Investors might want to bet on Heico Corporation (HEI) , as it has been recently upgraded to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.Since a changin ...

Institutional Investing Overview - Institutional investing serves as a key indicator for retail investors to assess market sentiment regarding specific stocks or assets, with hedge funds and advisors employing teams of analysts for research [1] - Retail investors can leverage institutional buying trends to identify potential investment opportunities by monitoring which shares are being purchased consistently [1] HEICO Corporation - HEICO has experienced a significant increase in institutional buying, with purchases reaching $1 billion in Q4 2025, indicating strong confidence in its long-term value [2] - The stock price of HEICO has risen by 13% since the end of the previous business period, and analysts have a Moderate Buy consensus rating with a predicted upside of 3.61% in the coming year [3] Occidental Petroleum (OXY) - Occidental Petroleum has seen a decline in share prices, down 26% year-over-year, with a recent 8% drop attributed to analyst downgrades [5] - Despite the downturn, institutional investors purchased $1.69 billion in OXY shares in Q4, a significant increase from $659 million in Q3, with a consensus price estimate predicting over 31% potential upside [6] Merck & Co., Inc. - Merck has seen institutional purchases rise to $13 billion in Q4, up from $4.65 billion in Q3, indicating strong interest despite trading near its 52-week low [9] - The stock offers a competitive dividend yield of 3.48% and has a history of increasing its annual dividend for the last 14 years, making it an attractive option for dividend investors [9] Prudential Financial (PRU) - Prudential Financial has seen institutional buying increase to $1.17 billion in Q4 from $486 million in Q3, despite a recent earnings estimate miss leading to a 12% dip in share prices [11] - The stock currently has a P/E ratio of 14.71 and a dividend yield of 4.91%, suggesting it may present a buying opportunity for investors with a higher risk tolerance [11]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______ Commission File Number: 001-04604 HEICO CORPORATION (Exact name of registrant as specified in its charter) Florida 65-0341002 (State or other jurisdi ...

Financial Data and Key Metrics Changes - Consolidated operating income and net sales in Q1 fiscal 2025 increased by 26% and 15% respectively compared to Q1 fiscal 2024, with record net income rising 46% to $168 million or $1.20 per diluted share [10][12][13] - Cash flow from operating activities surged 82% to $203 million in Q1 fiscal 2025, up from $111.7 million in Q1 fiscal 2024 [12] - Consolidated EBITDA increased 22% to $273.9 million in Q1 fiscal 2025, compared to $224.4 million in Q1 fiscal 2024 [13] Business Line Data and Key Metrics Changes - Flight Support Group achieved record net sales of $713.2 million in Q1 fiscal 2025, a 15% increase from $618.7 million in Q1 fiscal 2024, driven by 13% organic growth [11][18] - Electronic Technologies Group's net sales rose 16% to $330.3 million in Q1 fiscal 2025, reflecting strong 11% organic growth [27][28] - Flight Support Group's operating income increased 22% to $166.1 million, while Electronic Technologies Group's operating income rose 38% to $76.5 million [23][28] Market Data and Key Metrics Changes - The defense, space, and aerospace product deliveries contributed to the strong organic sales growth in both business segments [11][27] - The Electronic Technologies Group's backlog reached the highest ever quarter-end amount, indicating strong future demand [27] Company Strategy and Development Direction - The company is strategically focused on key markets such as defense, space, and commercial aviation, aiming to capitalize on new opportunities and sustain momentum across diverse industries [9][32] - The company continues to seek complementary acquisitions that align with its strategic and financial goals, with several key acquisitions completed in Q1 fiscal 2025 [14][15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current U.S. administration's pro-business agenda, which aligns with the company's long-term goals [9] - The company anticipates continued net sales growth in both divisions, driven by strong organic growth and increased demand for products [32] Other Important Information - The company paid a regular semiannual cash dividend of $0.11 per share, marking its 93rd consecutive semiannual cash dividend since 1979 [14] - The net debt-to-EBITDA ratio was 2.08 times as of January 31, 2025, compared to 2.06 times as of October 31, 2024 [13] Q&A Session Summary Question: Flight Support Group's sales growth drivers - The growth is primarily from deeper market penetration with existing customers rather than new customer expansion [38] Question: Future margin expectations - Management is cautious about predicting higher margins but acknowledges a trend of gradual improvement over the years [45][47] Question: Margin expansion in both segments - The Electronic Technologies Group aims for EBITDA margins in the 26% to 28% range, while the Flight Support Group's margins are expected to remain competitive [52][53] Question: Pricing strategy and market share - The company has not significantly increased prices, focusing instead on covering cost increases while maintaining customer satisfaction [76][78] Question: Defense market opportunities - Management sees potential in missile defense programs and cost-saving solutions for customers, although significant revenue may not materialize until later years [115][122] Question: Supply chain performance - Supply chain issues have improved, but some areas still face challenges, impacting sales potential [102][105]

