LONGUEUIL, Que.—Heroux-Devtek Inc. enjoyed a 49 per cent revenue boost last quarter as a pair of acquisitions beefed up its bottom line, exceeding analyst expectations and raising its share price by 10 per cent.
The aircraft parts company’s acquisitions of Michigan-based rival Beaver Aerospace for US$23.5 million and Madrid-based landing gear-maker CESA for (euro)140 million helped push profits to $7.4 million in the quarter ended Dec. 31, the company said.
Revenue totalled $144.5 million in its third quarter, up from $97 million in the same quarter a year earlier.
The Beaver and CESA acquisitions together contributed $39.6 million, while organic growth hit eight per cent, the company said.
The surprise results sparked a spike in share price, which closed at $13.98.
Analyst Benoit Poirier of Desjardins Capital Markets called the results “stellar,” noting that the Longueuil-based company has received Boeing’s customer certification for a surface treatment process that “should allow the company to realize its full margin potential.”
Management forecast revenues of between $620 million and $650 million in 2022, which would mark a 35 per cent leap from expected revenues of roughly $465 million in 2019.
Heroux-Devtek, which was founded in the Second World War as a machine parts maker supplying the military, saw a 76 per cent year-over-year rise in revenue last quarter to $79 million from its defence segment, which Poirier expected to hit just $62 million. Commercial revenues come in at $66 million, a 25 per cent year-over-year increase.
Profits amounted to 20 cents per diluted share for the quarter ended Dec. 31 compared with a profit of $626,000 or two cents per share a year ago, the company said.
On an adjusted basis, Heroux-Devtek earned 26 cents per share for the quarter, up from 16 cents per share a year ago.
Analysts on average had expected adjusted earnings per share of 17 cents, according to Thomson Reuters Eikon.News from © Canadian Press Enterprises Inc. 2019