The head of flight simulator maker CAE Inc. is closely watching events in the U.S. after last week’s election, but said he isn’t immediately worried that the incoming president will shake things up too much for the business.
“We’re going to continue to monitor the situation, but I don’t really see any changes near or longer term at the moment,” Marc Parent told analysts on a Wednesday call.
His remarks came on the heels of the U.S. election, which will result in Republican businessman Donald Trump returning to power next year.
In his race against Democrat Kamala Harris, Trump alarmed many in the business world by threatening to impose tariffs on imports.
Trump, who called himself Tariff Man at one point during the campaign, said the charges could amount to 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
Asked about them Wednesday, CAE chief executive Parent said his Montreal-based company was “certainly not forecasting any kind of significant impact.”
“Remember, we have a very strong presence in the United States,” he said.
The country is CAE’s largest market and half of its employees are located there, he said.
The business has also been involved in training 43,000 members of the country’s military aircrew, representing the army, air force, marines and navy.
“We play a vital role in supporting national security,” Parent said.
The evening before the analyst call, CAE released second-quarter earnings that featured a net income attributable to shareholders of $52.5 million, down 10.1 per cent from $58.4 million in the same period a year earlier.
Its revenue rose 8.2 per cent to $1.14 billion in the period ended Sept. 30 from $1.05 billion the year before.
Executives said the quarter was impacted by aircraft supply disruptions and low U.S. pilot hiring, but analysts expected the figures to be well-received.
James McGarragle of RBC Dominion Securities Inc., said he saw the quarter was as “a very positive result,” especially because he saw signs that the company is making “solid progress” on improving its defence margins.
The results pushed CAE’s share price up by about eight per cent to $29.20 in early afternoon trading on Wednesday.
Along with the financial results, CAE announced Tuesday that Parent, who has served as president and CEO for 15 years, will leave in August.
“Today is business as usual and I do want to stay focused on the quarterly results, but this is a big moment for CAE and for me personally,” Parent said at the start of the company’s Wednesday call.
“It’s been really the privilege of a lifetime to lead this company. I can’t tell you how proud I am of what our team has accomplished.”
Parent will remain in the position until next summer’s annual meeting. The business has already begun a search for his replacement, which CAE said is all part of an ongoing succession plan.
McGarragle said the announcement came as a surprise, but “we hold Mr. Parent in high regard and point to his impressive track record at CAE.”
This report by The Canadian Press was first published Nov. 13, 2024.
Companies in this story: (TSX:CAE)
