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  5. CAE: Hi Team, any thoughts on why CAE is getting smashed today despite their earnings seeming positive? [CAE Inc.]
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Q: Hi Team, any thoughts on why CAE is getting smashed today despite their earnings seeming positive?
Asked by Marc on June 01, 2023
5i Research Answer:

Revenue in the quarter came in at $1.26 billion, up from $955 million in the same quarter of last year. On an adjusted basis, CAE earned $0.35 per diluted share compared to $0.17 per diluted share a year earlier. Analysts expected adjusted earnings per share of $0.34 per share. The increase came primarily from a rise in civil revenue. CAE reported adjusted EBITDA of $291 million and operating income of $202 million topping street estimates of $282 million and $189 million, respectively. Management reaffirmed its earnings per share guidance for 2022 through 2025 of mid-20%. The defense segment is expected to see weaker margins while the civil segment is positioned to benefit from long-term secular tailwinds. The lack of upward revision and lower visibility on margins is liking putting a pressure on shares.