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Why Is AAR (AIR) Down 5.9% Since Last Earnings Report?
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A month has gone by since the last earnings report for AAR (AIR - Free Report) . Shares have lost about 5.9% in that time frame, underperforming the S&P 500.
But investors have to be wondering, 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 drivers.
AAR Q3 Earnings Surpass Estimates, Sales Increase Year Over Year
AAR Corp. reported third-quarter fiscal 2026 adjusted earnings of $1.25 per share, which topped the Zacks Consensus Estimate of $1.21 by 3.3%. The bottom line also improved 26.3% from the year-ago quarter’s level of 99 cents.
The company reported GAAP earnings of $1.71 per share compared with a loss of 25 cents per share in the prior-year quarter.
The year-over-year improvement in the bottom line can be attributed to strong sales growth.
AIR’s Total Sales
In the quarter under review, AAR generated net sales of $845.1 million. The reported figure beat the Zacks Consensus Estimate of $807 million by 4.7%. The figure also increased 24.6% from $678.2 million recorded in the year-ago quarter.
The year-over-year improvement can be attributed to the double-digit growth across new parts distribution within the company's Parts Supply segment.
AAR: Segment Details
In the fiscal third quarter, sales in the Parts Supply segment totaled $392.5 million, up 45% year over year.
Repair & Engineering reported sales of $265.3 million, up 22.9% from the prior-year period’s level.
Integrated Solutions sales amounted to $167.8 million, up 3% from the year-ago quarter’s reported number.
Expeditionary Services recorded sales of $19.5 million, down 32.1% year over year.
AIR’s Operational Update
AIR’s adjusted operating margin increased from 9.7% to 10.2%, driven by higher volume and profitability in new parts distribution activities.
Selling, general and administrative expenses amounted to $89.8 million compared with $61.3 million a year ago.
Net interest expenses for the quarter totaled $17.1 million compared with $18.1 million in the year-ago period.
Financial Details of AAR
As of Feb. 28, 2026, AAR’s cash and cash equivalents amounted to $78.5 million compared with $96.5 million as of May 31, 2025.
The company’s long-term debt totaled $888.3 million as of Feb. 28, 2026, up from $968 million as of May 31, 2025.
In the first nine months of fiscal 2026, net cash from operating activities was $74.7 million against the net cash used of $18.7 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.
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. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.
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. Notably, 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 5.9% Since Last Earnings Report?
A month has gone by since the last earnings report for AAR (AIR - Free Report) . Shares have lost about 5.9% in that time frame, underperforming the S&P 500.
But investors have to be wondering, 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 drivers.
AAR Q3 Earnings Surpass Estimates, Sales Increase Year Over Year
AAR Corp. reported third-quarter fiscal 2026 adjusted earnings of $1.25 per share, which topped the Zacks Consensus Estimate of $1.21 by 3.3%. The bottom line also improved 26.3% from the year-ago quarter’s level of 99 cents.
The company reported GAAP earnings of $1.71 per share compared with a loss of 25 cents per share in the prior-year quarter.
The year-over-year improvement in the bottom line can be attributed to strong sales growth.
AIR’s Total Sales
In the quarter under review, AAR generated net sales of $845.1 million. The reported figure beat the Zacks Consensus Estimate of $807 million by 4.7%. The figure also increased 24.6% from $678.2 million recorded in the year-ago quarter.
The year-over-year improvement can be attributed to the double-digit growth across new parts distribution within the company's Parts Supply segment.
AAR: Segment Details
In the fiscal third quarter, sales in the Parts Supply segment totaled $392.5 million, up 45% year over year.
Repair & Engineering reported sales of $265.3 million, up 22.9% from the prior-year period’s level.
Integrated Solutions sales amounted to $167.8 million, up 3% from the year-ago quarter’s reported number.
Expeditionary Services recorded sales of $19.5 million, down 32.1% year over year.
AIR’s Operational Update
AIR’s adjusted operating margin increased from 9.7% to 10.2%, driven by higher volume and profitability in new parts distribution activities.
Selling, general and administrative expenses amounted to $89.8 million compared with $61.3 million a year ago.
Net interest expenses for the quarter totaled $17.1 million compared with $18.1 million in the year-ago period.
Financial Details of AAR
As of Feb. 28, 2026, AAR’s cash and cash equivalents amounted to $78.5 million compared with $96.5 million as of May 31, 2025.
The company’s long-term debt totaled $888.3 million as of Feb. 28, 2026, up from $968 million as of May 31, 2025.
In the first nine months of fiscal 2026, net cash from operating activities was $74.7 million against the net cash used of $18.7 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.
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. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.
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. Notably, AAR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.