B/E Aerospace Inc (NASDAQ:BEAV) kept investors on the edge of their seats about the spinoff of its aerospace logistics unit known as KLX. It finally completed the process, and it seems things are good to go. However, a few questions still hang around.
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In the spinoff of KLX, B/E Aerospace Inc (NASDAQ:BEAV) gave its shareholders one share of the new company for every two shares that they held. The new company started trading on NASDAQ under the ticker symbol “KLXI”. The now spun off KLX generated revenue of $1.6 billion.
Expected benefits after spinoff
With the separation of KLX now done, several benefits are expected to come in the way of B/E Aerospace Inc (NASDAQ:BEAV). First, the company can now gain almost singular focus on its core operations and improve performance there. Second, the company’s spending on expenses is expected to decline, leading to more savings that can be redeployed in the business or distributed to shareholders.
Additionally, offloading of the logistic business means that B/E Aerospace Inc (NASDAQ:BEAV) can now attract contracts from former rivals in the logistic business. Such have the potential of improving revenue in the company and leading to better value for the shareholders.
Wall Street is bullish on the prospects of B/E Aerospace Inc (NASDAQ:BEAV). Most analysts covering the stock have positive ratings on it, which gives it an average rating of a “Buy”.
B/E Aerospace’s revenue has been on the rise this year. The company missed revenue expectation in the most recent quarter but managed to take its numbers up from the previous quarter. It generated revenue of more than $1.10 billion in the most recent quarter. That compared with $1.08 billion and $1.01 billion in the previous and earlier quarters, respectively.
B/E Aerospace Inc (NASDAQ:BEAV) closed the most recent quarter with cash and equivalents totaling $289.30 million. That was an improvement from $216.50 million in the previous quarter. Its cash position has been up and down this year.
B/E Aerospace Inc (NASDAQ:BEAV) has outperformed most of the stellar names in the market with its rise from the bottom of 2008 to the 2014 top, when it appreciated nearly 20 times from the bottom of $5.37 to the high of $101.13. But the price action in the early months of this year 2014 had created a bearish pattern of Head & Shoulders, which was triggered in October. 50% of the entire bull market has been retraced already and the next target may be $42 levels.