HEICO (HEI) Reports In-Line Q4 Earnings, Hikes Dividend

HEICO Corporation (NYSE:HEI) reported fourth-quarter fiscal 2018 earnings of 49 cents per share, in line with the Zacks Consensus Estimate. The bottom line rose 25.6% from the prior-year figure of 39 cents. The year-over-year improvement was driven by higher sales in the reported quarter along with increase in operating income.

Total Sales

Quarterly net sales of $476.9 million outpaced the Zacks Consensus Estimate of $467 million by 2.1%. The top line also increased 13.2% from the year-ago $421.2 million. The upside can be primarily attributed to organic growthand recent acquisitions.

Operational Update

HEICO Corp’s total costs and expenses increased 12.4% year over year to $373.2 million in the reported quarter. The uptick was driven by higher cost of sales as well as selling, general and administrative expenses.

Quarterly Segmental Performance

Flight Support Group: Net sales were up 13% year over year to $290.3 million owing to increased demand from all Flight Support Group's product lines and latest acquisitions.

Operating income improved 17% year over year to $54.6 million, courtesy of net sales growth and improved gross profit margin mainly reflecting a more favorable product mix within the specialty products product line.

Electronic Technologies Group: Net sales rose 13% year over year to $191.1 million, majorly owing to increased demand for certain defense products.

Operating income increased 12% year over year to $20.4 million, largely on account of the quarterly net sales growth and improved gross profit margin mainly from increased net sales for certain other electronics and aerospace products as well as a more favorable product mix for certain defense products.

Financial Details

As of Oct 31, 2018, cash and cash equivalents summed $59.6 million compared with $52.1 million as of Oct 31, 2017.

Long-term debt (net of current maturities) totaled $531.6 million as of Oct 31, 2018, down from $673.5 million as of Oct 31, 2017.

As of Oct 31, 2018, cash provided by operating activities was $328.5 million compared with $288.3 million as of Oct 31, 2017.

Moreover, the company’s management announced 7 cents per share of regular semi-annual cash dividend on both classes of common stock, payable on Jan 17, 2019, to shareholders of record as of Jan, 3, 2019. This reflects a 17% increase over the prior semi-annual per share amount of 6 cents.

Fiscal 2019 Guidance

HEICO Corp estimates annual growth in fiscal 2019 net sales of 8-10% from fiscal 2018 levels.

The company also anticipates net income growth of 10% for the next fiscal year.

Zacks Rank

HEICO Corp currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Defense Releases

Huntington Ingalls’ (NYSE:HII) third-quarter 2018 earnings of $5.29 per share surpassed the Zacks Consensus Estimate of $4.14 by 27.8%.

Curtiss-Wright (NYSE:CW) reported third-quarter 2018 adjusted earnings of $1.70 per share, which outpaced the Zacks Consensus Estimate of $1.58 by 7.6%.

TransDigm Group Incorporated (NYSE:TDG) reported fourth-quarter fiscal 2018 adjusted earnings of $4.44 per share, which exceeded the Zacks Consensus Estimate of $4.27 by 4%.

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