Heico (HEI) Posts 19% Earnings Increase, Guides Higher

Heico Corp. (NYSE: HEI) said Tuesday it generated a better-than-expected profit for the second quarter, and raised its fiscal 2010 guidance.

The aircraft component parts maker said it made a net profit for the quarter ended April 30 of $12.6 million, or 37 cents per share, up from a net profit of $10.5 million, or 31 cents per share, for last year�s equivalent quarter.

Revenue rose 18% to $153.9 million for the second quarter. Analysts polled by Thomson Reuters expected a profit of 34 cents (excluding special items) on revenue of $141.5 million.

Heico�s electronic technologies group quarterly sales soared 73% to $51.1 million, a company record, while operating profit grew 69%.

Thomson Reuters� mean analysts� estimates for the full year include a $1.46 per share profit on revenue of $583.36 million. Accounting for a recent 5-for-4 stock split, the estimate equates to an expected growth rate of between 9% and 11%.

�We continue to expect to see some strengthening in our commercial aviation markets during the second half of calendar 2010,� CEO Laurans Mendelson said in a statement. �However, the strength and exact timing of the recovery and resulting benefit to HEICO remains uncertain.�

Heico�s steady growth was interrupted last year due to weak airlines orders, which account for approximately two-thirds of total sales. In response, management cut jobs by nearly 9% during the slowdown.

Cash flow for the second quarter totaled $20.0 million, and the first six months of fiscal 2010 reached $40.3 million. Cash flow for the first six months of fiscal 2009 totaled $26.6 million.

For the first six months of fiscal 2010, capital expenditures fell to $4.6 million, compared with $5.4 million for the equivalent period last year.

As of April 30, net debt to equity ratio equates to 10.3%, with net debt of $53.8 million.

Gross margin increased to 34.9% from 32.7%.

Meaningful debt maturities won�t be due until fiscal 2013.

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