CAE Inc. exceeded analyst expectations with its defence segment margins, while also announcing the arrival of four new board members, including the co-founder of activist investor Browning West. The company's stock surged nearly 16% following the announcements.
The CAE logo is seen in front of the aeropspace company’s plant Thursday, July 21, 2022 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
The company, which specializes in flight simulators and pilot training, announced that operating margins for its defence sector were 8.3 per cent in its third quarter ended Dec. 31, compared with 4.4 per cent during the same quarter a year earlier. Management said two of the eight contracts ended during the third quarter, while another should be done by the end of the fiscal year.“Some of them are out next year or the year after, but I mean, they roll off as planned.”
In the civil aviation sector, CAE said it expects more modest growth than previously expected due to supply issues at subcontractors of airplane manufacturers. These headwinds are slowing equipment deliveries, having a temporary negative effect on demand for pilot training.“Now, basically they have ... for a short amount of time, too many people, too many pilots hired,” he said.
The California-based firm made waves in the Quebec industry last year with its moves that forced Montreal-based Gildan to reinstate founder Glenn Chamandy as chief executive.
CAE Defence Margins Board Members Activist Investor Stock Prices
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