Back to top

Analyst Blog

Illinois-based aerospace/defense products and services supplier, AAR Corp. (AIR - Analyst Report) posted its fiscal first-quarter 2013 (ended August 31, 2012) financial results. The company reported earnings per share, excluding special items, of 45 cents, up 9.8% compared with 41 cents earned in the year-ago quarter.

Result was at the high-end of management’s guided range of 42-45 cents; however, it lagged behind the Zacks Consensus Estimate of 46 cents.


In fiscal first quarter 2013, consolidated sales were $550.5 million, up 13.4% year over year and above management’s guided range of $540-$550 million. Sales were driven by healthy share gains in commercial aviation services.

Revenue from the Aviation Supply Chain business (27.0% of total revenue) was $148.7 million, down 7.7% year over year. Government and Defense Services revenue (27.4%) of approximately $150.6 million was roughly flat year over year.

Maintenance, Repair and Overhaul (MRO) segment, which accounted for roughly 19.2% of total revenue, generated $105.5 million, up 13.2% year over year. Structures and Systems revenue was $145.7 million (26.5% of total revenue), up 79.4% year over year.


Cost of sales in the reported quarter spiked 12.3% year over year to $460.2 million. Selling, general and administrative expense was $53.3 million, up 23.7% year over year.

The company's operating margin increased to 7.0% in the reported quarter from 6.8% in the year-ago comparable quarter.

Balance Sheet/Cash Flow

Exiting the fiscal first quarter 2013, AAR Corp's cash and cash equivalents were approximately $67.7 million, flat compared with the previous quarter. Net property, plant and equipment were $374.3 million, down $8.6 million in the sequentially preceding quarter. Total debt balance stood at $787.6 million.

Cash flow from operations in the quarter was $33 million and capital spending was roughly $11 million. During the quarter, the company expended roughly $6.1 million to repurchase 475,000 shares and paid dividends totaling $3.0 million.


Management revised its earnings per share guidance for fiscal 2013 to $1.60-$1.70 range compared with $1.55-$1.65 range expected earlier.

Currently, AIR has a Zacks #1 Rank, which translates into a short-term (1-3 months) Strong Buy rating. The company’s prime competitor Boeing Co (BA - Analyst Report) has Zacks #3 (Hold) rating while Lockheed Martin Corporation (LMT - Analyst Report) has Zacks #2 (Buy) rating.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
TRIQUINT SE… TQNT 20.36 +4.95%
CHYRONHEGO… CHYR 2.85 +4.78%
RF MICRO DE… RFMD 12.26 +4.25%
VASCO DATA… VDSI 14.70 +4.18%
ERBA DIAGNO… ERB 3.70 +2.49%