CAE foresees ‘major disruptions’ this quarter due to COVID-19 pandemic

CAE foresees ‘major disruptions’ this quarter due to COVID-19 pandemic

CAE foresees ‘major disruptions’ this quarter due to COVID-19 pandemic

MONTREAL — Flight simulator maker CAE Inc. saw profits fall six per cent last quarter due to the impact of the COVID-19 pandemic — and the turbulence isn’t over.

“As we look to the fiscal year ahead, we believe it will be a tale of two halves, with the first half of the year marked by sharply lower demand and major disruptions to our operations, and the second half slightly more positive as markets potentially begin to reopen and travel restrictions ease,” chief executive Mark Parent said in a release Friday.

The concerns follow “a material disruption” to the firm in the quarter ended March 31 as the pandemic continues to pummel the aviation industry amid border shutdowns and plunging demand, with most carriers imposing a pilot hiring freeze and broader cost reduction schemes.

The virus has hit the Montreal-based company’s civil aviation training business particularly hard. CAE kicked off its fiscal year last month with about one-third of its training centres around the globe closed and production at its main manufacturing facility in Montreal suspended.

The outbreak has also prompted delays in executing defence programs, CAE said.

Like many manufacturers forced to halt regular operations over the past two months, CAE pivoted to health care, assigning 500 employees to make 10,000 ventilators on a contract with the federal government. The product is in the final stages of certification by health authorities, CAE said.

Financial results last quarter were “solid” but the outlook is “weaker than expected,” said Desjardins Securities analyst Benoit Poirier..

The fourth quarter — usually CAE’s strongest — saw net income drop to $318.9 million from $340.1 million a year earlier.

Revenue slipped four per cent year over year to $977.3 million from $1.02 billion, the company said.

Earnings per share hit 46 cents, matching last year’s figure and beating analyst expectations of 41 cents per share, according to financial markets data firm Refinitiv.

While revenue from CAE’s civil aviation training business remained fairly flat at $601.9 million, its defence and security segment managed a 12 per cent revenue boost to $341.8 million.

For the full year, CAE saw net income fall six per cent to $318.9 million while revenue rose 10 per cent to $3.62 billion.

This report by The Canadian Press was first published May 22, 2020.

Companies in this story: (TSX:CAE)

Christopher Reynolds, The Canadian Press

Business

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

COVID-19. (Image courtesy CDC)
Alberta reports 1,731 new COVID-19 cases on Saturday

The province’s central zone has 992 active cases

Collin Orthner, manager at McBain Camera in downtown Red Deer, stands behind the store’s counter on Saturday. (Photo by Sean McIntosh/Advocate staff)
A few Red Deer businesses happy with Black Friday results

While this year’s Black Friday wasn’t as successful as it was in… Continue reading

Le Chateau Inc. is the latest Canadian firm to start producing personal protective equipment for health care workers, in a July 3, 2020 story. (Photo by THE CANADIAN PRESS)
Hundreds of millions of dollars for frontline workers yet to be released, says Alberta Federation of Labour

Information recently released by the Alberta Federation of Labour suggests more than… Continue reading

Red Deer RCMP say a 30-year-old man faces sexual charges against a teen. (File photo by Advocate staff)
Man killed in two-vehicle collision near Penhold, says Blackfalds RCMP

A 46-year-old man is dead following a two-vehicle collision on Highway 42… Continue reading

Banff National Park. (The Canadian Press)
Study finds train speed a top factor in wildlife deaths in Banff, Yoho national parks

EDMONTON — A study looking at 646 wildlife deaths on railway tracks… Continue reading

Cows on pasture at the University of Vermont dairy farm eat hay Thursday, July 23, 2020, in Burlington, Vt. Canadian dairy farmers are demanding compensation from the government because of losses to their industry they say have been caused by a series of international trade deals. THE CANADIAN PRESS/AP-Lisa Rathke
Feds unveil more funding for dairy, poultry and egg farmers hurt by free trade deals

OTTAWA — Canadian egg and poultry farmers who’ve lost domestic market share… Continue reading

Chief Public Health Officer of Canada Dr. Theresa Tam speaks during a news conference on the COVID-19 pandemic in Ottawa, on Friday, Nov. 20, 2020. Canada's top doctor says the country is still on a troubling track for new COVID-19 infections as case counts continue mounting in much of the country. THE CANADIAN PRESS/Justin Tang
COVID-19 cases in Canada remain on troubling course, Tam says, amid rising numbers

Canada’s top doctor says the country is still on a troubling track… Continue reading

hay
Hay’s Daze: Giraffe knows filling wishes can sometimes be a tall order

Last weekend, I had a lovely breakfast. “So what?” you may say.… Continue reading

A person enters a building as snow falls in Ottawa, Sunday, Nov. 22, 2020. Ottawa has been successful in limiting the spread of COVID-19 during its second wave thanks to the city’s residents who have been wearing masks and staying home, said Ottawa’s medical officer of health Dr. Vera Etches. THE CANADIAN PRESS/Justin Tang
People to thank for Ottawa’s success with curbing COVID-19: health officer

The city’s chief medical officer said much of the credit goes to the people who live in Ottawa

NDP Leader Jagmeet Singh asks a question during question period in the House of Commons on Parliament Hill, in Ottawa, Thursday, Nov. 26, 2020. NDP Leader Jagmeet Singh says tonight's public video gaming session with Alexandria Ocasio-Cortez is about reaching young people where they hang. THE CANADIAN PRESS/Sean Kilpatrick
NDP leader stoked over ‘epic crossover’ in video gaming sesh with AOC

Singh and AOC discussed importance of universal pharmacare, political civility, a living wage

A south view of the Ward Hunt Ice Shelf breaking apart is seen from Ward Hunt Island, Nunavut, in an Aug. 20, 2011, handout photo. The remote area in the northern reach of the Nunavut Territory, has seen ice cover shrink from over 4 metres thick in the 1950s to complete loss, according to scientists, during recent years of record warming. Scientists are urging the federal government to permanently protect a vast stretch of Canada's remotest High Arctic called the Last Ice Area. THE CANADIAN PRESS/HO-CEN/Laval University, *MANDATORY CREDIT*
Scientists urge permanent protection of Last Ice Area in Canada’s High Arctic

Tuvaijuittuq has the thickest and oldest ice in the Arctic

In this file photo, a lotto Max ticket is shown in Toronto on Monday Feb. 26, 2018. (By THE CANADIAN PRESS)
No winning ticket for Friday night’s $55 million Lotto Max jackpot

No winning ticket was sold for the $55 million jackpot in Friday… Continue reading

Most Read