CAE slides 14% as labor, supply woes hit 737 MAX simulator maker’s profit
2022.08.10 20:22
FILE PHOTO: Marc Parent, president and CEO of CAE Inc., speaks during a news conference in Montreal, Quebec, Canada, August 8, 2018. REUTERS/Christinne Muschi
(Reuters) – CAE (NYSE:CAE) Inc shares fell as much as 14% on Wednesday after the 737 MAX simulator maker’s quarterly profit missed market expectations on charges in its defense business.
Labor shortage and supply-chain pressures also forced the company to cut its annual outlook for adjusted operating income growth to mid-20% from mid-30%.
U.S. aerospace companies including Boeing (NYSE:BA) Co have struggled with their defense businesses, partly due to fixed-price contracts, even as their commercial aviation business benefited from a rebound in travel demand.
CAE said its operating profit fell mainly from unfavorable contract profit adjustments of C$28.9 million ($22.62 million) related to a L3Harris Technologies (NYSE:LHX)’ Military Training classified U.S. program and a CAE U.S. training program.
It posted first-quarter earnings per share without government aid of 6 cents, missing the average analyst estimate of 23 cents. Quarterly revenue of C$933.3 million also missed expectations of C$936.4 million.
U.S.-listed shares of CAE were trading lower at $22.7, while the company’s Canada shares were down 12.7% at C428.7.
($1 = 1.2779 Canadian dollars)
