*Results for its Q1 smashed records at CAE whose earnings, at 26 loony cents/sh beat forecasts by 30% (Capital IQ consensus) and revenues, at C$651.6 mn, by 25%. The prior year EPS was 17 loony cents and its prior Q1 revenues were C$557 mn. So this is a growth play, happily gaining more from civil than military pilot training.

It also reported a record order backlog of C$6.5 bn at the close of the quarter. Its 12-mo civil book to sales ratio was 1.22x and civil accounted for half the backlog. Military backlog over the same period was only 1.03x although defense sales rose 31% year/year. This will probably now correct as more bits of the world prove hostile. Healthcare, its newest and smallest segment, not only saw sales drop sequentially but also fell into the red by C$100,000 vs a positive C$600,000 in the prior FY.

Free cash-flow from continuing operations also went into the black, by C$15.5 mn vs a negative C$61.2 mn in the prior year Q1. It also got recognition for deferred tax assets in Brazil which cut its tax bill to Ottawa. Return on capital employed rose to 11.5% vs a mere 10.2% last year. The main reason for the boosted ROCE is that CAE is standardizing some commercial aircraft simulators. This not only cuts costs, but it also will result in replacing percent-of-completion booking of sales with full completion of sales, which has started for the current FY. This boosts sales.

Items reducing net included $2.2 mn for acquisition and integration of the Lockheed-Martin Commercial Flight Training sub, which took place during the quarter. It uses a FY to March 31.

Moreover the maker of airplane and healthcare training simulators, discovered by Patti the Biotech Maven (whose son was a trainee pilot), also upped its dividend by 7% to 8 Canada cents/sh. It also bought back and canceled just under 1.2 mn common shares at C$15.5o in the quarter.

CEO Marc Parent forecast that CAE expects more growth in revenues and operating income in civil aviation in the current FY; “modest” growth in military aviation; and “double-digit percentage growth” in healthcare. Its capex will remain stable at about C$118 mn, plus an exceptional spend of ~$100 mn for a long-term deal with the US Army to go live next spring, at the end of the current FY.

CAE closed up 1.79% yesterday.