B/E Aerospace Reported their 4th Quarter results
on Thursday. The company’s 2012 results where the best in company history. The
year over year highlights are as follows: They had revenues of $3.085 billion, which was an increase of 23.4 percent.
Operating earnings were $540.0 million, an increase of 26.2 percent, and
operating margin of 17.5 percent, which increased 40 basis points. Net earnings
and earnings per diluted share were $291.3 million and $2.83 per share,
reflecting increases of 27.9 percent and 26.3 percent, respectively. The growth
in operating earnings and operating margin were a result of operating leverage
at the higher sales volume and ongoing operational efficiency initiatives.
Their revenue growth continues to be driven by the
robust new aircraft delivery cycle. Approximately 61 percent of fourth quarter
and full year 2012 revenues was driven by demand for products for new-buy
aircraft reflecting both robust new aircraft deliveries and weaker aftermarket
demand. During the conference call, the CEO discussed guidance for 2013, “Our
2013 guidance of approximately $3.45 per diluted share or a 22 percent earnings
per share growth is based primarily on our high quality backlog, the
expectation of strong wide-body deliveries, a modest recovery in the
aftermarket and significant continuing margin expansion.”
For 2013 the company expects continued
strong bookings in 2013 driven by the robust wide-body aircraft delivery outlook,
bookings from prior SFE awarded programs, and a modest recovery in aftermarket
demand, and expects to end the year with a book-to-bill ratio in excess of 1 to
1. 2013 revenues are expected to be approximately $3.35 billion, and, based on
scheduled program deliveries, are expected to be stronger in the second half of
the year.
On the day BEAV released
earnings, the stock closed up 2.5%. The investment thesis remains valid and the
stock has performed extremely well since inception gaining around 16%.
-John Astarita
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