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Heico (HEI) Q1 Earnings Beat Estimates, Sales Increase Y/Y

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Shares of HEICO Corporation (HEI - Free Report) have improved 4.6% to $144.03 since the company released its first-quarter fiscal 2022 results on Feb 23.

HEICO’s first-quarter fiscal 2022 earnings per share (EPS) of 63 cents surpassed the Zacks Consensus Estimate of 56 cents by 12.5%. The bottom line improved 23.5% from the prior-year period’s figure of 51 cents per share .

The year-over-year improvement can be attributed to higher net sales and operating income.

Total Sales

The company’s net sales increased 17% year over year to $490.3 million in the reported quarter, primarily driven by the consistent rebound observed in demand for the company’s commercial aerospace products and services.

Moreover, total sales beat the Zacks Consensus Estimate of $479 million by 2.4%.

Heico Corporation Price, Consensus and EPS Surprise

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 increased 15.9% year over year to $391.5 million in the quarter under review. The increase was due to the higher cost of sales as well as SG&A expenses.  

Segmental Performance

Flight Support Group: Net sales surged 36.8% year over year to $272.7 million, driven by enhanced demand for the majority of its commercial aerospace products and services along with the impact of its profitable fiscal 2021 acquisitions.

Operating income soared 102.8% year over year to $52.4 million on the improved gross profit margin and efficiencies realized from the higher net sales volume. Further, its operating margin expanded massive 620 basis points (bps) to 19.2% compared with 13% in the prior-year period.

Electronic Technologies Group: The segment’s net sales slipped 0.6% to $222.3 million in the quarter under review, primarily due to lower demand for its defense and space products, partially offset by increased demand for medical and other electronics products. The benefits from fiscal 2021 acquisitions contributed to this segment’s sales growth.

The segment’s operating income decreased 7.6% year over year to $55.6 million, primarily on the net sales decline and lower gross profit margin. The company’s operating margin contracted 190 bps to 25%.

Financial Details

As of Jan 31, 2022, HEI’s cash and cash equivalents totaled $124.8 million compared with $108.3 million as of Oct 31, 2021.

Cash flow provided by operating activities was $78 million during the fiscal first quarter, reflecting a 27.3% decline from the prior-year period.

HEICO reported long-term debt (net of current maturities) of $235.7 million as of Jan 31, 2022, slightly up from $235 million as of Oct 31, 2021.

Zacks Rank

HEICO currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Defense Releases

Hexcel Corporation (HXL - Free Report) reported fourth-quarter 2021 adjusted earnings of 16 cents per share, which exceeded the Zacks Consensus Estimate of 12 cents by 33.3%. The bottom line also improved from a loss of 18 cents per share incurred in the year-ago quarter.

The Zacks Consensus Estimate for Hexcel’s 2022 earnings suggests an improvement of a solid 359.3% from the prior-year figure. For HXL’s 2022 sales, the Zacks Consensus Estimate indicates growth of 17.5% from the prior-year figure.

Huntington Ingalls Industries, Inc.’s (HII - Free Report) fourth-quarter 2021 adjusted earnings of $2.84 per share declined 34.7% from $4.35 reported in the prior-year quarter. Total revenues came in at $2,677 million, lagging the Zacks Consensus Estimate of $2,738.4 million by 2.2%.

The Zacks Consensus Estimate for Huntington Ingalls’s 2022 earnings suggests a decline of 8.4% from the prior-year figure. For HII’s 2022 sales, the Zacks Consensus Estimate suggests growth of 11.3% from the prior-year figure.

Raytheon Technologies Corporation’s (RTX - Free Report) fourth-quarter 2021 adjusted EPS of $1.08 beat the Zacks Consensus Estimate of $1.01 by 6.9%. Moreover, the bottom line improved 46% from the year-ago quarter’s adjusted earnings of 74 cents.

The Zacks Consensus Estimate for Raytheon’s 2022 earnings suggests an improvement of 14.4% from the prior-year figure. For RTX’s 2022 sales, the Zacks Consensus Estimate indicates growth of 5.5% from the prior-year figure. Raytheon boasts a long-term earnings growth rate of 10.2%.