CAE INC. $14 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 262.2 million; Market cap: $3.7 billion; Price-to-sales ratio: 1.8; Dividend yield: 1.7%; TSINetwork Rating: Average; www.cae.com) earned $46.1 million in its fiscal 2014 third quarter, which ended December 31, 2013. That’s up 22.9% from $37.5 million a year earlier. Per-share earnings rose 28.6%, to $0.18 from $0.14.
Sales rose 2.5%, to $513.6 million from $500.9 million. The company sold 12 flight simulators in the quarter and three more since January 1. That brings this fiscal year’s total to 43—a new record.
As a result, sales at its civilian simulator and pilot-training businesses (55% of total sales) rose 3.2%.
The company’s strong reputation is also helping it win new orders from military clients. Sales at its military businesses (39%) rose 1.5%. CAE gets the remaining 6% of its sales by making simulators for other uses, such as medical training. This division’s sales rose 3.5%.
CAE spent $16.1 million (or 3.1% of its sales) on research during the quarter, up 15.8% from $13.9 million (or 2.8%) a year earlier. That hurts its current earnings but helps it develop simulators for new aircraft ahead of its competitors.
The company’s order backlog is now $4.1 billion, or roughly two years’ worth of sales. That cuts its risk.
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