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HEICO Corporation (HEI - Free Report) reported third-quarter fiscal 2020 earnings of 40 cents per share, which surpassed the Zacks Consensus Estimate of 30 cents by 33.3%. The bottom line however declined 32.2% from the prior-year quarter’s figure of 59 cents.
The year-over-year downturn can be attributed to significant decline in quarterly sales as well as operating income.
Total Sales
Quarterly net sales of $386.4 million beat the Zacks Consensus Estimate of $357 million by 8.4%. The top line however declined 27.4% from the year-ago quarter’s figure of $532.3 million due to lower revenues generated by both the Flight Support Group and Electronic Technologies group segments.
Heico Corporation Price, Consensus and EPS Surprise
HEICO’s total costs and expenses declined 23% year over year to $318 million in the quarter under review. The decrease was due to lower cost of sales as well as selling, general and administrative expenses.
Segmental Performance
Flight Support Group: Net sales declined 44.3% year over year to $178.2 million owing to lower demand across all of its product lines that resulted from the significant decline in global commercial air travel beginning in March 2020 due to the coronavirus outbreak.
Its operating income decreased 81.5% year over year to $12 million, courtesy of sales decline and lower gross profit margin, mainly within its aftermarket replacement parts and repair and overhaul parts and services product line. Also, an increase in bad debt expense due to potential collection difficulties from certain commercial aviation customers that filed for bankruptcy protection, as a result of the financial impact of the pandemic, resulted in this operating income decline.
Electronic Technologies Group: Net sales decreased 2% year over year to $210.9 million primarily owing to lower shipments of this unit’s defense and commercial aerospace products, mainly attributable to the outbreak.
Operating income slipped 0.5% year over year to $61.9 million.
Financial Details
As of Jul 31, 2020, cash and cash equivalents totaled $395.3 million compared with $57 million as of Oct 31, 2019.
Long-term debt (net of current maturities) totaled $739 million as of Jul 31, 2020, up from $561 million as of Oct 31, 2019.
As of Jul 31, 2020, cash provided by operating activities was $299 million compared with $313.4 million as of Jul 31, 2019.
Teledyne Technologies (TDY - Free Report) reported second-quarter 2020 adjusted earnings of $2.43 per share, which surpassed the Zacks Consensus Estimate of $2.01 by 20.9%.
Lockheed Martin (LMT - Free Report) reported second-quarter 2020 adjusted earnings of $6.13 per share, which surpassed the Zacks Consensus Estimate of $5.71 by 7.4%.
Hexcel Corporation (HXL - Free Report) reported second-quarter 2020 adjusted earnings of 8 cents per share, which missed the Zacks Consensus Estimate of 20 cents by 60%.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
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HEICO (HEI) Q3 Earnings Beat Estimates, Sales Decline Y/Y
HEICO Corporation (HEI - Free Report) reported third-quarter fiscal 2020 earnings of 40 cents per share, which surpassed the Zacks Consensus Estimate of 30 cents by 33.3%. The bottom line however declined 32.2% from the prior-year quarter’s figure of 59 cents.
The year-over-year downturn can be attributed to significant decline in quarterly sales as well as operating income.
Total Sales
Quarterly net sales of $386.4 million beat the Zacks Consensus Estimate of $357 million by 8.4%. The top line however declined 27.4% from the year-ago quarter’s figure of $532.3 million due to lower revenues generated by both the Flight Support Group and Electronic Technologies group segments.
Heico Corporation Price, Consensus and EPS Surprise
Heico Corporation price-consensus-eps-surprise-chart | Heico Corporation Quote
Operational Update
HEICO’s total costs and expenses declined 23% year over year to $318 million in the quarter under review. The decrease was due to lower cost of sales as well as selling, general and administrative expenses.
Segmental Performance
Flight Support Group: Net sales declined 44.3% year over year to $178.2 million owing to lower demand across all of its product lines that resulted from the significant decline in global commercial air travel beginning in March 2020 due to the coronavirus outbreak.
Its operating income decreased 81.5% year over year to $12 million, courtesy of sales decline and lower gross profit margin, mainly within its aftermarket replacement parts and repair and overhaul parts and services product line. Also, an increase in bad debt expense due to potential collection difficulties from certain commercial aviation customers that filed for bankruptcy protection, as a result of the financial impact of the pandemic, resulted in this operating income decline.
Electronic Technologies Group: Net sales decreased 2% year over year to $210.9 million primarily owing to lower shipments of this unit’s defense and commercial aerospace products, mainly attributable to the outbreak.
Operating income slipped 0.5% year over year to $61.9 million.
Financial Details
As of Jul 31, 2020, cash and cash equivalents totaled $395.3 million compared with $57 million as of Oct 31, 2019.
Long-term debt (net of current maturities) totaled $739 million as of Jul 31, 2020, up from $561 million as of Oct 31, 2019.
As of Jul 31, 2020, cash provided by operating activities was $299 million compared with $313.4 million as of Jul 31, 2019.
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
Teledyne Technologies (TDY - Free Report) reported second-quarter 2020 adjusted earnings of $2.43 per share, which surpassed the Zacks Consensus Estimate of $2.01 by 20.9%.
Lockheed Martin (LMT - Free Report) reported second-quarter 2020 adjusted earnings of $6.13 per share, which surpassed the Zacks Consensus Estimate of $5.71 by 7.4%.
Hexcel Corporation (HXL - Free Report) reported second-quarter 2020 adjusted earnings of 8 cents per share, which missed the Zacks Consensus Estimate of 20 cents by 60%.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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