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AAR Corp. (AIR) to Report Q4 Earnings: What's in the Cards?

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AAR Corp. (AIR - Free Report) is scheduled to release fourth-quarter fiscal 2021 results on Jul 20, after market close. In the last reported quarter, the company delivered an earnings surprise of 19.35%.

Moreover, AAR Corp. has a four-quarter earnings surprise of 129.07%, on average.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Factors at Play

As a gradual improvement has been observed in commercial passenger travel activity over the past few months, AAR Corp.’s overall sales are expected to have made some recovery in the fiscal fourth quarter from the earlier downturns courtesy of the pandemic’s impact.

AAR Corp. Price and EPS Surprise

AAR Corp. Price and EPS Surprise

AAR Corp. price-eps-surprise | AAR Corp. Quote

Meanwhile, the company’s government businesses, which have been delivering strong performance over the past year amid the challenges posed by COVID-19, are expected to have performed favorably.

Hence, the company’s quarterly top-line performance is likely to have been encouraging.

Notably, the Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $421.4 million, which indicates a rise of 1.2% from the year-ago quarter’s reported figure.

Stable earnings from the Department of State’s WASS contract, which has been contributing well for the past few quarters, must have added value to the company’s fiscal fourth-quarter bottom-line figure. Meanwhile, initiatives taken by the company to reduce its indirect cost and drive efficiency are expected to have boosted its quarterly gross profit. This in turn is also likely to have contributed favorably to AAR Corp’s earnings in the soon-to-be-reported quarter.  

Moreover, encouraging top-line performance is expected to have benefited the company’s quarterly earnings.

The Zacks Consensus Estimate for fiscal fourth-quarter earnings per share is pegged at 44 cents, which indicates an improvement of 69.2% from the year-ago quarter’s reported figure.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for AAR Corp. this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But this is not the case here.

Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: AAR Corp. carries a Zacks Rank #3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are some defense companies you may want to consider, as these have the right combination of elements to post an earnings beat in their upcoming releases:

General Dynamics (GD - Free Report) has an Earnings ESP of +1.98% and a Zacks Rank #3.

Leidos Holdings (LDOS - Free Report) has an Earnings ESP of +4.46% and a Zacks Rank #3.

Spirit AeroSystems (SPR - Free Report) has an Earnings ESP of +13.20% and a Zacks Rank #3.