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Cubic Corp Q2 Loss Widens; Stock Down

Cubic Corp. (CUB) reported that its net loss from continuing operations attributable to Cubic for the second quarter of fiscal 2020 widened to $39.3 million, or $1.25 per share, from $8.1 million or $0.26 per share in the second quarter of fiscal 2019, primarily reflecting an increase in operating loss and interest expense as well as a $16.1 million loss on extinguishment of debt.

CUB closed Wednesday regular trading at $33.98, down $3.02 or 8.16 percent.

Operating loss in the second quarter of fiscal 2020 was $29.9 million, compared to $6.5 million in the second quarter of fiscal 2019. The increase in operating loss was largely driven by Mission Solutions due to lower sales of high margin products.

Adjusted net loss was $3.9 million, or $0.12 per share, in the second quarter of fiscal 2020, compared to Adjusted net income of $7.6 million, or $0.24 per share, in the second quarter of fiscal 2019, reflecting lower Adjusted EBITDA and higher interest and depreciation expense, partially offset by tax benefits.

Sales for the second quarter of fiscal 2020 decreased 5% as reported and 4% on an organic basis to $321.5 million, compared to $337.3 million in the second quarter of fiscal 2019, reflecting growth in Global Defense Systems, offset by a decline in Mission Solutions while Transportation Systems organic sales were flat.

Analysts polled by Thomson Reuters expected the company to report a loss of $0.11 per share and revenues of $342.23 million for the quarter. Analysts' estimates typically exclude special items.

The company has suspended full year guidance for fiscal 2020, due to the uncertainty surrounding the COVID-19 pandemic.

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