Canada's CAE slips as aviation training demand stumbles
Reuters
Published May 19, 2021 08:42AM ET
Updated May 19, 2021 11:46AM ET
(Reuters) -CAE Inc on Wednesday posted a drop in aviation training revenue after two straight quarters of growth in that unit, hurt by coronavirus restrictions at its centers globally, sending the Canadian company's shares down as much as 9%.
A recovery in travel demand in summer was expected to boost demand for CAE (NYSE:CAE)'s flight simulators, used by planemakers including Boeing (NYSE:BA) Co and Airbus SE (OTC:EADSY), but rising COVID-19 infections and slow vaccine rollouts in some parts of the world have continued to disrupt the airline industry.
Chief Executive Officer Marc Parent, however, said he was confident of "strong growth" in CAE's aviation training unit and services in fiscal 2022, even as the company did not provide details on the outlook.
The company said it now expects to take additional restructuring expenses of about C$50 million in fiscal year 2022, higher than the C$30 million it forecast in February.
Faced with the pandemic-led slowdown in flight training, CAE in March bolstered its defense business as it agreed to buy L3Harris Technologies (NYSE:LHX) Inc's military training division.
Fourth-quarter defence revenue of C$334.4 million was down 2% compared to the year-ago period, but rose by 12% from the three months prior.
CAE's adjusted net income, which included COVID-19 relief funds from the government and excluded restructuring, integration and acquisition costs, beat analysts' estimates by one Canadian cent at 22 Canadian cents.
CAE's total revenue was down 8% at C$894.3 million but beat Wall Street estimates of C$879 million.
Toronto-listed shares of CAE were last trading down 5.8% at C$33.97.
($1 = 1.2066 Canadian dollars)
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Written By: Reuters
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