Heico Slips as FYQ3 EBITDA Trails Analyst Estimates

Heico (HEI:US) delivered a mixed set of results for its fiscal third quarter, causing its shares to fall more than 5% pre-market in a fragile market environment.

The company reported EBITDA of $179.8 million, lower than the consensus estimate of $181.2 million. Earnings per share for the quarter were $0.74, a year-on-year increase from $0.60, and closely aligned with the projected $0.73.

The company's net sales for the quarter were $722.9 million, marking a significant 27% year-on-year growth. This surpassed the estimated net sales of $697.7 million. 

Within its segments, the Flight Support Group recorded net sales of $405.0 million, slightly below the estimated $409.5 million, while the “Electronic Technologies Group” achieved net sales of $325.9 million, surpassing the estimated $299.1 million and fueling the top-line FQ3 outperformance.

Laurans A. Mendelson, HEICO's Chairman and CEO, commented on the Company's third-quarter results stating, "We are very pleased to report record quarterly consolidated net sales at both the Flight Support Group and the Electronic Technologies Group. These results reflect 12% consolidated organic growth in our net sales principally arising from a continued strong demand for our commercial aerospace products and services and the contributions from our fiscal 2023 and 2022 acquisitions.”

Heico's operating income was reported at $149.4 million, falling just below the estimated $152.9 million. 

Another reason for investor concerns is a drop in the operating margin to 20.7% from 22.6% YoY and easily below the estimate of 22.1%.

Earlier this month, Congressman Daniel Goldman reported the sale of some HEI shares that occurred in July. The stock was up 10.4% year-to-date through Monday’s close.