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CAE Inc fell short of analysts’ profit expectations on Wednesday and reported weaker-than-expected free cash flow in the quarter, sending its shares tumbling as much as 14 per cent.

The world’s largest civil aviation training company reported a negative free cash flow of $102.1 million, much bigger than an estimated negative cash flow of $11 million, according to four analysts polled by Refinitiv.

The company, which also offers health care and military aircraft training, has been inking deals to train pilots for carriers such as Southwest Airlines Co and Avianca Holdings SA, as the aviation industry grapples with increasing air traffic and a limited supply of commercial pilots.

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Revenue from CAE’s biggest unit, civil aviation training solutions, rose 10.8 per cent to $477.6 million, mainly driven by the CAE’s acquisition of Bombardier Inc’s business aircraft training (BAT) unit. However, the unit’s revenue fell short of estimates, TD Securities analysts said in a note.

In March, the company concluded the acquisition of BAT, valued at $645-million, adding 12 Bombardier business aviation full-flight simulators located in Dallas and Montreal to its training network.

CAE recorded sales of 47 simulators for Boeing’s grounded 737 MAX, with 11 already delivered and another 11 to be delivered by December 2019, a company spokeswoman said.

Overall, CAE’s revenue rose about 14 per cent to $825.6 million, but fell short of analysts’ expectations of $845.96 million.

The company also reported a near 30 per cent fall in operating income from defense and security unit, its second biggest business. Costs also rose higher with CAE’s selling, general and administrative expenses up 10 per cent while finance expenses more than doubled.

Net income attributable to shareholders fell 11.4 per cent to $61.5 million, or 23 cents per share, in the first quarter of fiscal year 2020 ended June 30, 2019.

Analysts on an average had expected the company to report a profit of 28 cents per share.

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The company also said its board had approved a 10% increase to its quarterly dividend to 11 cents per share.

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