CAE shares fall on revenue miss with weakness in civil aviation

[Seat and controller in cock pit of flight simulator]
Panlop/iStock via Getty Images

CAE (NYSE:CAE [https://seekingalpha.com/symbol/CAE]) (CAE:CA [https://seekingalpha.com/symbol/CAE:CA]) shares on Wednesday tumbled as much as 11% for the steepest intraday drop since February 2024 after the Canadian flight simulator manufacturer projected [https://seekingalpha.com/news/4484271-cae-gaap-eps-of-0_21-revenue-of-1_09b] slower growth in its civil aviation unit and missed quarterly revenue forecasts.

The Montreal-based company now expects its civil aviation segment, which provides commercial pilot training, to expand at the lower end of its earlier guidance, in the mid-single-digit range. Management cited delayed aircraft deliveries and a rise in grounded planes, factors prompting airlines to scale back hiring plans.

Fiscal first-quarter revenue came in at C$1.1 billion ($799 million), short of analyst estimates. The stock slid 11% to C$36.29 in Toronto by midday, marking its steepest intraday drop since February 2024.

While the civil unit faces headwinds, new CEO Matthew Bromberg sees momentum in defense training. An aerospace industry veteran and former U.S. Navy officer, Bromberg told analysts CAE is “uniquely positioned” to support military training needs. The defense segment, which includes air force pilot instruction, generated C$34.4 million in operating income, an 83% increase from a year earlier.

Chairman Calin Rovinescu, former Air Canada CEO, said heightened defense spending (driven by NATO’s new 5% of GDP target) offers additional growth opportunities.

“As defense procurement and policy frameworks continue to evolve, we remain committed to close alignment and active participation,” Rovinescu told investors.

The division’s performance had previously lagged due to supply-chain strains and broader economic challenges. Activist investor Browning West LP, which last year pushed for leadership changes, has argued that improving defense profitability is essential to CAE’s (NYSE:CAE [https://seekingalpha.com/symbol/CAE]) (CAE:CA [https://seekingalpha.com/symbol/CAE:CA]) long-term potential.

Bromberg officially succeeded longtime chief executive Marc Parent on Wednesday, ending Parent’s more than two-decade tenure at the company, including 16 years as CEO. Bromberg most recently led global operations at Northrop Grumman.

CAE (CAE [https://seekingalpha.com/symbol/CAE]) (CAE:CA [https://seekingalpha.com/symbol/CAE:CA]) earned an adjusted 21 Canadian cents per share in the quarter, topping forecasts by one cent. Despite the miss on sales, the company’s shares have rebounded sharply from an August 2024 low of C$22.62 following last year’s management shake-up.

MORE ON CAE INC.

* CAE Inc. (CAE) Q1 2026 Earnings Call Transcript [https://seekingalpha.com/article/4813150-cae-inc-cae-q1-2026-earnings-call-transcript]
* Cae targets 2.5x net debt to adjusted EBITDA by fiscal year-end amid leadership transition and defense growth [https://seekingalpha.com/news/4484799-cae-targets-2_5x-net-debt-to-adjusted-ebitda-by-fiscal-year-end-amid-leadership-transition]
* CAE Q1 2026 Earnings Preview [https://seekingalpha.com/news/4484041-cae-q1-2026-earnings-preview]
* Historical earnings data for CAE Inc. [https://seekingalpha.com/symbol/CAE:CA/earnings]
* Financial information for CAE Inc. [https://seekingalpha.com/symbol/CAE:CA/income-statement]