Heico Corp (NYSE:HEI) rode growth from acquisitions for most of the past year, but now it's back to growing organically on its own. Fiscal second-quarter results released after the market closed on Tuesday showed steady expansion across the board. 

Better yet, management increased its outlook for the rest of 2017. Here's what investors should take away from the quarter. 

Private jet flying above the clouds.

Image source: Getty Images.

Heico Corp: The raw numbers

MetricQ2 2017Q2 2016Year-Over-Year Change
Sales $368.7 million $350.6 million  5.1% 
Net income $45.7 million  $38.7 million  18.2% 
Diluted EPS $0.53  $0.45  17.8% 

Data source: Heico Corp. 

What happened with Heico Corp this quarter? 

Heico performed well across the board, and management expects that to continue. Results are being driven by organic growth, which is a change from its acquisition-driven growth over the past year

  • Flight support group net sales rose 5% to $231.8 million, thanks entirely to organic growth. Operating income was up 8% to $44.7 million, which was a quarterly record. Management now expects mid- to high-single-digit growth in sales for the full year. 
  • Electronic technologies group's net sales rose 6% to $141.2 million, driven by 5% organic growth, and operating income jumped 16% to $38.8 million. Operating margin improved to 27.5%, up from 25.4% a year ago. 
  • The revolving credit facility was increased by $200 million in April to $1 billion, and management plans to use the flexibility to pursue more acquisitions. 
  • In April, Heico stock was split 5-for-4 and the per-share results above reflect that. 

What management had to say

Management said strong demand is driving the improvement in results and that should continue for the remainder of the fiscal year. Net sales are expected to grow 8% to 10% and net income is expected to rise 12% to 14% -- both increases from previously announced guidance. Cash from operations is also expected to be $270 million, a $10 million increase from previous guidance. 

Guidance doesn't include any potential growth from acquisitions, something management seems keen to keep as a key part of its strategy going forward. 

Looking forward

Demand for aerospace products is growing slowly but surely, and Heico's management has been able to fold in acquisitions with strong margins that add to organic growth. The increase in guidance should give some assurance that near-term results are going to impress investors.

Strong momentum should continue as the aerospace industry overall continues to grow in the long term. And that tailwind is something Heico should be riding for years.

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