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Earnings Beat at Wesco Aircraft, View Up

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Wesco Aircraft Holdings, Inc. (WAIR - Free Report) reported second quarter fiscal 2013 results. Earnings of 33 cents per share were higher than the year-ago figure of 22 cents per share. Earnings also surpassed the Zacks Consensus Estimate of 27 cents.

Including one-time charges of 2 cents, GAAP earnings reported by the company were 31 cents per share, up from 21 cents a year ago.

The results were driven by higher sales partially offset by higher selling, general and administrative expenses.

Operational Highlights

Sales for the reported quarter increased 24% to $225.9 million from $182.1 million in the year-ago quarter. The top line also comfortably surpassed the Zacks Consensus Estimate of $212 million.

Segment revenue from North America was up 21.8% year over year driven by growth across the company’s customer base and the Interfast acquisition. The company had acquired Interfast in Jul 2012.  Interfast is a value-added distributor of specialty fasteners, fastening systems and production installation tooling for the aerospace, electronics and general industrial markets. This acquisition has accelerated Wesco Aircraft’s global growth, strengthened relationships with several strategic aerospace customers, and has supported its initiative to implement a new maintenance, repair and overhaul platform.

The company also demonstrated strong international growth in the reported quarter. It continues to experience high levels of activity in bookings, additions to existing contracts, as well as contract signings with new customers. Segment revenue from Rest of World climbed 32.9% year over year driven by a solid overseas business.

Adjusted earnings before interest tax, depreciation and amortization (EBITDA) were $51.6 million, up 34.6% year over year. Selling, general and administrative expenses were $34.9 million, up from $27.7 million in the year-ago quarter.

Financial Condition

Cash and cash equivalents as of Mar 31, 2013 were $53.9 million, down from $60.9 million as of Sep 30, 2012. Long-term debt as of Mar 31, 2013 was $585.9 million, down from $626 million at the end of the second quarter of 2012.


The company increased its top-line guidance for fiscal 2013 to the range of $880 million to $900 million versus its previous guidance of $865 million to $890 million. It also increased adjusted earnings per share in the range of $1.17 to $1.21 per share.

At the Peers

Recently, The Boeing Company (BA - Free Report) reported upbeat first quarter 2013 results, attributable to solid performance across the company's businesses. Its adjusted first quarter 2013 earnings came in at $1.73 per share, beating the Zacks Consensus Estimate of $1.47 by 17.7% as well as the year-ago profit of $1.40 by 24%. Defense and aerospace operator General Dynamics Corporation (GD - Free Report) also announced first-quarter 2013 operating earnings of $1.62 per share, surpassing the Zacks Consensus Estimate of $1.51 by 7.3%. Earnings were ahead of the year-ago figure by 5 cents.

Zacks Rank

Wesco Aircraft has a Zacks Rank #2 (Buy). We also have Triumph Group, Inc (TGI - Free Report) in the space with a Zacks Rank #2.


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