Heroux-Devtek says 2014 revenue will be lower than last year due to military

LONGUEUIL, Que. - Aerospace manufacturer Heroux-Devtek Inc. (TSX:HRX) reports it had $2.6 million of net income in its fiscal third quarter and slightly lower revenue from its continuing operations.

The Quebec-based maker of landing gear for commercial and military aircraft had $61.45 million of revenue, down from $61.7 million a year earlier from comparable operations.

It also said full-year revenues for its 2014 financial year, excluding the impact of a recent acquisition, will be lower than its 2013 financial year but its overall profitability will improve.

"Heroux-Devtek generated a higher operating profitability during the third quarter as a result of a more favourable product mix compared with last year," president and CEO Gilles Labbe said Friday.

"As witnessed since the beginning of the current fiscal year, the strength of the large commercial aircraft market continues to be the main revenue driver, while the military aerospace market remains affected by U.S. budgetary constraints."

The Montreal-area company sold off its aerospace structures division, which accounted for about half of its business operations, in 2012 to focus on landing gear manufacturing and maintenance.

Heroux-Devtek's profit for the three months ended Dec. 31 amounted to eight cents per share of net income — a penny short of analyst estimates.

A year earlier, Heroux-Devtek had 14 cents per share of net income overall, but only 10 cents per share from its continuing operations.

In January, after the quarter ended, Heroux-Devek announced it will lay off about 55 employees at one of its Montreal-area plants due to lower demand from the U.S. military market.

The layoffs are expected to start in April and take place over 12 months, leaving 15 workers at the plant in nearby Longueuil, where the company has its head office and main base.

Last week, the company announced its first major acquisition since selling its aerostructure business, purchasing British landing-gear APPH Ltd. for $128 million.

The company warned in November that its revenue growth in the current year would be lower than a previous forecast.

Its third-quarter financial report issued Friday before a conference call didn't provide specific revenue guidance.