CAE corporate headquarters are shown in Montreal, Wednesday, August 10, 2016.  THE CANADIAN PRESS/Graham Hughes

CAE profits fall below expectations as pilots fail to flock back to flight simulators

MONTREAL — CAE Inc. enjoyed a big bump in revenue and profit last quarter, but fell short of expectations for both amid plummeting use of its signature flight simulators.

The Montreal-based company saw revenues jump by 16 per cent in the quarter ended Sept. 30 while earnings swung from a loss a year earlier to a $14-million profit.

Simulator utilization fell to 53 per cent of capacity due to lower demand for pilot training, though CAE said the key metric has begun to tick back up.

Chief executive Marc Parent said CAE aims to boost earnings by expanding its base of business and continuing to “play offence during this period of disruption.”

“While COVID-related impacts continue to affect all of our business units, we increasingly see a clearer path to recovery and a larger, more resilient, and more profitable CAE in the future.”

Parent pointed to last month’s announcement of CAE’s proposed acquisition of Texas-based Sabre’s AirCentre — the airline operations business includes software for carriers’ crew and flight management — for US$392.5 million. AirCentre marked CAE’s ninth would-be acquisition since the COVID-19 pandemic began in March 2020.

The flight simulator company said it earned a profit attributable to shareholders of $14 million or four cents per diluted share in its second quarter, compared with a loss of $5.2 million or two cents per diluted share a year earlier.

The figure fell far short of the net income of about $59 million expected by analysts, according to financial markets data firm Refinitiv.

Revenue last quarter totalled $814.9 million, up from $704.7 million but below the roughly $900 million that analysts, Refinitiv found. Civil aviation training revenue fell about one per cent to $362.1 million while defence and security revenues increased 38 per cent to $417.9 million.

On an adjusted basis, CAE said it earned 17 cents per share compared with an adjusted profit of 13 cents per share in the same quarter last year.

Analysts on average had expected CAE to report an adjusted profit of 20 cents per share, according to Refinitiv.

CAE shares lost $3.37 or 8.1 per cent at $38.33 in late morning trading on the Toronto Stock Exchange.