MONTREAL – CAE Inc. has limited its profit forecast for the year after reporting a 96% drop in year-over-year earnings in the last quarter due to supply chain issues and impairments on two expensive defense projects.
The Montreal-based flight and healthcare simulator maker has lowered its outlook for operating profit growth to around 20% from the mid-1930s, after posting $1.7 million in net profit attributable to shareholders during for the quarter ended June 30.
“We delivered a mixed performance in the first quarter, with civilian delivering results in line with our vision of strong annual growth and increasing market share momentum. Defense results were disappointing, however, well below our expectations,” CEO Marc Parent told investors on a conference call.
Two counts totaling $28.9 million resulted from recostings of two U.S. military training contracts, one of which experienced significant delays by CAE, Parent said.
“I am convinced that there are no more bad surprises like this in our order book,” he said.
The company is struggling with labor constraints across its three segments, but staffing shortages in its defense wing in particular mean fewer billable hours and less efficient work, he said. declared.
“Supply chain challenges were also more severe than expected, which put pressure on schedules. We also experienced delays on a few key orders on which we expected to start work during the quarter. .”
However, the company added $1.05 billion in additional orders for a record backlog of $10 billion and an orders-to-sales ratio – the ratio of orders received to units shipped and sold – of 1.12. .
The global semiconductor shortage has weighed on CAE’s three divisions, particularly its healthcare business, Parent said.
“Overall, we’ve handled it pretty well,” he said, adding that the shortages aren’t limited to chips, with delivery times more than doubling for some parts.
“Obviously it disrupts the schedules. So in order for us to maintain the schedules, we have to do all kinds of things like, for example, pay emergency costs for parts, we have to work overtime, we have to perform out-of-work sequence operations, which introduces all sorts of inefficiencies.
On Wednesday, CAE said revenue jumped 24% to $933.3 million last quarter from $752.7 million in the same three months last year.
On an adjusted basis, earnings fell 68% to 6 cents per share from 19 cents per share. The plunge was well below analysts’ expectations of 23 cents per share, according to financial data firm Refinitiv.
Net income attributable to equity holders for the quarter ended June 30 totaled $1.7 million, compared to $46.4 million a year earlier.
This report from The Canadian Press was first published on August 10, 2022.
Companies in this story: (TSX:CAE)
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