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AAR Corp. (AIR) Up 2.1% Since Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for AAR Corp. (AIR - Free Report) . Shares have gained about 2.1% in that time frame.

Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

AAR Corp Q1 Earnings Meet Estimates, Revenues Up Y/Y

AAR Corp. reported first-quarter fiscal 2018 earnings of 31 cents per share,inline with the Zacks Consensus Estimate. The bottom line also inched up 0.2% from the year-ago figure of 29 cents.

Total Revenue

Net sales came in at $439.2 million in the fiscal first quarter, beating the Zacks Consensus Estimate of $412 million by 6.6%. Also, revenues increased 8.5% from $404.8 million in the year-ago quarter.

Segment Details

In the reported quarter, Aviation Services reported revenues of $371.3 million, up 11% year over year.

Expeditionary Services garnered revenues of $67.9 million, down 3.3% from $70.2 million in the year-ago quarter.

Highlights of the Release

In the fiscal first quarter, AAR Corp.’s cost of sales increased 9.1% year over year to $374.7 million.

Selling, general and administrative expenses increased 7.1% to $48 million.

The company incurred interest expenses of $1.7 million, higher than $1.3 million in the year-ago quarter.

Financial Condition

As of Aug 31, AAR Corp.’s cash and cash equivalents were $15.1 million, up from $10.3 million as of May 31, 2017.

As of May 31, net property, plant and equipment were $198.1 million compared with $201.9 million as of May 31, 2017.

As of Aug 31, total debt increased to $192.9 million from $159.3 million as of May 31, 2017.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.

AAR Corp. Price and Consensus

 

AAR Corp. Price and Consensus | AAR Corp. Quote

 

VGM Scores

At this time, the stock has a subpar Growth Score of D, however its Momentum is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for value investors than momentum investors.

Outlook

Estimates have been trending upward for the stock and the magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.


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