HEICO Shares Climb on Record Q4 Earnings and Strong 2026 Outlook
Aerospace and defense supplier posts 35% jump in net income, fueled by robust organic growth in its Flight Support and Electronic Technologies divisions.
HEICO Corporation (NYSE: HEI) shares gained ground after the aerospace and defense manufacturer reported record-breaking net income and revenue for its fiscal fourth quarter, surpassing analyst expectations and signaling continued strength into fiscal 2026.
The Florida-based company announced that its net income surged 35% year-over-year, while revenue for the quarter climbed to $1.21 billion, an 8.5% beat on consensus estimates. Adjusted earnings per share came in at $1.33, outperforming analyst projections by nearly 10% and showcasing the company's ability to capitalize on sustained demand in its key markets.
In Tuesday's trading session, HEICO's stock rose to $308.73, a reflection of investor confidence following the strong financial disclosure. The company, with a market capitalization of approximately $42.7 billion, has demonstrated consistent growth in a sector benefiting from tailwinds in commercial aviation and defense spending.
Driving the record results was exceptional performance across HEICO's primary business segments. The Flight Support Group (FSG), its largest division, reported a 16% increase in organic sales growth. The company noted this was the FSG's 21st consecutive quarter of sequential sales growth, underscoring the persistent and robust demand for its commercial aerospace products and services. Total sales for the FSG, including acquisitions, grew 21%.
"Our record-breaking results reflect a continued robust demand for our products and services across the commercial aerospace, defense, and space industries," commented Laurans A. Mendelson, HEICO's Chairman and CEO, in a statement. The company's strategy of providing high-quality, cost-effective alternatives to original equipment manufacturer (OEM) parts has resonated with airlines focused on fleet maintenance and operational efficiency.
The Electronic Technologies Group (ETG) also delivered strong results, with organic sales rising 7%, driven by increased demand for its defense, aerospace, and space-related products. Total sales for the segment increased by 14%.
Beyond top-line growth, HEICO demonstrated improved profitability and financial health. Operating margins expanded to 23.1% from 21.6% in the prior-year period, attributed to higher gross profit margins and operational efficiencies. The company also generated a 44% increase in cash flow from operations, which it used to significantly reduce its leverage, with its net debt-to-EBITDA ratio falling to 1.60x from 2.06x a year ago.
Looking ahead, management provided an optimistic forecast, anticipating continued net sales growth across both the Flight Support and Electronic Technologies segments in fiscal 2026. This outlook is supported by a healthy backlog and ongoing demand trends in commercial air travel and global defense modernization programs. According to data from the company's profile, a consensus of Wall Street analysts maintains a positive outlook, with a majority holding 'buy' or 'strong buy' ratings.
HEICO's performance serves as a key indicator for the health of the broader aviation and defense supply chain, suggesting that demand for aftermarket parts and advanced electronic components remains resilient despite broader economic uncertainties.