HEICO Corporation (HEI - Free Report) reported third-quarter fiscal 2019 earnings of 59 cents per share, which surpassed the Zacks Consensus Estimate of 53 cents by 11.3%. The bottom line also rose 20.4% from the prior-year figure of 49 cents. The year-over-year improvement was driven by higher sales in the reported quarter and increase in operating income.
Quarterly net sales of $532.3 million outpaced the Zacks Consensus Estimate of $514 million by 3.6%. The top line also increased 14.3% from the year-ago quarter’s $465.8 million. The upside can be primarily attributed to the company’s high-single digit organic growth in the reported quarter.
HEICO Corp’s total costs and expenses increased 14.5% year over year to $1,177.6 million in the quarter under review. The increase was driven by higher cost of sales, and increased selling, general and administrative expenses.
Flight Support Group: Net sales rose 12% year over year to $320 million driven by increased demand and new product offerings within our aftermarket replacement parts and specialty products product lines.
Operating income improved 18% year over year to $64.8 million, courtesy of net sales growth and improved gross profit margin. This reflects a more favorable product mix within the company’s aftermarket replacement parts product line.
Also, its operating margin expanded to 20.2% in the third quarter of fiscal 2019, up from 19.2% in the third quarter of fiscal 2018.
Electronic Technologies Group: Net sales increased 16% year over year to $216.1 million primarily owing to 7% organic growth driven by solid demand for certain defense and aerospace products.
Operating income increased 11% year over year to $62.2 million, largely on account of the quarterly net sales growth and improved gross profit margin.
The company’s operating margin came in at 28.8% in the third quarter of fiscal 2019, down from 30.1% in the third quarter of fiscal 2018.
As of Jul 31, 2019, cash and cash equivalents summed $59 million compared with $64.1 million as of Apr 30, 2019.
Long-term debt (net of current maturities) totaled $639.3 million as of Jul 31, 2019, up from $555.5 million as of Apr 30, 2019.
As of Jul 31, 2019, cash provided by operating activities was $313.4 million compared with $214.8 million as of Jul 31, 2018.
Fiscal 2019 Guidance
HEICO Corp anticipates fiscal 2019 net sales to grow 14-15%, up from its prior growth estimates of 12-13%.
The company also anticipates net income growth of 23-24% for the fiscal year, up from the prior growth estimates of approximately 17-18%. It also expects cash flow from operations to be $405 million, up from the prior estimate of $380 million.
HEICO Corp currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Defense Releases
FLIR Systems Inc.’s (FLIR - Free Report) second-quarter 2019 adjusted earnings of 56 cents per share surpassed the Zacks Consensus Estimate of 55 cents by 1.8%.
Textron Inc. (TXT - Free Report) reported second-quarter 2019 earnings from continuing operations of 93 cents per share, which exceeded the Zacks Consensus Estimate of 85 cents by 9.4%.
Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2019 earnings of $5 per share, which outpaced the Zacks Consensus Estimate of $4.74 by 5.5%.
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