A month has gone by since the last earnings report for AAR (AIR - Free Report) . Shares have lost about 1.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is AAR due for a breakout? 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 catalysts.
AAR Q2 Earnings Match Estimates, Sales Rise Y/Y
AAR Corp. reported second-quarter fiscal 2023 adjusted earnings of 69 cents per share, which came in line with the Zacks Consensus Estimate. Earnings recorded a solid surge of 30.2% from the year-ago quarter.
The company reported GAAP earnings per share (EPS) of 64 cents compared with 58 cents generated in the prior-year quarter.
Total Sales
In the quarter under review, AAR generated net sales worth $469.8 million. The reported figure surpassed the Zacks Consensus Estimate of $459 million by 2.4% and also improved 7.6% from $436.6 million recorded in the year-ago quarter.
Segment Details
In the fiscal second quarter, sales at the Aviation Services segment totaled $445.7 million, up 6.3% year over year.
Expeditionary Services recorded sales of $24.1 million, up 39.3% from $17.3 million in the year-ago quarter.
Operational Update
Adjusted gross profit margin in the reported quarter improved to 18.8% from 18.1% in the prior-year quarter. The margin expansion was the result of favorable impacts of the company’s efforts to reduce cost and improve operational efficiency.
SG&A expenses rose 12.1% to $52.8 million in the fiscal second quarter, driven by increased investments in digital initiatives. Adjusted operating margin expanded to 7.6% from 6.1% in the prior-year quarter, driven by the company’s efforts to improve operating efficiency as well as recovery in commercial sales.
AIR incurred net interest expenses of $2 million in the fiscal second quarter compared with $0.4 million in the year-ago quarter.
Financial Details
As of Nov 30, 2022, AAR’s cash and cash equivalents amounted to $49 million compared with $53.5 million as of May 31, 2022.
AAR reported long-term debt of $197.2 million as of Nov 30, 2022, up from $98.9 million as of May 31, 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, AAR has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile 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.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, AAR has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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A month has gone by since the last earnings report for AAR (AIR - Free Report) . Shares have lost about 1.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is AAR due for a breakout? 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 catalysts.
AAR Q2 Earnings Match Estimates, Sales Rise Y/Y
AAR Corp. reported second-quarter fiscal 2023 adjusted earnings of 69 cents per share, which came in line with the Zacks Consensus Estimate. Earnings recorded a solid surge of 30.2% from the year-ago quarter.
The company reported GAAP earnings per share (EPS) of 64 cents compared with 58 cents generated in the prior-year quarter.
Total Sales
In the quarter under review, AAR generated net sales worth $469.8 million. The reported figure surpassed the Zacks Consensus Estimate of $459 million by 2.4% and also improved 7.6% from $436.6 million recorded in the year-ago quarter.
Segment Details
In the fiscal second quarter, sales at the Aviation Services segment totaled $445.7 million, up 6.3% year over year.
Expeditionary Services recorded sales of $24.1 million, up 39.3% from $17.3 million in the year-ago quarter.
Operational Update
Adjusted gross profit margin in the reported quarter improved to 18.8% from 18.1% in the prior-year quarter. The margin expansion was the result of favorable impacts of the company’s efforts to reduce cost and improve operational efficiency.
SG&A expenses rose 12.1% to $52.8 million in the fiscal second quarter, driven by increased investments in digital initiatives. Adjusted operating margin expanded to 7.6% from 6.1% in the prior-year quarter, driven by the company’s efforts to improve operating efficiency as well as recovery in commercial sales.
AIR incurred net interest expenses of $2 million in the fiscal second quarter compared with $0.4 million in the year-ago quarter.
Financial Details
As of Nov 30, 2022, AAR’s cash and cash equivalents amounted to $49 million compared with $53.5 million as of May 31, 2022.
AAR reported long-term debt of $197.2 million as of Nov 30, 2022, up from $98.9 million as of May 31, 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, AAR has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile 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.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, AAR has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
Get the latest research report on AIR - FREE