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AAR Corp (AIR) Q2 Earnings Increase Y/Y, Revenues Decline

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AAR Corp. (AIR - Free Report) reported second-quarter fiscal 2017 earnings of 35 cents per share, up 34.6% from the year-ago figure of 26 cents.

Total Revenue

Net sales came in at $423.8 million in the second quarter of fiscal 2017, down 1.8% from $431.5 million in the year-ago quarter.

Segment Details

In the reported quarter, Aviation Services reported revenues of $346.7 million, down 3.6% year over year due to the impact of the Lake Charles transition and the wind-down of the KC10 Program.

Expeditionary Services garnered revenues of $77.1 million, up 7.2% from $71.9 million in the year-ago quarter.

Highlights of the Release

In the fiscal second quarter, AAR Corp.’s cost of sales declined 4% year over year to $357.6 million.

Selling, general and administrative expenses increased 7.4% to $46.3 million due to investments in new business development.

The company incurred interest expenses of $1.2 million, lower than $1.5 million in the year-ago quarter.

Financial Condition

AAR Corp.’s cash and cash equivalents as of Nov 30, 2016 were $23.0 million, down from $31.2 million as of May 31, 2016.

Net property, plant and equipment were $213.9 million as of Nov 30, 2016, compared with $238.1 million as of May 31, 2016.

As of Nov 30, 2016, total debt increased to $163.3 million from $150.1 million as of May 31, 2016.

Dividend History

During the fiscal second quarter, the company has paid dividends of $2.6 million, or 7.5 cents per share.

Price Movement

During the quarter under review, AAR Corp.’s rate of return was 40.8%, outperforming the Zacks categorized Aerospace/Defense Equipment industry’s gain of 7.6%. This could have been because of the company’s persistent focus on gradually lowering its debts as well as its expectations of an increase in cash flow driven by strong fundamentals. Being the largest independent MRO provider in North America, the company enjoys a competitive edge over others operating in this space such as Ducommun Inc. (DCO - Free Report) , CAE Inc. (CAE - Free Report) and Spirit AeroSystems Holdings, Inc. (SPR - Free Report) .



Zacks Rank

AAR Corp. currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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