CAE raises full-year outlook as Q2 earnings top estimates

Montreal-based CAE Inc. (NASDAQ:CAE) (TSX:CAE) boosted its full-year 2027 adjusted EPS outlook to a range of $1.28 to $1.35, up from its previous $1.21 to $1.28 estimate. The company also lifted its adjusted segment operating income margin guidance to 14.9% to 15.4% from 14.6% to 15.1%. Despite a Q2 $1.2 billion revenue miss, falling 2.6% YoY, CAE reported improved adjusted profitability, strong free cash flow, and steady progress on its transformation priorities.

CEO Matthew Bromberg attributed the performance to solid Q2 results, including $179.3 million adjusted segment operating income and $179.9 million in free cash flow, a 63.8% year-over-year increase, owing to lower capital expenditures. The Defense segment saw a 43.3% YoY increase in adjusted segment operating income, driven by higher profitability on products and North American contracts, while the Civil Aviation segment experienced a decline in adjusted segment operating income due to reduced simulator sales.

CAE repurchased 1.9 million shares at $67.1 million during the quarter, with 3.0 million shares purchased year-to-date at $106.1 million. The company also announced a $500 million sale of Flightscape to SITA, expected to close in the first half of 2027.