CAE 2Q Profit Rises on Higher Defense Revenue; Eliminates Oper Chief Role

Dow Jones Newswires

By Kelly Cloonan

CAE recorded higher profit in its latest quarter, boosted by double-digit revenue growth in its defense and security segment.

The Canadian maker of flight simulation and training systems also said it plans to eliminate its chief operating officer role as part of a broader effort to simplify its structure and cut costs.

CAE posted a profit of 76.1 million Canadian dollars ($54.3 million), or C$0.23 a share, for the quarter, compared with C$54.8 million, or C$0.16 a share, a year earlier.

Adjusted earnings were C$0.23 a share. Analysts polled by FactSet had been expecting C$0.20 a share.

Revenue rose 9% to C$1.24 billion, above analyst projections for C$1.14 billion, according to FactSet.

Civil aviation revenue rose 5%, to $670 million, while its defense and security segment recorded a 14% gain, to $566.6 million.

As part of a broader restructuring, Chief Operating Officer Nick Leontidis will retire at the end of the calendar year and transition to special adviser to the company's chief executive.

CAE appointed Juan Araujo to a newly created role of senior vice president, operations, effective in January. Araujo will oversee the integration of several previously dispersed functional areas into a single, end-to-end products team to improve quality, cost and speed to market, the company said.

CAE also appointed Alexandre Prevost as president of civil aviation, consolidating the company's commercial and business aviation training businesses. Prevost was most recently division president, business aviation training.

The company similarly consolidated its defense business to two organizations, compared to three previously. Merrill Stoddard will continue to lead its U.S. defence business, while France Hebert will lead both its Canadian and international defence markets.

Chief Executive Matthew Bromberg said the company is working to cut costs, sharpen its portfolio and boost its performance.

"It is time to balance growth with asset and operational efficiency," Bromberg said.

Write to Kelly Cloonan at kelly.cloonan@wsj.com

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CAE 2Q Profit Rises on Higher Defense Revenue; Eliminates Oper Chief Role

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