Financial Data and Key Metrics Changes - Consolidated operating income and net sales in Q1 2025 increased by 26% and 15% respectively compared to Q1 2024, reaching record levels [10] - Consolidated net income rose 46% to a record $168 million or $1.20 per diluted share, up from $114.7 million or $0.82 per diluted share in Q1 2024 [10] - Cash flow from operating activities increased by 82% to $203 million in Q1 2025, compared to $111.7 million in Q1 2024 [12] - Consolidated EBITDA increased by 22% to $273.9 million in Q1 2025, up from $224.4 million in Q1 2024 [13] Business Line Data and Key Metrics Changes - Flight Support Group (FSG) achieved record operating income and net sales, increasing by 22% and 15% respectively over Q1 2024, with net sales reaching $713.2 million [11][18] - Electronic Technologies Group (ETG) saw operating income and net sales improve by 38% and 16% respectively, with net sales reaching $330.3 million [27][28] Market Data and Key Metrics Changes - The FSG's organic net sales growth was 13%, driven by increased demand for aftermarket replacement parts and repair services [11][18] - The ETG's organic net sales growth was 11%, primarily due to increased deliveries in defense, space, and aerospace products [27] Company Strategy and Development Direction - The company is strategically focused on key markets such as defense, space, and commercial aviation, positioning itself to capitalize on new opportunities [9] - The company continues to seek complementary acquisitions that align with its strategic and financial goals, maintaining a disciplined approach to M&A [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business environment, citing a pro-business agenda from the current U.S. administration that aligns with the company's long-term goals [9] - The company anticipates continued net sales growth in both FSG and ETG divisions, driven by strong organic growth and increased demand for products [32] Other Important Information - The company completed several key acquisitions in Q1 2025, including a 90% interest in Millennium International, enhancing its avionics repair capabilities [15][16] - The company paid its regular semiannual cash dividend of $0.11 per share, marking its 93rd consecutive semiannual cash dividend since 1979 [14] Q&A Session Summary Question: Flight Support Group's sales growth drivers - Most growth is attributed to expansion with existing customers, indicating deeper market penetration [38] Question: Future margin expectations - Management is cautious about predicting higher margins but acknowledges a trend of gradual improvement over the years [45][47] Question: Margin expansion in both segments - ETG aims for EBITDA margins in the 26% to 28% range, while FSG's margins are expected to remain strong due to operational efficiencies [52][53] Question: Pricing strategy and its impact on margins - The company has not significantly increased prices, focusing instead on covering cost increases while maintaining customer satisfaction [76][78] Question: Defense market opportunities - Management sees potential in missile defense programs and cost-saving solutions for customers, although significant revenue may not materialize until later years [120][121] Question: Supply chain performance - Supply chain issues have improved, but some challenges remain, particularly with labor shortages affecting supplier performance [102][105]

