries a Zacks Rank #2 (Buy).

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