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Shares of HEICO Corporation (HEI - Free Report) inched up 0.3% to $135.51 on May 26, reflecting investor optimism following the company's fiscal second-quarter results
The company reported second-quarter fiscal 2021 earnings of 51 cents per share, which surpassed the Zacks Consensus Estimate of 49 cents by 4.1%. The bottom line, however, declined 7.3% from the prior-year quarter’s 55 cents.
The year-over-year deterioration can be attributed to adverse impacts of the COVID-19 pandemic.
Total Sales
Quarterly net sales of $466.7 million beat the Zacks Consensus Estimate of $443 million by 5.4%. The top line, however, slipped 0.4% from the year-ago quarter’s $468.1 million on account of moderate demand witnessed for the company’s commercial aerospace parts and services as a result of the pandemic’s impact.
Heico Corporation Price, Consensus and EPS Surprise
HEICO’s total costs and expenses declined 6.3% year over year to $707.5 million in the quarter under review. The decline was due to lower cost of sales, which offset the increase in selling, general and administrative expenses.
Segmental Performance
Flight Support Group: Net sales declined 8.6% year over year to $230.3 million primarily due to lower demand for the majority of its commercial aerospace products and services.
Operating income also slumped 25.3% year over year to $35.5 million, courtesy of a decrease in net sales and higher performance-based compensation expense.
Further, its operating margin contracted 350 basis points (bps) to 15.4% year over year in the second quarter of fiscal 2021.
Electronic Technologies Group: Net sales increased 11% year over year to $243.1 million primarily owing to favorable contributions from its fiscal 2020 and 2021 acquisitions, along with organic growth of 3%.
Operating income increased 9% year over year to $71.3 million, primarily on account of quarterly net sales growth.
However, the company’s operating margin contracted 60 bps to 29.3% in the second quarter of fiscal 2021.
Financial Details
As of Apr 30, 2021, cash and cash equivalents totaled $385.4 million compared with $399.4 million as of Jan 31, 2021.
Long-term debt (net of current maturities) totaled $583.4 million as of Apr 30, 2021, down from $668.6 million as of Jan 31, 2021.
Cash flow provided by operating activities was $210.1 million at the end of second-quarter fiscal 2021 compared with $205.9 million at the second quarter of fiscal 2020.
Lockheed Martin Corp. (LMT - Free Report) reported first-quarter 2021 earnings of $6.56 per share, which surpassed the Zacks Consensus Estimate of $6.32 by 3.8%.
Hexcel Corporation (HXL - Free Report) reported first-quarter 2021 loss of 10 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 16 cents.
Raytheon Technologies Corp.’s (RTX - Free Report) first-quarter 2021 adjusted earnings per share of 90 cents outpaced the Zacks Consensus Estimate of 88 cents by 2.3%.
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HEICO (HEI) Q2 Earnings Beat Estimates, Sales Decline Y/Y
Shares of HEICO Corporation (HEI - Free Report) inched up 0.3% to $135.51 on May 26, reflecting investor optimism following the company's fiscal second-quarter results
The company reported second-quarter fiscal 2021 earnings of 51 cents per share, which surpassed the Zacks Consensus Estimate of 49 cents by 4.1%. The bottom line, however, declined 7.3% from the prior-year quarter’s 55 cents.
The year-over-year deterioration can be attributed to adverse impacts of the COVID-19 pandemic.
Total Sales
Quarterly net sales of $466.7 million beat the Zacks Consensus Estimate of $443 million by 5.4%. The top line, however, slipped 0.4% from the year-ago quarter’s $468.1 million on account of moderate demand witnessed for the company’s commercial aerospace parts and services as a result of the pandemic’s impact.
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 6.3% year over year to $707.5 million in the quarter under review. The decline was due to lower cost of sales, which offset the increase in selling, general and administrative expenses.
Segmental Performance
Flight Support Group: Net sales declined 8.6% year over year to $230.3 million primarily due to lower demand for the majority of its commercial aerospace products and services.
Operating income also slumped 25.3% year over year to $35.5 million, courtesy of a decrease in net sales and higher performance-based compensation expense.
Further, its operating margin contracted 350 basis points (bps) to 15.4% year over year in the second quarter of fiscal 2021.
Electronic Technologies Group: Net sales increased 11% year over year to $243.1 million primarily owing to favorable contributions from its fiscal 2020 and 2021 acquisitions, along with organic growth of 3%.
Operating income increased 9% year over year to $71.3 million, primarily on account of quarterly net sales growth.
However, the company’s operating margin contracted 60 bps to 29.3% in the second quarter of fiscal 2021.
Financial Details
As of Apr 30, 2021, cash and cash equivalents totaled $385.4 million compared with $399.4 million as of Jan 31, 2021.
Long-term debt (net of current maturities) totaled $583.4 million as of Apr 30, 2021, down from $668.6 million as of Jan 31, 2021.
Cash flow provided by operating activities was $210.1 million at the end of second-quarter fiscal 2021 compared with $205.9 million at the second quarter of fiscal 2020.
Zacks Rank
HEICO Corp currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Defense Releases
Lockheed Martin Corp. (LMT - Free Report) reported first-quarter 2021 earnings of $6.56 per share, which surpassed the Zacks Consensus Estimate of $6.32 by 3.8%.
Hexcel Corporation (HXL - Free Report) reported first-quarter 2021 loss of 10 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 16 cents.
Raytheon Technologies Corp.’s (RTX - Free Report) first-quarter 2021 adjusted earnings per share of 90 cents outpaced the Zacks Consensus Estimate of 88 cents by 2.3%.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency have sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>