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AAR Corp (AIR) Q1 Earnings Top Estimates on Higher Y/Y Sales

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AAR Corp. (AIR - Free Report) reported first-quarter fiscal 2019 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 63.6% from 33 cents registered in the year-ago quarter.

The year-over-year bottom-line growth can be primarily attributed to solid improvement in sales.

Excluding one-time items, the company reported earnings of 54 cents from continuing operations compared with 32 cents in first-quarter fiscal 2018.

AAR Corp. Price, Consensus and EPS Surprise

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

Total Sales

In the reported quarter, net sales of $466.3 million exceeded the Zacks Consensus Estimate of $455 million by 2.5%. The top line also increased 17.2% from $397.9 million in the year-ago quarter.

The year-over-year improvement in sales was driven by solid results from AAR Corp’s trading, distribution and programs activities. Also, the successful launch of the INL/A Worldwide Aviation Support Services (WASS) program, which achieved full run-rate in July, contributed to the top line.

Segment Details    

In the fiscal first quarter, revenues from the Aviation Services segment summed $438.4 million, up 18.1% year over year.

Expeditionary Services garnered revenues of $27.9 million, up 4.9% from $29.2 million in the year-ago quarter.

Highlights of the Release

AAR Corp’s cost of sales in the reported quarter increased 17.5% year over year to $395.1 million.

Selling, general and administrative expenses rose 10% to $48.8 million.

The company incurred interest expenses of $1.6 million compared with $1.7 million in first-quarter fiscal 2018.

Financial Condition

As of Aug 31, 2018, AAR Corp’s cash and cash equivalents amounted to $22.7 million compared with $31.1 million as of May 31, 2018.

As of Aug 31, 2018, net property, plant and equipment were $132.5 million compared with $133.2 million as of May 31, 2018.

As of Aug 31, 2018, total debt increased to $210.7 million from $178.9 million as of May 31, 2018.

Zacks Rank

AAR Corp currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Defense Releases

Hexcel Corporation (HXL - Free Report) reported second-quarter 2018 adjusted earnings of 75 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 1.3%.

Textron Inc.’s (TXT - Free Report) second-quarter 2018 earnings from continuing operations came in at 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%.

Raytheon Company (RTN - Free Report) reported second-quarter 2018 adjusted earnings per share from continuing operations of $2.45, outpacing the Zacks Consensus Estimate of $2.32 by 5.6%.

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