24% year-over-year organic growth in the commercial aerospace aftermarket drove Heico's report for the first quarter of fiscal 2011 of $0.50 earnings per share, beating RBC Capital Markets' estimate of $0.43 earnings per share.
RBC points to several important, extremely positive aftermarket trends in analyzing the Heico earnings report:
HEICO reported strong 29% YoY sales growth in its Flight Support Group with 24% organic aftermarket growth, which was up from last quarter's 14% organic aftermarket growth. With the increased volumes the company saw a 110bps sequential improvement in margins in the segment which came in at 16.9%. HEICO noted that the organic growth was driven primarily by increased traffic and capacity demands along with some deferred maintenance from airlines for newer aircraft platforms and that they saw very little restocking by the airlines in the quarter.
In raising its fiscal 2011 earnings per share estimate for Heico from $1.88 to $1.95 and its fiscal 2012 earnings per share estimate from $2.23 to $2.29, RBC notes that "this quarter could be a preview of things to come for Heico as the aftermarket continues to gain momentum and flow through to the company's bottom line."
Do you see similar trends -- increased traffic and capacity demands, deferred maintenance coming in, and little restocking by airlines?