B/E Aerospace Inc. (BEAV), a manufacturer of cabin interior products for commercial aircraft and business jets, Monday reported higher profit in its first quarter, above analysts' estimates, benefited by increased margin and higher revenues from all three segments. Quarterly revenues also topped Street estimates. Further, the company backed its fiscal 2013 earnings forecast.
Chairman and Chief Executive Officer Amin Khoury said, "Today we reported a strong start to 2013. Our first quarter 2013 results included record quarterly revenues, bookings, operating earnings, operating margin, net earnings, and EPS. Our revenue growth continues to be driven primarily by the robust new aircraft delivery cycle."
In its first quarter, net income increased 30.7 percent to $89.9 million from $68.8 million last year. Earnings per share grew 29.9 percent to $0.87 from prior year's $0.67.
On average, 19 analysts polled by Thomson Reuters expected the company to report profit of $0.80 per share for the quarter. Analysts' estimates typically exclude special items.
Operating earnings were $153.6 million, an increase of 18.3 percent from last year, and operating margin increased 80 basis points to 18.2 percent. The company attributed the growth primarily to operating leverage at the higher revenue level and ongoing operational efficiency initiatives.
Adjusted to exclude acquisition, integration and transition costs, operating earnings and operating margin were $157.7 million and 18.7 percent, respectively, for the latest quarter.
First-quarter revenues grew 12.7 percent to $842.2 million from last year's $747.3 million. Analysts expected revenue of $808.29 million for the quarter.
Approximately 61 percent of first-quarter revenues was driven by demand for products for new-buy aircraft reflecting both robust new aircraft deliveries and continued softness in aftermarket demand, the company said.
Segment-wise, revenues from commercial aircraft increased 12.1 percent. Consumables management segment's revenues increased 13.9 percent and that of business jet segment's revenues increased 11.3 percent.
Bookings during the first quarter were at approximately $845 million. Backlog as of March 31, was approximately $3.8 billion, and total backlog, both booked and awarded but unbooked, was approximately $8.3 billion.
Looking ahead for fiscal 2013, the company continues to expect earnings of approximately $3.45 per share, representing an increase of about 22 percent from last year's $2.83 per share. The guidance is inclusive of approximately $20 million of expected 2013 AIT costs, and is based upon the expectation of strong operating earnings growth driven by margin expansion in each of the company's three segments.
The company expects 2013 revenues of approximately $3.35 billion, and based on scheduled program deliveries, would be stronger in the second half of the year.
Analysts expect the company to report fiscal 2013 profit per share of $3.47 on revenue of $3.39 billion.
B/E Aerospace also expects continued strong bookings in 2013 driven by the robust wide-body aircraft delivery outlook, bookings from prior SFE awarded programs, and a modest recovery in aftermarket demand.
Khoury stated, "Our record total backlog, both booked and awarded but unbooked, of approximately $8.3 billion, our expectation for a 10 percent compound annual growth rate (CAGR) in wide-body aircraft deliveries over the next three years, our expectation of rapidly growing revenues from our supplier furnished equipment (SFE) program deliveries, the expectation for continued growth in global passenger travel, and the attendant increases in capacity all provide a foundation for an acceleration in revenue growth beginning in 2014 and the expectation of a double-digit revenue CAGR over the 2013-2015 time period."
B/E Aerospace shares closed Friday's trading at $58.88, up $1.23 or 2.13 percent.
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