CAE shedding 300 jobs despite growing revenues and profits
by The CANADIAN PRESS
CAE’s fourth-quarter profit rose to $53.2 million as it got higher revenue from its core civil and military operations
MONTREAL—CAE Inc. is cutting 300 jobs. despite revenues and profit growth, as the flight simulator and training company adjusts to the impact of military budget cuts in Europe.
The Montreal-based company is trimming about four per cent of its global workforce of 8,000. The locations of the reductions weren’t identified but CAE said most of those affected have already been notified.
CAE said its pipeline of defence opportunities remains large as orders accelerate from high-growth regions like Asia and the Middle East.
However, European governments are cutting their military budgets resulting in lower business activity.
It will record a restructuring expense of about $25 million in the first half of fiscal 2013.
Overall, CAE’s fourth-quarter profit rose to $53.2 million as it got higher revenue from its core civil and military operations as well as its new business segments.
Revenue was $506.7 million, nine per cent higher than a year earlier.
CAE was expected to earn $508 million of revenues in the fourth quarter, according to analysts polled by Thomson Reuters.
For the full year, it earned $180 million compared with $160.3 million a year earlier. Excluding one-time items, adjusted profits were $183 million.
Revenues increased 12 per cent to $1.82 billion, up from $1.63 billion in fiscal 2011.
CAE’s civil business, which manufactures and sells flight simulators to train commercial pilots and provides training at centres around the world, generated $215.4 million of revenue, up nine per cent from a year earlier.
The military segment, which also provides training equipment and services to governments around the world, contributed $267.1 million of revenue, up four per cent from a year earlier.
The combined military segment order backlog increased to $2.19 billion, including a record level of U.S. defence contracts.
CAE’s relatively new mining and healthcare segments contributed a total of $24.2 million in revenue for the quarter, up from $11.1 million last year.