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HEICO Corporation’s Revenue and Income Rose in Fiscal 4Q15

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Nov. 20 2020, Updated 1:30 p.m. ET

HEICO’s price movement

HEICO (HEI) has a market cap of $3.1 billion. After the company’s fiscal 4Q15 earnings report, HEI rose by 1.8% to close at $49.61 per share on December 15, 2015. HEI’s price movements on weekly, monthly, and YTD bases are -1.5%, 0.38%, and -17.8%, respectively.

Technically, the stock has broken the support and is trading below all moving day averages. Currently, HEI is trading 2.5% below its 20-day moving average, 1.9% below its 50-day moving average, and 9.6% below its 200-day moving average.

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The SPDR S&P Aerospace & Defense ETF (XAR) invests 2.8% of its holdings in HEICO (HEI). The ETF tracks an equal-weighted index of US aerospace and defense companies. The YTD price movement of XAR is -3.8%, as of December 14, 2015. The PowerShares Aerospace & Defense Portfolio (PPA) invests 1.3% of its holdings in HEI.

HEICO’s (HEI) competitors and their market caps are listed below:

  • United Technologies (UTX)—$82.7 billion
  • Honeywell International (HON)—$75.9 billion
  • Esterline Technologies Corporation (ESL)—$2.5 billion
  • Triumph Group (TGI)—$1.7 billion

HEICO’s performance in fiscal 4Q15 and fiscal 2015

HEICO (HEI) reported fiscal 4Q15 net sales of $328.7 million, a rise of 12.5% when compared to net sales of $292.2 million in fiscal 4Q14. Sales of its Flight Support Group and Electronic Technologies Group rose by 12.1% and 13.4%, respectively, in fiscal 4Q15, as compared to fiscal 4Q14. The company’s cost of sales as a percentage of net sales fell by 4.7%, and its operating margin rose by 16.7% in fiscal 4Q15, as compared to fiscal 4Q14.

Its net income and EPS (earnings per share) rose to $38.3 million and $0.56, respectively, in fiscal 4Q15, as compared to net income and EPS of $32.1 million and $0.48, respectively, in fiscal 4Q14.

On December 14, 2015, the company declared a regular semiannual cash dividend of $0.08 per share on its common stock.

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Fiscal 2015 results

In fiscal 2015, HEICO reported net sales of $1,188.6 million, a rise of 5.0% YoY (year-over-year). Sales of the Flight Support Group and Electronic Technologies Group rose by 6.1% and 3.1%, respectively, in fiscal 2015. The company’s operating income rose by 12.9%. Also, its net income and EPS rose to $133.4 million and $1.97, respectively, in fiscal 2015, as compared to net income and EPS of $121.3 million and $1.80, respectively, in fiscal 2014.

Meanwhile, the company’s cash and cash equivalents and inventories rose by 66.3% and 11.7%, respectively, in fiscal 2015. Its current ratio rose to 3.0, and its debt-to-equity ratio fell to 0.84 in fiscal 2015, as compared to its current ratio and debt-to-equity ratio of 2.8 and 0.87, respectively, in fiscal 2014.

According to Laurans A. Mendelson, HEICO’s chairman and CEO, “Our record fourth quarter and full fiscal year results reflect the impact of our profitable fiscal 2015 acquisitions, disciplined cost management, continued strong cash flows representing 130% of reported net income, and profitable organic growth within certain product lines of the Flight Support Group and Electronic Technologies Group.”

He went on to add, “Based on our current economic visibility, we are estimating year-over-year growth in both net sales and net income of approximately 8%–10% over fiscal 2015 levels with our consolidated operating margin approximating 18.5%. These estimates exclude additional acquired businesses, if any. Additionally, we anticipate depreciation and amortization expense of approximately 57 million, capital expenditures to approximate $30 million and cash flow from operations to approximate $200 million.”

Visit Market Realist’s Aerospace and Defense page for an in-depth fundamental analysis of the sector.

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