HEICO Corporation (HEI - Free Report) reported third-quarter fiscal 2018 earnings of 49 cents per share, which surpassed the Zacks Consensus Estimate of 45 cents by 8.9%. The bottom line also rose 44.1% from the prior-year figure of 34 cents. The year-over-year improvement was driven by higher sales in the reported quarter and increase in operating income.
Quarterly net sales of $465.8 million outpaced the Zacks Consensus Estimate of $441 million by 5.7%. The top line also increased 19% from the year-ago figure of $391.5 million. The upside can be primarily attributed to organic growth that the company witnessed on virtue of increased demand for its defense products as well as continued contributions from well-managed and profitable acquisitions.
HEICO Corp’s total costs and expenses increased 15.5% year over year to $364.4 million in the reported quarter. The uptick was driven by higher cost of sales as well as selling, general and administrative expenses.
Quarterly Segmental Performance
Flight Support Group: Net sales were up 11% year over year to $285.1 million owing to the impact of the company’s fiscal 2017 profitable acquisitions as well as organic growth of 10% within this segment’s product line.
Operating income improved 17% year over year to $54.7 million, courtesy of net sales growth.
Electronic Technologies Group: Net sales surged 35% year over year to $186.4 million, majorly owing to the favorable impact created by the company’s fiscal 2017 and 2018 acquisitions as well as organic growth of 16%.
Operating income increased 45% year over year to $56 million, largely on account of the quarterly net sales growth and an improved gross profit margin as well as a more favorable product mix for certain defense products.
As of Jul 31, 2018, cash and cash equivalents summed $66.9 million compared with $52.1 million as of Oct 31, 2017.
Long-term debt (net of current maturities) totaled $622.9 million as of Jul 31, 2018, up from $673.5 million as of Oct 31, 2017.
As of Jul 31, 2018, cash provided by operating activities was $204.7 million compared with $179.3 million as of Jul 31, 2017.
Fiscal 2018 Guidance
HEICO Corp estimates annual growth in its fiscal 2018 net sales to be in the range of 15-16%, up from the prior estimates in the band of 13-14%.
The company also anticipates its net income growth to be in the range of 35-37% for fiscal 2018, up from 33-35% projected earlier.
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
Boeing (BA - Free Report) reported adjusted earnings of $3.33 per share in second-quarter 2018, beating the Zacks Consensus Estimate of $3.24 by 2.8%.
Lockheed Martin’s (LMT - Free Report) second-quarter 2018 adjusted earnings came in at $4.31 per share, outpacing the Zacks Consensus Estimate of $3.89 by 10.8%.
Textron (TXT - Free Report) reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%.
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