Core Insights - Heico Corporation reported revenue of $1.03 billion for the quarter ended January 2025, marking a year-over-year increase of 14.9% and exceeding the Zacks Consensus Estimate by 6.07% [1] - The company's EPS for the same period was $1.20, a significant increase from $0.82 a year ago, resulting in an EPS surprise of 29.03% compared to the consensus estimate of $0.93 [1] Financial Performance - Net Sales for the Electronic Technologies Group (ETG) reached $330.32 million, surpassing the average estimate of $290.78 million, with a year-over-year change of +15.5% [4] - Net Sales for the Flight Support Group (FSG) were $713.17 million, exceeding the average estimate of $684.77 million, reflecting a year-over-year change of +15.3% [4] - The Corporate & Intersegment segment reported net sales of -$13.27 million, slightly below the average estimate of -$13.01 million, but showing a year-over-year change of +59.9% [4] Operating Income - Operating income for the Flight Support Group was $166.12 million, above the average estimate of $150.17 million [4] - Operating income for the Electronic Technologies Group was $76.46 million, exceeding the average estimate of $68.65 million [4] - The Other segment, primarily corporate, reported an operating income of -$15.77 million, which was worse than the average estimate of -$13.27 million [4] Stock Performance - Heico's shares have returned -3.1% over the past month, compared to a -2.3% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Heico Corporation reported strong quarterly earnings, significantly surpassing consensus estimates, indicating robust financial performance and potential for future growth [1][2]. Financial Performance - Heico's quarterly earnings were $1.20 per share, exceeding the Zacks Consensus Estimate of $0.93 per share, and up from $0.82 per share a year ago, representing a 46.34% year-over-year increase [1]. - The company achieved revenues of $1.03 billion for the quarter, surpassing the Zacks Consensus Estimate by 6.07% and showing a year-over-year increase from $896.36 million [2]. Earnings Surprises - Heico has consistently outperformed consensus EPS estimates over the last four quarters, achieving earnings surprises of 29.03% in the latest quarter and 2.06% in the previous quarter [1][2]. Market Performance - Despite strong earnings, Heico shares have declined approximately 4.2% since the beginning of the year, contrasting with the S&P 500's gain of 1.3% [3]. Future Outlook - The company's earnings outlook is mixed, with current consensus EPS estimates of $1.04 for the upcoming quarter and $4.20 for the current fiscal year [7]. - The Zacks Industry Rank places Aerospace - Defense Equipment in the top 29% of over 250 Zacks industries, suggesting a favorable industry outlook that could positively impact Heico's stock performance [8].

Financial Performance - HEICO Corporation reported a record net income of $168.0 million, a 46% increase from $114.7 million in Q1 2024, translating to $1.20 per diluted share[1][2]. - Net sales reached a record $1,030.2 million, up 15% from $896.4 million in Q1 2024, with an operating income increase of 26% to $226.8 million[2][3]. - The consolidated operating margin improved to 22.0%, up from 20.1% in the same quarter last year[2]. - For the first quarter of fiscal 2025, HEICO reported a net income of $181.6 million, an increase of 44.8% compared to $125.5 million in the same period of fiscal 2024[32]. - HEICO's EBITDA for the three months ended January 31, 2025, was $273.9 million, a 22.1% increase from $224.4 million in the same period of 2024[34]. Cash Flow and Assets - Cash flow from operating activities surged 82% to $203.0 million, compared to $111.7 million in Q1 2024[6]. - The company’s net cash provided by operating activities was $203.0 million, significantly higher than $111.7 million in the prior year[32]. - Total assets increased to $7.89 billion as of January 31, 2025, up from $7.59 billion as of October 31, 2024, reflecting a growth of 3.9%[31]. - Cash and cash equivalents at the end of the period were $165.5 million, slightly up from $162.1 million at the beginning of the year[32]. - The company reported an increase in inventories to $1.22 billion, up from $1.17 billion, indicating a rise of 3.5%[31]. - HEICO's total current liabilities decreased to $618.3 million from $663.9 million, a reduction of 6.8%[31]. Debt and Financial Strategy - HEICO executed acquisitions totaling approximately $255 million during the quarter, without significantly increasing leverage[7]. - The total debt to net income ratio decreased to 4.15x as of January 31, 2025, down from 4.34x as of October 31, 2024[8]. - HEICO's total debt as of January 31, 2025, was $2.35 billion, with a net debt of $2.19 billion after accounting for cash and cash equivalents[34]. - The company maintains a disciplined financial strategy focused on maximizing long-term shareholder value through strategic acquisitions and organic growth initiatives[9]. Sales Growth and Market Demand - The Flight Support Group's net sales increased 15% to $713.2 million, with a 13% organic growth driven by aftermarket replacement parts[11][10]. - The Electronic Technologies Group's net sales rose 16% to $330.3 million, reflecting strong demand for defense, space, and aerospace products[15][14]. - HEICO anticipates continued net sales growth in fiscal 2025, driven by strong organic demand and recent acquisitions[9]. Tax Benefits - The company recognized a discrete tax benefit of $27.2 million from stock option exercises, increasing net income attributable to HEICO by $26.5 million, or $0.19 per share[30]. Acquisitions - The company made acquisitions totaling $254.8 million during the quarter, significantly higher than $46.2 million in the same period last year[32].

