Updated Aug 6 at 2:12pm ET.
Follow HEICO to never miss an important update.
The company raised 1.2 billion dollars by selling senior notes, which are a type of corporate bond that must be repaid before other debts. It plans to use this cash to pay down what it owes on its 2.2 billion dollar credit line.
This is a routine move to lock in fixed interest rates on its debt rather than relying on a floating-rate credit line. By shifting the debt to these longer-term notes, which don't come due until 2031 and 2036, the company gains more predictable interest costs as it continues to hunt for new businesses to buy.
Source: 8-K filing
Airlines are seeing their fuel bills climb sharply, with total spending on jet fuel hitting 6.66 billion dollars in May. This spike is largely due to ongoing conflict in the Middle East, which has made oil more expensive and harder to transport.
For this company, higher fuel costs are a double-edged sword. While expensive fuel can force airlines to cut back on flights, it also makes them desperate to save money on maintenance. Since the company sells replacement parts that are cheaper than those from original manufacturers, a squeeze on airline profits often drives more customers to its lower-cost alternatives.
Management has a perfect record of clearing the bar they set for analysts, often beating profit expectations by double digits while growing sales by 25 percent.
| Expectation | |
|---|---|
| EPS | $1.50 |
| Revenue | $1.35B |
