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B/E Aerospace Q1 Results Top Estimates; Expects Growth Ahead

B/E Aerospace Inc. (BEAV), a manufacturer of aircraft cabin interior products, on Monday posted better-than-expected first quarter results, benefited by improved performance by all three of its segments. Looking ahead, the company, which also distributes aerospace fasteners and consumables, projects higher earnings and revenues for fiscal 2012 from last year on anticipated growth in demand, but below Wall Street estimates.

For its first quarter, net earnings climbed 36.8 percent to $68.8 million or $0.67 per share from prior year's $50.3 million or $0.49 per share. Adjusted net earnings, which excluded AIT costs, were $71.8 million or $0.70 per share, an increase of 43 percent from last year.

On average, 19 analysts polled by Thomson Reuters expected earnings of $0.62 per share for the quarter. Analysts' estimates typically exclude one-time items.

Quarterly revenues of $747.3 million increased 24.5 percent from the prior year's $600.2 million, whereas analysts estimated revenues of $702.06 million for the quarter.

The significant increase in revenues reflected a growth of 20.8 percent in Commercial aircraft segment, 24.3 percent growth in consumables management as well as a 45.2 percent increase in business jet revenues.

Pro forma revenue growth, giving effect to all 2011 and 2012 acquisitions as if they had occurred on January 1, 2011, was 16.9 percent.

For the quarter, operating earnings increased 29.7 percent and operating margin expanded by 70 basis points to 17.4 percent, driven by the higher sales volume, improved revenue mix and ongoing operational efficiency initiatives.

Chairman and Chief Executive Officer Amin Khoury said, "The substantial margin expansion was driven by our commercial aircraft and business jet segments which more than offset the margin drag from the consumables management segment acquisitions."

Bookings during the first quarter were approximately $850 million. Backlog at the end of the quarter grew 16 percent to $3.7 billion. Total backlog stands at $8.1 billion, an increase of 35 percent from the prior year.

The company added that its market share gains driven by successful R&D innovations, together with accretive strategic acquisitions and successful operational efficiency initiatives drove both earnings growth and backlog.

Looking ahead, for fiscal 2012, B/E Aerospace estimates earnings of around $2.75 per share and revenues of nearly $2.95 billion, while analysts project earnings of $2.79 per share on $2.98 billion revenue. The forecast represents a growth of approximately 23 percent in earnings and 18 percent increase in revenues from last year.

The forecast reflects the company's expectation for continued growth in global passenger travel, attendant increases in capacity and significantly higher levels of wide-body aircraft deliveries.

BE Aerospace anticipates continued strong orders in 2012 driven by the robust wide-body aircraft delivery outlook and solid aftermarket demand. In addition, the company expects continued growth in consumables demand driven primarily by the expected continuing growth in global passenger traffic and capacity.

BEAV closed Friday's regular trading session at $44.80, up $0.60 or 1.36 percent.

by RTT Staff Writer

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