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

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HEICO Corporation (HEI - Free Report) 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.

Heico Corporation Price, Consensus and EPS Surprise

 

Heico Corporation Price, Consensus and EPS Surprise | Heico Corporation Quote

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

Curtiss-Wright (CW - Free Report) 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 (TDG - Free Report) 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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