B/E Aerospace Earnings: Profit Streak Snapped Despite Double-Digit Revenue Growth

B/E Aerospace Inc. (NASDAQ:BEAV) reported a lower net income in the third quarter compared with a year earlier, falling below analysts’ estimates. BE Aerospace is a manufacturer of cabin interior products for commercial aircraft and business jets and a distributor of aerospace fasteners and consumables.

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B/E Aerospace Inc. Earnings Cheat Sheet

Results: Net income for B/E Aerospace Inc. fell to $18.5 million (18 cents per share) vs. $65.4 million (64 cents per share) a year earlier. This is a decline of 71.7% from the year-earlier quarter.

Revenue: Rose 20.6% to $766.7 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: B/E Aerospace Inc. fell short of the mean analyst estimate of 68 cents per share. It beat the average revenue estimate of $749.8 million.

Quoting Management: “For 2013, we are expecting top line growth of approximately 10 percent driven primarily by the demand for our products for new-buy aircraft. Our initial 2013 guidance of approximately 10 percent revenue growth and approximately 20 percent earnings per share growth is based primarily on our high quality backlog and the expectation of strong wide-body deliveries that are expected to continue for the next several years. We believe we are well positioned to generate double-digit revenue growth for the next several years, based on our total backlog of $8.25 billion, both booked and awarded but unbooked, rapidly growing revenues from our supplier furnished equipment program deliveries, our expectation for a 14 percent CAGR in wide-body aircraft deliveries over the next three years, the expectation for continued growth in global passenger travel, and the attendant increases in capacity.”

Key Stats:

For the past five quarters, the company has seen double-digit year-over-year percentage revenue growth. Over that span, the company has averaged growth of 24.1%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose 28.5% from the year earlier quarter.

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the second quarter, net income rose 29.9% from the year earlier, while the figure increased 36.8% in the first quarter, 83.7% in the fourth quarter of the last fiscal year and 59.5% in the third quarter of the last fiscal year.

The company fell short of forecasts after beating estimates in the previous two quarters. In the second quarter, it topped the mark by 8 cents, and in the first quarter, it was ahead by 4 cents.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 72 cents a share to 71 cents over the last ninety days. For the fiscal year, the average estimate has moved up from $2.79 a share to $2.81 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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