The US based aerospace & defense sector giant, HEICO (HEI.US) released stronger than anticipated results for Q1 2025, as revenues came up almost 15% YoY reaching $1.10 billion milestone, while EPS came in 8% above Wall Street consensus. Shares of HEICO are up more than 6% today. Previously also other companies from the aerospace & defense sector, such as Curtiss Wright, reported strong earnings momentum, attracting new investors.
HEICO drivers
Heico is driven not only by strong services and parts demand from commercial airlines but also from strong Pentagon and space segment demand. The company has almost 100% supply chains located across the US market. The important future catalyst may come from larger demand from the military sector fueled by DOGE initiative, as Heico remains a cheaper critical parts and services provider than GE and other 'old' US Army suppliers. The company sales critical electronic equipment and services at higher margins than parts and services for commercial companies.
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Create account Try a demo Download mobile app Download mobile appHEICO Q1 2025 earnings
Revenue: $1.10 billion vs analyst estimates of $1.06 billion (14.9% year-on-year growth, 3.5% beat)
EPS (GAAP): $1.12 vs analyst estimates of $1.04 (8.1% beat)
- Adjusted EBITDA: $297.7 million vs analyst estimates of $281.1 million (27.1% margin, 5.9% beat)
- Operating Margin: 22.6%, in line with the same quarter last year
- Free Cash Flow Margin: 17.2%, up from 13.4% in the same quarter last year
The company’s Flight Support Group (products for military sector) led the growth, with net sales rising 19% to a record $767.1 million, fueled by a 14% organic growth across all product lines. The Electronic Technologies Group performed well, with net sales increasing 7% to $342.2 million, driven by strong demand for space and aerospace products.
The Mendelsohn family (the company executives) commented the report: "We are very pleased to report record quarterly operating income and net sales, driven primarily by double-digit consolidated organic net sales growth. This performance mainly reflects strong organic net sales growth across all product lines of the Flight Support Group and double-digit organic net sales growth for the Electronic Technologies Group's space and aerospace products.
Heico (D1 interval)
Heico shares rebounded almost 35% from April lows.
Source: xStation5
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