27-Oct-2010 5:00 PM

B/E Aerospace soars on improving earnings outlook

Shares in B/E Aerospace, a leading manufacturer of aircraft cabin interior products and distributor of aerospace fasteners and consumables, surged 5.4% yesterday as investors welcomed the company’s 3Q2010 financial results and outlook.

Revenues of USD495.0 million increased 7.7%, while operating earnings rose 19.8% to USD83.4 million, producing an operating margin of 16.8%.

Chairman and CEO, Amin Khoury, stated the earnings growth was “driven by solid revenue growth and substantial margin expansion at both our consumables management segment (CMS) and our commercial aircraft segment (CAS). CMS revenues and operating earnings increased 6.7% and 20.9%, respectively, while CAS revenues and operating earnings increased 12.4% and 29.9%, respectively. Third quarter pretax earnings increased 32.0% year-over-year, free cash flow conversion ratio was 153% and our backlog grew for the fourth consecutive quarter."

Mr Khoury added, "Based on our record backlog, our expectation of continued growth in passenger travel and higher levels of wide-body aircraft deliveries beginning in 2011, we expect strong full-year 2011 earnings per diluted share growth of approximately 25 percent to approximately USD1.90 - USD1.95 per diluted share. Looking further ahead and taking into consideration our record backlog, the expected robust wide body delivery cycle beginning in 2011 and continued healthy demand growth for passenger travel, we expect continued strong growth in earnings per share for the next few years."

Elsewhere, Boeing eased 0.5% and EADS gained 0.9%.

Selected Original Equipment Manufacturers daily share price movements (% change): 26-Oct-2010

Selected Aviation Suppliers & Leasing daily share price movements (% change): 26-Oct-2010