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AAR Corp (AIR) Earnings Beat Estimates in Q3, Sales Miss

Zacks Equity Research

AAR Corp. AIR reported third-quarter fiscal 2019 adjusted earnings of 79 cents per share, which surpassed the Zacks Consensus Estimate of 69 cents by 14.5%. The figure reflected a year-over-year improvement of 61% from 49 cents in the year-ago quarter.

Excluding one-time items, the company reported earnings of 78 cents from continuing operations compared with 90 cents in third-quarter fiscal 2018.

Total Sales

In the reported quarter, net sales of $529.5 million missed the Zacks Consensus Estimate of $544 million by 2.7%. However, the top line increased 16% from $456.3 million in the year-ago quarter.

The year-over-year improvement in sales was driven by continued growth in the company’s parts supply and programs activities.

Segment Details    

In the fiscal third quarter, sales from the Aviation Services segment summed $497.3 million, up 15.9% year over year.

Expeditionary Services garnered sales of $32.2 million, up 17.9% from $27.3 million in the year-ago quarter.

Highlights of the Release

AAR Corp’s cost of sales in the reported quarter increased 17.3% year over year to $444.2 million.

Selling, general and administrative expenses inched up 2.8% to $54.8 million.

The company incurred interest expenses of $2.4 million compared with $2.2 million in third-quarter fiscal 2018.

During the quarter, the company paid cash dividends of $2.6 million, or $0.075 per share.

AAR Corp. Price, Consensus and EPS Surprise

 

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

Financial Condition

As of Feb 28, 2019, AAR Corp’s cash and cash equivalents amounted to $28.9 million compared with $31.1 million as of May 31, 2018.

As of Feb 28, 2019, net property, plant and equipment expenses were $134.4 million compared with $133.2 million as of May 31, 2018.

As of Feb 28, 2019, total debt decreased to $178.5 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’s HXL fourth-quarter 2018 adjusted earnings of 82 cents per share outpaced the Zacks Consensus Estimate of 80 cents by 2.5%. The company carries a Zacks Rank #2 (Buy).

FLIR Systems Inc.’s FLIR fourth-quarter 2018 adjusted earnings of 62 cents per share surpassed the Zacks Consensus Estimate of 60 cents by 3.3%. The company carries a Zacks Rank #3.

Textron TXT reported fourth-quarter 2018 adjusted earnings of $1.15 per share from continuing operations, which exceeded the Zacks Consensus Estimate of 98 cents by 17.3%. The company has a Zacks Rank #3.

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