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CAE Inc. (CAE) to Report Q3 Earnings: What's in the Cards?

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CAE Inc. CAE is expected to release third-quarter of fiscal 2020 results soon.

In the last reported quarter, the company delivered a positive earnings surprise of 10.53%. The company beat the Zacks Consensus Estimate in two of the trailing four quarters and missed the same twice, with the average negative surprise being 0.60%.

Let’s see how things have shaped up prior to this announcement.

Factors to Consider

Being a leading provider of civil aviation training solutions, CAE Inc.’s top line is expected to have been driven by pilot training agreements that the company frequently signs with airlines.

In business aviation, the company signed a strategic partnership with Directional Aviation Capital and its affiliates, during the fiscal second quarter. As part of this agreement, CAE Inc. concluded the acquisition of a 50% stake in SIMCOM Holdings at the onset of the fiscal third quarter. Positive synergies from this takeover are expected to have boosted the company’s overall results in the soon-to-be-reported quarter.

CAE Inc Price and EPS Surprise

CAE Inc Price and EPS Surprise

CAE Inc price-eps-surprise | CAE Inc Quote

The company is expected to have benefited from the integration of the Bombardier Business Aircraft Training business.  Moreover, the company’s Healthcare business segment along with the American Society of Anesthesiologists (ASA) released the final two training modules of Anesthesia SimSTAT, their first of its kind virtual simulation program, during the soon-to-be-reported quarter.  

Considering the aforementioned developments, we remain optimistic about CAE Inc.’s upcoming quarterly results. The Zacks Consensus Estimate for the company’s fiscal third-quarter sales stands at $729.6 million, indicating an improvement of 18.1% from the year-ago quarter’s reported figure.

The consensus estimate for the company’s fiscal third-quarter earnings per share is pegged at 27 cents, which indicates an improvement of 22.7% from the year-ago quarter reported figure.

However, the upcoming results are expected to reflect elevated costs on account of launch of products.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for CAE Inc. this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

CAE Inc. has an Earnings ESP of 0.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Recent Defense Releases

Lockheed Martin (LMT - Free Report) reported fourth-quarter 2019 earnings of $5.29 per share, which surpassed the Zacks Consensus Estimate of $4.99 by 6%. The bottom line also improved 20.5% from $4.39 in the year-ago quarter.

General Dynamics’ GD fourth-quarter earnings from continuing operations of $3.51 per share beat the Zacks Consensus Estimate of $3.46 by 1.45%.

TransDigm Group Incorporated TDG reported first-quarter fiscal 2020 adjusted earnings of $4.93 per share, which surpassed the Zacks Consensus Estimate of $4.56 by 8.1%.

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