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AAR Corp (AIR) Beats Q3 Earnings Estimates, Revenues Lag

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AAR Corp. (AIR - Free Report) reported third-quarter fiscal 2018 adjusted earnings of 49 cents per share, which surpassed the Zacks Consensus Estimate of 48 cents by 2.1%. The adjusted figure reflected a year-over-year improvement of 16.7%, when compared to 42 cents of third-quarter's fiscal 2017.

Excluding one-time items, the company reported earnings of 44 cents from continuing operations in the quarter, compared with 40 cents it generated in the prior-year quarter.

Total Revenues

Net sales came in at $456.3 million in the fiscal third quarter, which missed the Zacks Consensus Estimate of $479 million by 4.8%. However, revenues increased 12.% from $407.2 million in the year-ago quarter.

Segment Details    

In the reported quarter, Aviation Services reported revenues of $426.4 million, up 11.4% year over year.

Expeditionary Services garnered revenues of $29.9 million, up 22.5% from $24.4 million in the year-ago quarter.

Highlights of the Release

In the fiscal third quarter, AAR Corp’s cost of sales increased 11.15% year over year to $378.7 million.

Selling, general and administrative expenses increased 23.9% to $53.4 million.

The company incurred interest expenses of $2.2 million, compared with $1.3 million in the year-ago quarter.

 

AAR Corp. Price, Consensus and EPS Surprise

 

AAR Corp. Price, Consensus and EPS Surprise | AAR Corp. Quote

 

Financial Condition

As of Feb 28, 2018, AAR Corp’s cash and cash equivalents were $23.9 million, up from $10.3 million as of May 31, 2017.

As of Feb 28, 2018, net property, plant and equipment were $135.3 million compared with $117.2 million as of May 31, 2017.

As of Feb 28, 2018, total debt increased to $196.2 million from $156.2 million as of May 31, 2017.

Dividend History

During the reported quarter, the company paid dividends of $2.5 million or 7.5 cents per share.

Zacks Rank & Key Pick

AAR Corp currently has a Zacks Rank #4 (Sell).

A better-ranked stock in the same space is Curtiss-Wright Corporation (CW - Free Report) which carries a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Curtiss-Wright Corporation recorded an average positive earnings surprise of 15.06% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 63 cents to $5.80 in the last 90 days.

Recent Peer Release

Lockheed Martin (LMT - Free Report) reported fourth-quarter 2017 adjusted earnings from continuing operations of $4.30 per share, which surpassed the Zacks Consensus Estimate of $4.06 by 5.9%.

Spirit AeroSystems (SPR - Free Report) recorded fourth-quarter 2017 adjusted earnings of $1.32 per share, which surpassed the Zacks Consensus Estimate of $1.22 by 8.2%.

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