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Why Is AAR (AIR) Down 0.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for AAR (AIR - Free Report) . Shares have lost about 0.4% 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? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for AAR Corp. before we dive into how investors and analysts have reacted as of late.
AAR Q1 Earnings Beat Estimates, Sales Increase Year Over Year
AAR Corp. reported first-quarter fiscal 2026 adjusted earnings of $1.08 per share, which topped the Zacks Consensus Estimate of 98 cents by 10.2%. The bottom line also improved 27.1% from the year-ago quarter’s level of 85 cents.
The company reported GAAP earnings of 95 cents per share compared with 50 cents in the prior-year quarter.
The year-over-year improvement in the bottom line can be attributed to strong sales growth and lower selling, general and administrative expenses.
AIR’s Total Sales
In the quarter under review, AAR generated net sales of $739.6 million. The reported figure beat the Zacks Consensus Estimate of $686 million by 7.9%. The figure also increased 11.8% from $661.7 million recorded in the year-ago quarter.
The year-over-year improvement can be attributed to the double-digit growth across both aftermarket parts trading and new parts distribution within the company’s Parts Supply segment.
AAR: Segment Details
In the fiscal first quarter, sales in the Parts Supply segment totaled $317.8 million, up 27.3% year over year.
Repair & engineering reported sales of $214.6 million, down 1.4% from the prior-year period’s level.
Integrated solutions sales amounted to $185 million, up 9.5% from the year-ago quarter’s reported number.
Expeditionary Services recorded sales of $22.2 million, down 12.9% year over year.
AIR’s Operational Update
AIR’s adjusted operating margin increased from 9.1% to 9.7%, driven by higher volume and profitability in new parts distribution activities.
Selling, general and administrative expenses amounted to $71.2 million compared with $75.9 million a year ago.
Net interest expenses for the quarter totaled $18.5 million compared with $18.3 million in the year-ago period.
Financial Details of AAR
As of Aug. 31, 2025, AAR’s cash and cash equivalents amounted to $80 million compared with $96.5 million as of May 31, 2025.
The company’s long-term debt totaled $1.02 billion as of Aug. 31, 2025, up from $0.97 billion as of May 31, 2025.
In the first three months of fiscal 2026, net cash used from operating activities was $44.9 million compared with net cash used of $18.6 million in the year-ago period.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -5.16% due to these changes.
VGM Scores
At this time, AAR has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Following the exact same course, the stock has a score of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Interestingly, AAR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is AAR (AIR) Down 0.4% Since Last Earnings Report?
It has been about a month since the last earnings report for AAR (AIR - Free Report) . Shares have lost about 0.4% 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? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for AAR Corp. before we dive into how investors and analysts have reacted as of late.
AAR Q1 Earnings Beat Estimates, Sales Increase Year Over Year
AAR Corp. reported first-quarter fiscal 2026 adjusted earnings of $1.08 per share, which topped the Zacks Consensus Estimate of 98 cents by 10.2%. The bottom line also improved 27.1% from the year-ago quarter’s level of 85 cents.
The company reported GAAP earnings of 95 cents per share compared with 50 cents in the prior-year quarter.
The year-over-year improvement in the bottom line can be attributed to strong sales growth and lower selling, general and administrative expenses.
AIR’s Total Sales
In the quarter under review, AAR generated net sales of $739.6 million. The reported figure beat the Zacks Consensus Estimate of $686 million by 7.9%. The figure also increased 11.8% from $661.7 million recorded in the year-ago quarter.
The year-over-year improvement can be attributed to the double-digit growth across both aftermarket parts trading and new parts distribution within the company’s Parts Supply segment.
AAR: Segment Details
In the fiscal first quarter, sales in the Parts Supply segment totaled $317.8 million, up 27.3% year over year.
Repair & engineering reported sales of $214.6 million, down 1.4% from the prior-year period’s level.
Integrated solutions sales amounted to $185 million, up 9.5% from the year-ago quarter’s reported number.
Expeditionary Services recorded sales of $22.2 million, down 12.9% year over year.
AIR’s Operational Update
AIR’s adjusted operating margin increased from 9.1% to 9.7%, driven by higher volume and profitability in new parts distribution activities.
Selling, general and administrative expenses amounted to $71.2 million compared with $75.9 million a year ago.
Net interest expenses for the quarter totaled $18.5 million compared with $18.3 million in the year-ago period.
Financial Details of AAR
As of Aug. 31, 2025, AAR’s cash and cash equivalents amounted to $80 million compared with $96.5 million as of May 31, 2025.
The company’s long-term debt totaled $1.02 billion as of Aug. 31, 2025, up from $0.97 billion as of May 31, 2025.
In the first three months of fiscal 2026, net cash used from operating activities was $44.9 million compared with net cash used of $18.6 million in the year-ago period.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -5.16% due to these changes.
VGM Scores
At this time, AAR has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Following the exact same course, the stock has a score of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Interestingly, AAR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.