We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Heico Corporation (HEI) Up 1.8% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
A month has gone by since the last earnings report for Heico Corporation (HEI - Free Report) . Shares have added about 1.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Heico Corporation due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Heico Corp.’s first-quarter fiscal 2023 earnings per share (EPS) of 67 cents beat the Zacks Consensus Estimate of 66 cents by 1.5%. The bottom line also improved 6.3% from the prior-year period’s 63 cents.
Total Sales
The company’s net sales increased 26.6% year over year to $620.9 million in the reported quarter, primarily driven by improvement in commercial aerospace market. The total sales also beat the Zacks Consensus Estimate of $579 million by 7.7%.
Operational Update
HEICO’s total costs and expenses increased 23.2% year over year to $491.5 million in the quarter under review. The increase was due to higher cost of sales and SG&A expenses.
Segmental Performance
Flight Support Group: Net sales surged 36.2% year over year to $371.3 million. This hike was driven by increased demand for the majority of its commercial aerospace products and services, resulting from continued recovery in global commercial air travel.
The operating income soared 60% year over year to $83.6 million. This increase was due to solid net sales growth, improved gross profit margin and efficiencies realized from higher net sales volume. Further, its operating margin expanded by a massive 330 basis points (bps) to 22.5% compared with 19.2% in the prior-year period.
Electronic Technologies Group: The segment’s net sales increased 15% to $255.1 million, primarily due to increased demand for other electronics, space and medical products.
The segment’s operating income improved 2% year over year to $56.5 million, primarily driven by higher net sales volume. The company’s operating margin contracted by 280 bps to 22.2%.
Financial Details
As of Jan 31, 2023, HEI’s cash and cash equivalents totaled $142.6 million compared with $139.5 million as of Oct 31, 2022.
Cash flow provided by operating activities was $76.7 million during the three months preceding Jan 31, 2023, indicating a 1.7% decline from the prior-year period.
HEICO reported long-term debt (net of current maturities) of $781.2 million as of Jan 31, 2023, up from $288.6 million as of Oct 31, 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Heico Corporation has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Heico Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Heico Corporation is part of the Zacks Aerospace - Defense Equipment industry. Over the past month, TransDigm Group (TDG - Free Report) , a stock from the same industry, has gained 4.9%. The company reported its results for the quarter ended March 2023 more than a month ago.
TransDigm reported revenues of $1.59 billion in the last reported quarter, representing a year-over-year change of +20%. EPS of $5.98 for the same period compares with $3.86 a year ago.
TransDigm is expected to post earnings of $6.31 per share for the current quarter, representing a year-over-year change of +30.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.6%.
TransDigm has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Heico Corporation (HEI) Up 1.8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Heico Corporation (HEI - Free Report) . Shares have added about 1.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Heico Corporation due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
HEICO Q1 Earnings Beat Estimates, Sales Increase Y/Y
Heico Corp.’s first-quarter fiscal 2023 earnings per share (EPS) of 67 cents beat the Zacks Consensus Estimate of 66 cents by 1.5%. The bottom line also improved 6.3% from the prior-year period’s 63 cents.
Total Sales
The company’s net sales increased 26.6% year over year to $620.9 million in the reported quarter, primarily driven by improvement in commercial aerospace market. The total sales also beat the Zacks Consensus Estimate of $579 million by 7.7%.
Operational Update
HEICO’s total costs and expenses increased 23.2% year over year to $491.5 million in the quarter under review. The increase was due to higher cost of sales and SG&A expenses.
Segmental Performance
Flight Support Group: Net sales surged 36.2% year over year to $371.3 million. This hike was driven by increased demand for the majority of its commercial aerospace products and services, resulting from continued recovery in global commercial air travel.
The operating income soared 60% year over year to $83.6 million. This increase was due to solid net sales growth, improved gross profit margin and efficiencies realized from higher net sales volume. Further, its operating margin expanded by a massive 330 basis points (bps) to 22.5% compared with 19.2% in the prior-year period.
Electronic Technologies Group: The segment’s net sales increased 15% to $255.1 million, primarily due to increased demand for other electronics, space and medical products.
The segment’s operating income improved 2% year over year to $56.5 million, primarily driven by higher net sales volume. The company’s operating margin contracted by 280 bps to 22.2%.
Financial Details
As of Jan 31, 2023, HEI’s cash and cash equivalents totaled $142.6 million compared with $139.5 million as of Oct 31, 2022.
Cash flow provided by operating activities was $76.7 million during the three months preceding Jan 31, 2023, indicating a 1.7% decline from the prior-year period.
HEICO reported long-term debt (net of current maturities) of $781.2 million as of Jan 31, 2023, up from $288.6 million as of Oct 31, 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Heico Corporation has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Heico Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Heico Corporation is part of the Zacks Aerospace - Defense Equipment industry. Over the past month, TransDigm Group (TDG - Free Report) , a stock from the same industry, has gained 4.9%. The company reported its results for the quarter ended March 2023 more than a month ago.
TransDigm reported revenues of $1.59 billion in the last reported quarter, representing a year-over-year change of +20%. EPS of $5.98 for the same period compares with $3.86 a year ago.
TransDigm is expected to post earnings of $6.31 per share for the current quarter, representing a year-over-year change of +30.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.6%.
TransDigm has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.