Core Insights - Heico Corporation (HEI) is expected to report quarterly earnings of $0.93 per share, reflecting a 13.4% increase year-over-year, with revenues forecasted at $970.82 million, representing an 8.3% increase [1] Earnings Estimates - The consensus EPS estimate for the quarter has remained unchanged over the past 30 days, indicating analysts have not revised their projections [2] - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock performance [3] Revenue and Sales Projections - Analysts predict 'Net Sales- Electronic Technologies Group (ETG)' will be $290.78 million, showing a year-over-year increase of 1.7% [5] - The consensus estimate for 'Net Sales- Flight Support Group (FSG)' is $684.77 million, indicating a year-over-year increase of 10.7% [5] Operating Income Forecasts - 'Operating income- Flight Support Group' is expected to reach $150.17 million, up from $136.09 million in the same quarter last year [6] - 'Operating income- Electronic Technologies Group' is projected at $68.65 million, compared to $55.33 million a year ago [6] Stock Performance - Heico shares have returned -5.5% over the past month, contrasting with the Zacks S&P 500 composite's +2.2% change, and the company holds a Zacks Rank 3 (Hold), suggesting it will likely mirror overall market performance in the near future [6]

Financial Data and Key Metrics Changes - Consolidated operating income and net sales in Q4 fiscal '24 increased by 15% and 8% respectively compared to Q4 fiscal '23 [9] - Consolidated net income rose 35% to a record $139.7 million, or $0.99 per diluted share, up from $103.4 million, or $0.74 per diluted share in Q4 fiscal '23 [9] - Consolidated EBITDA increased 13% to $264 million in Q4 fiscal '24, up from $234.2 million in Q4 fiscal '23 [10] - Cash flow from operating activities increased 39% to $205.6 million in Q4 fiscal '24, up from $148.4 million in Q4 fiscal '23 [11] - Net debt to EBITDA ratio improved to 2.06 times as of October 31, '24, down from 3.04 times as of October 31, '23 [10] Business Line Data and Key Metrics Changes - The Flight Support Group achieved record net sales of $691.8 million in Q4 fiscal '24, a 15% increase from $601.7 million in Q4 fiscal '23, driven by 12% organic growth and acquisitions [15] - Operating income for the Flight Support Group increased 35% to $154.5 million in Q4 fiscal '24, up from $114.6 million in Q4 fiscal '23 [21] - The Electronic Technologies Group's net sales were $336.2 million in Q4 fiscal '24, down from $342.5 million in Q4 fiscal '23, primarily due to lower defense and electronics sales [24][25] - Operating income for the Electronic Technologies Group was $81.8 million in Q4 fiscal '24, compared to $86.4 million in Q4 fiscal '23 [28] Market Data and Key Metrics Changes - The Flight Support Group's operating margin improved to 22.3% in Q4 fiscal '24, up from 19% in Q4 fiscal '23 [22] - The Electronic Technologies Group's operating margin was 24.3% in Q4 fiscal '24, down from 25.2% in Q4 fiscal '23 [28] Company Strategy and Development Direction - The company aims to expand its presence in key markets such as defense and space, focusing on innovative and cost-effective solutions [8] - The acquisition pipeline remains robust, with plans for opportunistic acquisitions to enhance cash-generating capabilities [11] - The company emphasizes the importance of developing new products and services, expanding market penetration, and maintaining financial strength [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in fiscal '25, driven by strong demand across product lines and recent acquisitions [31] - The company anticipates a return to growth in the Electronic Technologies Group, supported by a strong backlog and improving order flow [27] - Management highlighted the potential for increased military sales under the new administration, viewing it as a significant opportunity for cost savings [43][48] Other Important Information - The Board of Directors declared a cash dividend of $0.11 per share, marking the 93rd consecutive dividend [11] - Recent acquisitions include SVM Private Limited, Mid Continent Controls, and Marway Power Solutions, all expected to be accretive to earnings [12] Q&A Session Summary Question: Opportunities for revenue synergies from Wencor acquisition - Management confirmed that the Wencor acquisition has exceeded expectations, with ongoing cooperation expected to yield additional revenue synergies [38][41] Question: Military opportunities under the new administration - Management expressed excitement about potential military opportunities, emphasizing cost savings and quality improvements [43][48] Question: Outlook for margins in fiscal '25 - Management indicated that the Flight Support Group is expected to maintain operating margins between 23% and 24%, with slight improvements anticipated [50][51] Question: Growth expectations for specialty products - Management projected at least 10% organic growth for specialty products, driven by strong backlogs and demand [125] Question: Inventory levels at airlines - Management noted that airlines typically operate on a hand-to-mouth basis for HEICO parts, with no significant oversupply reported [128]