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AAR Corp. (AIR) to Report Q3 Earnings: What in the Cards?

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AAR Corp. AIR is scheduled to release third-quarter fiscal 2021 results on Mar 23, after market close. In the last reported quarter, the company delivered an earnings surprise of 82.35%.

Moreover, AAR Corp. has a four-quarter earnings surprise of 124.61%, on average.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Factors at Play

AAR Corp.’s overall sales are expected to have suffered in the fiscal third quarter due to the impact of the pandemic on commercial passenger flying activity. Though the company has been witnessing a slight improvement in air travel activities driven by positive developments such as vaccinations since the fiscal second quarter, air passenger volumes are not expected to have reached the pre-COVID level during the soon-to-be-reported quarter. Hence, quarterly top-line performance is likely to have been weak.

AAR Corp. Price and EPS Surprise

AAR Corp. Price and EPS Surprise
AAR Corp. Price and EPS Surprise

AAR Corp. price-eps-surprise | AAR Corp. Quote

Notably, the Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $413.4 million, which indicates a decline of 25.3% from the year-ago quarter’s reported figure.

During the fiscal second quarter, AAR Corp. witnessed lower selling, general and administrative (SG&A) expenses as a result of temporary reductions in compensation and benefits. However, beginning Dec 1, the company restored its compensation and benefits, which in turn must have raised its SG&A expenses in the fiscal third quarter, thereby dragging down its bottom line.

Moreover, poor top line performance is expected to have hurt the company’s quarterly earnings.

The Zacks Consensus Estimate for fiscal third-quarter earnings per share is pegged at 40 cents, which indicates decline of 40.3% from the year-ago quarter’s reported figure.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for AAR Corp. this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But this is not the case here.

Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: AAR Corp. carries a Zacks Rank #3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Defense Releases

Lockheed Martin Corp. LMT reported fourth-quarter 2020 earnings from continuing operations of $6.38 per share, in line with the Zacks Consensus Estimate.

Hexcel Corporation HXL reported fourth-quarter 2020 loss of 18 cents per share, in line with the Zacks Consensus Estimate.

General Dynamics Corporation GD reported fourth-quarter 2020 earnings from continuing operations of $3.49 per share, which missed the Zacks Consensus Estimate of $3.55 by 1.7%.

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