MONTREAL — CAE Inc. shares dropped by as much as 14 per cent Wednesday after it reported first-quarter profits that fell below last year's earnings.
The shares dipped to a low of $30.73 but closed down $1.64 or 4.6 per cent to $34.17 on the Toronto Stock Exchange.
The flight simulator and training company provided fewer simulators and less training in its civil segment than last year, though CAE's $645-million purchase of Bombardier’s business aircraft training program in March more than made up the difference, boosting its civil profit margin before interest and tax to more than 21 per cent.
The grounding of the Boeing 737 Max in March wound up working to the company's advantage. Full-flight simulator deliveries were down year-over-year last quarter, but the company still secured nine orders, including four for the 737 Max.
CAE's backlog of $9.4 billion remained roughly flat compared with the preceding quarter.
The Montreal-based company raised its quarterly dividend to 11 cents per share, up from 10 cents.
The increased payment came as CAE reported a profit attributable to shareholders of $61.5 million or 23 cents per share. That compared with a profit of $69.4 million or 26 cents per share in the same quarter last year.
Revenue totalled $825.6 million, up from $722.0 million.
Excluding specific items, CAE said it earned 24 cents per share in its most recent quarter, down from 26 cents per share a year ago.
Analysts on average had expected a profit of 28 cents per share for the quarter, according to the financial markets data firm Refinitiv.
CAE reiterated its financial forecast for 2020, predicting operating income will grow about 20 per cent to $351 million in its civil segment and earnings before interest and tax will climb in the mid- to high-single-digit range for its defence business.
Companies in this story: (TSX:CAE)