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AAR Corp (AIR) Q4 Earnings Surpass Estimates, Revenues Lag

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AAR Corp. (AIR - Free Report) reported fourth-quarter fiscal 2018 adjusted earnings of 54 cents per share, which surpassed the Zacks Consensus Estimate of 52 cents by 3.9%. The adjusted figure reflected a year-over-year improvement of 10.2% from 49 cents in the year-ago quarter.

Excluding one-time items, the company reported earnings of 52 cents from continuing operations compared with 48 cents in fourth-quarter fiscal 2017.

In fiscal 2018, the company’s adjusted earnings came in at $1.79 per share, reflecting an annual improvement of 17% from $1.53 generated in fiscal 2017. The bottom-line figure also surpassed the Zacks Consensus Estimate of $1.69 by 6%.

AAR Corp. Price, Consensus and EPS Surprise

 

AAR Corp. Price, Consensus and EPS Surprise | AAR Corp. Quote

Total Revenues

In the fiscal fourth quarter, net revenues of $473.5 million fell short of the Zacks Consensus Estimate of $476 million by 0.5%. However, the top-line figure increased 5.1% from $450.5 million in the year-ago quarter.

Net revenues in fiscal 2018 totaled $1.75 billion, reflecting an annual improvement of 10% from $1.59 billion generated in fiscal 2017. Nonetheless, the reported figure missed the Zacks Consensus Estimate of $1.82 billion by 3.8%.

Segment Details    

In the reported quarter, revenues from the Aviation Services segment summed $429.6 million, up 2% year over year.

Expeditionary Services garnered revenues of $43.9 million, up 50.3% from $29.2 million in the year-ago quarter.

Highlights of the Release

In the fiscal fourth quarter, AAR Corp’s cost of sales increased 4.3% year over year to $388.8 million.

Selling, general and administrative expenses increased 13.6% to $61.9 million.

The company incurred interest expenses of $2.2 million compared with $1.5 million in the year-ago quarter.

Financial Condition

As of May 31, 2018, AAR Corp’s cash and cash equivalents were $31.1 million, reflecting a massive improvement from $10.3 million as of May 31, 2017.

As of May 31, 2018, net property, plant and equipment were $133.2 million compared with $117.2 million as of May 31, 2017.

As of May 31, 2018, total debt increased to $178.9 million from $156.2 million as of May 31, 2017.

Dividend & Share Buyback

In fiscal 2018, the company paid dividends of $10.3 million or 30 cents per share. Also, the company repurchased 0.3 million of its shares for $13.1 million.

Zacks Rank & Stock to Consider

AAR Corp currently has a Zacks Rank #4 (Sell).

A better-ranked stock in the same space is Kratos Defense & Security Solutions (KTOS - Free Report) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kratos Defense & Security Solutions delivered an average positive earnings surprise of 9.52% in the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings moved north 11.8% to 19 cents in the last 90 days.

Other Defense Releases

Raytheon Company (RTN - Free Report) reported first-quarter 2018 earnings from continuing operations of $2.20 per share, which outpaced the Zacks Consensus Estimate of $2.10 by 4.8%.

Spirit AeroSystems’ (SPR - Free Report) first-quarter 2018 earnings came in at $1.10 per share, missing the Zacks Consensus Estimate of $1.35 by 18.5%.

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