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 (HEI) Down 1.6% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
It has been about a month since the last earnings report for Heico Corporation (HEI - Free Report) . Shares have lost about 1.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Heico due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
HEICO Corporation’s first-quarter fiscal 2024 earnings per share (EPS) of 82 cents beat the Zacks Consensus Estimate of 73 cents by 12.3%. The bottom line also improved 22.4% from the prior-year quarter’s 67 cents.
Total Sales
The company’s net sales increased 44.4% year over year to $896.4 million in the reported quarter. Total sales also beat the Zacks Consensus Estimate of $875 million by 2.4%.
The year-over-year upside was driven by increased sales volume from both the Flight Support Group and Electric Technologies Group segments.
Operational Update
HEICO’s cost of sales increased 45.7% year over year to $549.6 million in the quarter under review. The company’s selling, general and administrative expenses increased 45.6% to $166.6 million.
Interest expense of $38.6 million skyrocketed from $6.1 million in the prior-year quarter.
Segmental Performance
Flight Support Group: Net sales from this segment surged 66.6% year over year to $618.7 million. This rise was driven by strong organic growth of 12% and the impact from its fiscal 2023 acquisitions.
The segment’s operating income soared 62.8% year over year to $136.1 million. This increase was due to solid net sales growth.
Electronic Technologies Group: The segment’s net sales increased 12.1% to $285.9 million, primarily driven by benefits from its fiscal 2023 acquisitions and increased organic net sales of aerospace products.
The segment’s operating income fell 2.1% year over year to $55.3 million, primarily due to a less favorable product sales mix and an increase in new product research and development expenses.
Financial Details
As of Jan 31, 2024, HEI’s cash and cash equivalents totaled $196.3 million compared with $171 million as of Oct 31, 2023.
Cash flow provided by operating activities was $111.7 million during the three months ending Jan 31, 2024, implying a 45.6% rise from the prior-year period’s level.
HEICO reported long-term debt (net of current maturities) of $2.50 billion at the end of Jan 31, 2024, up from $2.46 billion as of Oct 31, 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Heico has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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 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 belongs to the Zacks Aerospace - Defense Equipment industry. Another stock from the same industry, Curtiss-Wright (CW - Free Report) , has gained 6.4% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
CurtissWright reported revenues of $785.79 million in the last reported quarter, representing a year-over-year change of +3.7%. EPS of $3.16 for the same period compares with $2.92 a year ago.
For the current quarter, CurtissWright is expected to post earnings of $1.74 per share, indicating a change of +13.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.1% over the last 30 days.
CurtissWright has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Heico (HEI) Down 1.6% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Heico Corporation (HEI - Free Report) . Shares have lost about 1.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Heico due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
HEICO Q1 Earnings Surpass Estimates, Sales Rise Y/Y
HEICO Corporation’s first-quarter fiscal 2024 earnings per share (EPS) of 82 cents beat the Zacks Consensus Estimate of 73 cents by 12.3%. The bottom line also improved 22.4% from the prior-year quarter’s 67 cents.
Total Sales
The company’s net sales increased 44.4% year over year to $896.4 million in the reported quarter. Total sales also beat the Zacks Consensus Estimate of $875 million by 2.4%.
The year-over-year upside was driven by increased sales volume from both the Flight Support Group and Electric Technologies Group segments.
Operational Update
HEICO’s cost of sales increased 45.7% year over year to $549.6 million in the quarter under review. The company’s selling, general and administrative expenses increased 45.6% to $166.6 million.
Interest expense of $38.6 million skyrocketed from $6.1 million in the prior-year quarter.
Segmental Performance
Flight Support Group: Net sales from this segment surged 66.6% year over year to $618.7 million. This rise was driven by strong organic growth of 12% and the impact from its fiscal 2023 acquisitions.
The segment’s operating income soared 62.8% year over year to $136.1 million. This increase was due to solid net sales growth.
Electronic Technologies Group: The segment’s net sales increased 12.1% to $285.9 million, primarily driven by benefits from its fiscal 2023 acquisitions and increased organic net sales of aerospace products.
The segment’s operating income fell 2.1% year over year to $55.3 million, primarily due to a less favorable product sales mix and an increase in new product research and development expenses.
Financial Details
As of Jan 31, 2024, HEI’s cash and cash equivalents totaled $196.3 million compared with $171 million as of Oct 31, 2023.
Cash flow provided by operating activities was $111.7 million during the three months ending Jan 31, 2024, implying a 45.6% rise from the prior-year period’s level.
HEICO reported long-term debt (net of current maturities) of $2.50 billion at the end of Jan 31, 2024, up from $2.46 billion as of Oct 31, 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Heico has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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 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 belongs to the Zacks Aerospace - Defense Equipment industry. Another stock from the same industry, Curtiss-Wright (CW - Free Report) , has gained 6.4% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
CurtissWright reported revenues of $785.79 million in the last reported quarter, representing a year-over-year change of +3.7%. EPS of $3.16 for the same period compares with $2.92 a year ago.
For the current quarter, CurtissWright is expected to post earnings of $1.74 per share, indicating a change of +13.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.1% over the last 30 days.
CurtissWright has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.