Flight simulator maker and pilot trainer CAE raises earnings forecast

Résumé détaillé

Company is more than halfway through transformation plan that includes revamping civil training network to reduce costs, CEO says

CAE Inc. CAE-T hiked its earnings forecast for the year as chief executive Matthew Bromberg reaps early rewards from an effort to sharpen operations and shift resources toward core priorities after a lengthy expansion.

The Montreal-based company, which trains military and commercial pilots and builds simulators, said in an earnings report late Wednesday that it expects adjusted earnings per share of between $1.28 and $1.35 for the fiscal year ending March 31, 2027. That’s up from a previous forecast of $1.21 to $1.28.

CAE also boosted its outlook for adjusted segment operating income margins for the year. Forecasts for revenue and cash conversion rate were unchanged.

“Eighteen months into the role, I’m often asked if I can see the change occurring in the organization and the answer is yes,” Mr. Bromberg told analysts on a call to discuss the results Thursday. “We’re becoming more focused on our end markets. We’re becoming more focused on profitable growth and more focused on cash flow generation. And the results are starting to be clear.”

Mr. Bromberg, a former submarine commander in the U.S. Navy who also worked at defence giant Northrop Grumman Corp., took over last year from long-time CEO Marc Parent. He’s now working to boost profits and cash flows after a 15-year expansion left the company on solid footing but unable to generate high returns from some of its assets.

Browning West, a major CAE investor, has said Mr. Bromberg should be able to double the company’s earnings per share over the next three to four years. The CEO said Thursday he’s more than halfway through key milestones on a transformation plan that includes revamping the civil training network to reduce infrastructure and real-estate costs, and selling non-core assets.

CAE announced last month it struck a deal to sell its Flightscape aviation software business to Geneva-based technology firm SITA for US$500-million including debt. Mr.

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