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By ROSS MAROWITS
The Canadian Press

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MONTREAL - CAE Inc. has cushioned itself from global economic uncertainty that threatens many of its airline customers by increasing its military business and geographic reach, the flight simulator and training company said Wednesday.

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The Canadian Press

COMPANY IN GOOD SHAPE: CAE's president and CEO Robert E. Brown speaks at the company's annual general meeting in Montreal on Wednesday.

The Montreal-based company reported that its first-quarter profit rose 19 per cent to $46.1 million, as a solid base of military customers and strong ongoing revenues helped it withstand sagging economic conditions.

"Overall, we performed well this quarter and this is once again proof that our strategy, both geographically as well as between military and civil segments and products and services, is paying off," president and CEO Robert Brown told shareholders.

Civil simulator and training account for 55 per cent of revenues, with the military accounting for the remaining 45 per cent. Revenues are split evenly among North America, Europe and emerging markets.

CAE said it's optimistic it can thrive in the coming quarters despite facing a troubling operating environment caused by high oil prices, an uncertain and evolving global economy, airline problems and the strong Canadian dollar.

"We prepared over the last few years to better position our operations in these circumstances and some signs justify our optimism; notably, the military and civil sectors continue to be supported by long-term economic conditions," Brown said.

Also announced Wednesday was another military contract win. The Department of National Defence has named CAE the prime contractor for a program called the Air Force Integrated Information and Learning Environment (AFIILE).

It was one of a series of military contracts, with total value of $106 million, announced Wednesday. In addition to acting as lead on AFIILE, CAE also won a one-year contract from U.S. defence contractor L-3 Communications to continue providing avionics software upgrades, integrated logistics support and data management services for the Canadian Forces CF-18 aircraft.

Richard Stoneman of Dundee Securities said the company is in a stronger position because of its diversification and will benefit when American carriers begin to upgrade their fleets.