Quebec landing gear maker Héroux-Devtek reported better-than-expected first-quarter results as its supply chain struggles ease.
“The fiscal year is on a good track thanks to our efforts to stabilize our production system,” President and CEO Martin Brassard said at the virtual shareholder meeting on Tuesday.
While consumers have seen an improvement in the supply chain at retailers, the situation remains difficult in the aerospace industry.
Over the past few quarters, Héroux-Devtek has reported business disruptions for a variety of reasons, including supply chain strains, rising costs, difficulties recruiting staff and absences related to COVID-19 .
The Montreal company announced a profit of 4 million in the first quarter ended June 30, compared to 1 million in the same period last year. Diluted earnings per share were 12 cents. Revenues, for their part, increased by 23.3% to 140.7 million.
Prior to the earnings release, analysts had expected earnings per share of 10 cents and revenue of 138.8 million, according to financial data firm Refinitiv.
TD Securities analyst Tim James points out that the gross margin is improving, from 11% to 14.3%. “We believe this reflects management regaining the upper hand on supply chain and recruiting challenges, while enjoying a good mix of growing programs. »
Cash flow, however, was below expectations, with a cash loss of 20.5 million compared to positive cash flow of 4.5 million in the same period last year.
The variation is explained by accounting items, but also by an increase in inventories as the manufacturer builds up its reserves to deal with supply chain disruptions.
The company’s inventory was worth 287 million as of June 30, compared with 263 million three months earlier and 217 million at the same time last year.
Héroux-Devtek shares gained 33 cents, or 2.13%, to $15.85 on the Toronto Stock Exchange in the morning.
