BE Aerospace, Inc. Earnings: Five Quarters in a Row of Expanding Margins, Net Income Climbs

BE Aerospace, Inc. (NASDAQ:BEAV) reported net income above Wall Street’s expectations for the second quarter. 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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BE Aerospace Earnings Cheat Sheet for the Second Quarter

Results: Net income for BE Aerospace, Inc. rose to $54.8 million (54 cents per share) vs. $37.3 million (37 cents per share) in the same quarter a year earlier. This marks a rise of 46.9% from the year earlier quarter.

Revenue: Rose 25.8% to $608.9 million from the year earlier quarter.

Actual vs. Wall St. Expectations: BEAV beat the mean analyst estimate of 51 cents per share. Analysts were expecting revenue of $610.7 million.

Quoting Management: Commenting on the company’s recent performance, Amin J. Khoury, Chairman and Chief Executive Officer of B/E Aerospace said, “Our second quarter results included record quarterly bookings, up 45 percent, representing a book to bill ratio of 1.3 to one.In addition, revenues were up 26 percent, operating earnings were up 35 percent, earnings per share were up 46 percent and the free cash flow conversion ratio was in excess of 100 percent of net earnings.The record bookings performance was driven by strong orders for a broad range of aircraft interior equipment for both new-buy and aftermarket programs.The 120 basis point expansion in operating margin was driven by margin improvements in each of our three business segments.”

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 2.3 percentage points to 38.3% from the year earlier quarter. Over that span, margins have grown on average 1.5 percentage points per quarter on a year-over-year basis.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 3 cents in the first quarter, by 7 cents in the fourth quarter of the last fiscal year, and by one cent in the third quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 29.5% to $600.2 million in the first quarter. The figure rose 13% in the fourth quarter of the last fiscal year from the year earlier and climbed 7.7% in the third quarter of the last fiscal year from the year-ago quarter.

Net income has increased 22.1% year over year on average across the last five quarters. The biggest gain came in the first, when income climbed 48.8% from the year earlier quarter.

Competitors to Watch: TransDigm Group Inc. (NYSE:TDG), CPI Aerostructures, Inc. (AMEX:CVU), Astronics Corporation (NASDAQ:ATRO), Ducommun Incorporated (NYSE:DCO), Breeze-Eastern Corporation (AMEX:BZC), Goodrich Corporation (NYSE:GR), LMI Aerospace, Inc. (NASDAQ:LMIA), Boeing (NYSE:BA), and Spirit AeroSystems Hldgs., Inc. (NYSE:SPR).

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(Source: Xignite Financials)