Newspaper article The Canadian Press

Heroux-Devtek Lowers Revenue Forecast for Year Due to Military Softness

Newspaper article The Canadian Press

Heroux-Devtek Lowers Revenue Forecast for Year Due to Military Softness

Article excerpt

Heroux-Devtek profit drops on division sale

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MONTREAL - Landing gear manufacturer Heroux-Devtek says a deterioration in military sales caused by budget problems in the United States means its overall sales will come in lower than its prior forecast for slight growth.

Although it expects commercial revenues will increase by 10 per cent, the company said a drop in U.S. military spending restrictions and government shutdown will offset those gains for the financial year ended March 31.

Heroux-Devtek posted $257 million in sales from continuing operations in its last financial year.

"The military spending cutback and the sequestration may also continue to affect sales beyond fiscal 2014," CEO Gilles Labbe said Friday during a conference call.

The trends forced Heroux-Devtek to announce this week the temporary layoff of some 40 workers at its plant in Longueuil, Que., which employs about 350 workers.

"Under these circumstances, we had to reduce staffing. We had no choice," he told analysts.

The Quebec-based company earned $2.6 million in its second quarter, a 2.3 per cent drop from last year not counting a large gain in the prior-year period from the sale of its aerostructure division.

Heroux-Devtek (TSX:HRX) earned eight cents per share from continuing operations for the period ended Sept. 30, one cent ahead of analyst expectations. That compared with a profit of $2.64 million, or nine cents per share, from continuing operations last year.

Including a large gain from the sale of the division, Heroux-Devtek earned $112.6 million or $3.64 per share last year.

Revenue from continuing operations fell to $56. …

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