CAE Maintains Fiscal 2027 Outlook as Revenue Rises 6.8%
The training and simulation provider reported first quarter revenue of $1,173.4 million, though operating income fell 35.1% year-over-year.
CAE Inc. (CAE), the training and simulation provider, reported first quarter fiscal 2027 revenue of $1,173.4 million, a 6.8% increase from the $1,098.6 million recorded in the prior year. Despite the top-line growth, operating income fell 35.1% to $86.8 million, compared to $133.8 million in the same period last year.
Earnings per share for the quarter was $0.10, down from $0.18 in the prior year. Adjusted EPS remained flat at $0.26 a share. The company reported that operating income for the period included $48.3 million in restructuring costs.
Performance diverged across the company's primary segments. The Defense and Security segment saw revenue rise 8.3% to $531.8 million. Adjusted segment operating income for Defense grew 9.1% to $50.5 million, which the company attributed to higher activity and profitability on North American contracts and the completion of key program milestones.
In the Civil Aviation segment, revenue rose 5.6% to $641.6 million. However, adjusted segment operating income for Civil fell 13.7% to $106.1 million. The company said profitability in the Civil segment was impacted by higher costs, a lower contribution from Civil products, and effects from the Middle East conflict.
Cash flow showed a significant trajectory shift. Free cash flow was $104.0 million for the quarter, compared to a loss of $134.7 million in the first quarter of the previous year. Net cash provided by operating activities reached $175.1 million, reversing a $15.3 million outflow from the prior year.
CAE is currently executing a transformation plan with a target of $125 million to $150 million in annual run-rate savings by fiscal 2030. As part of this effort, the company is rationalizing its Civil training network, which involves closing between four and six training centers to reduce global square footage and improve labor productivity.
The company said it is progressing with a review of strategic alternatives for Flightscape. CAE maintained its unchanged fiscal 2027 outlook.