CAE raises earnings outlook after quarterly revenue falls

The Tip Desk · November 12, 2026 · 3 min read

The company’s fiscal second-quarter earnings fell to C$0.18 a share from C$0.23 a year earlier.

The aviation training and defense company CAE Inc. (CAE) reported that fiscal second-quarter revenue fell 2.6% to C$1.2 billion from C$1.24 billion a year earlier. It raised its full-year adjusted earnings outlook after adjusted earnings increased to C$0.33 a share from C$0.28 in the quarter ended September 30, 2026.

Reported operating income fell to C$114 million from C$155 million. The results included C$42.6 million in restructuring, integration and acquisition costs, compared with none a year earlier. Net income fell to C$60.7 million from C$76.1 million. Net finance expense and income tax expense both declined.

CAE revised its adjusted measures in the first quarter of fiscal 2027 to exclude amortization of acquisition-related intangible assets from adjusted net income and adjusted segment operating income. Comparative figures were adjusted to conform. Adjusted segment operating income also excludes restructuring, integration and acquisition costs, among other items.

In Civil, CAE said strong business aviation performance and higher year-over-year utilization across commercial and business aviation training were offset by a lower contribution from products. Defense posted double-digit growth in adjusted segment operating income, with continued expansion in underlying margins, the company said.

CAE now expects fiscal 2027 adjusted earnings of C$1.28 to C$1.35 a share, up from its previous range of C$1.21 to C$1.28. The company said the increase reflected a stronger operating outlook, lower expected finance expense and a lower effective tax rate.

The adjusted segment operating income margin is expected to be 14.9% to 15.4%, compared with the previous forecast of 14.6% to 15.1%. CAE attributed the increase to higher expected margins in both Civil and Defense and increased confidence in its ability to execute its second-half plan.

The company maintained its forecast for low-single-digit consolidated revenue growth. Civil revenue is expected to be flat to slightly down, and Defense revenue is expected to grow at a mid-single-digit rate. For the first half of fiscal 2027, consolidated revenue rose to C$2.38 billion from C$2.34 billion.

Quarterly free cash flow rose to C$179.9 million from C$109.8 million, mainly because of lower capital expenditures, CAE said. Capital spending fell to C$48.9 million from C$107.6 million, and net cash provided by operating activities was C$215.5 million, compared with C$214.0 million a year earlier.

Net debt declined to C$2.53 billion at the end of the quarter from C$2.65 billion at the end of the preceding quarter. CAE’s net debt-to-adjusted EBITDA ratio fell to 2.16 times from 2.27 times. The company repurchased about 3 million shares for C$106 million in the first half of the fiscal year.

CAE also agreed in October to sell Flightscape to SITA for US$500 million. The transaction is expected to close in the first half of calendar 2027, and the company intends to use the proceeds to fund its transformation, support growth in core businesses and return capital to shareholders.