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AAR Q1 Earnings Surpass Estimates, Sales Increase Year Over Year
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AAR Corp. (AIR - Free Report) reported first-quarter fiscal 2025 adjusted earnings of 85 cents per share, which surpassed the Zacks Consensus Estimate of 82 cents by 3.7%. The bottom line improved 9% from the year-ago quarter’s level.
The company reported GAAP earnings per share (EPS) of 50 cents against a loss of 2 cents in the prior-year quarter.
The year-over-year improvement in the bottom line can be attributed to improved sales growth as well as operating income.
In the quarter under review, AAR generated net sales of $661.7 million. The reported figure beat the Zacks Consensus Estimate of $646 million by 2.5% and increased 20.4% from $549.7 million recorded in the year-ago quarter.
The year-over-year improvement can be attributed to the acquisition of the Product Support business and organic growth.
Segment Details
In the fiscal first quarter, sales in the Parts Supply segment totaled $249.7 million, up 5.4% year over year.
Repair & engineering reported sales of $217.6 million, up 58.3% from the prior-year period’s level.
Integrated solutions sales amounted to $168.9 million, up 8.1% from the year-ago quarter’s reported numbers.
Expeditionary Services recorded sales of $25.5 million, up 33.5% year over year.
Operational Update
The company’s gross profit margin deteriorated 70 basis points to 17.7% from the prior-year quarter’s level.
AIR’s adjusted operating margin increased from 7.3% to 9.1%, driven by a favorable contribution from the recently acquired Product Support business as well as improved execution.
Selling, general and administrative expenses amounted to $75.9 million compared with $74.7 million a year ago.
Net interest expense for the quarter totaled $18.3 million compared with $5.4 million in the year-ago period.
Financial Details
As of Aug 31, 2024, AAR’s cash and cash equivalents amounted to $49.3 million compared with $85.8 million as of May 31, 2024.
The company’s long-term debt totaled $981 million as of Aug. 31, 2024, down from $985.4 million as of May 31, 2024.
As of Aug. 31, 2024, net cash outflow from operating activities amounted to $18.6 million compared with $18.7 million in the year-ago period.
Northrop Grumman Corporation (NOC - Free Report) is set to report third-quarter 2024 results on Oct. 24, before market open. The Zacks Consensus Estimate for earnings is pegged at $6.05 per share, which indicates an improvement of 4.7% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for sales is pegged at $10.23 billion, which implies an increase of 4.7% from the prior-year quarter’s reported actuals.
Lockheed Martin Corporation (LMT - Free Report) is set to report third-quarter 2024 results soon. The Zacks Consensus Estimate for earnings is pegged at $6.40 per share, which indicates a decline of 5.5% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for sales is pegged at $17.45 billion, which implies an increase of 3.4% from the prior-year quarter’s reported actuals.
General Dynamics Corporation (GD - Free Report) is set to report third-quarter 2024 results soon. The Zacks Consensus Estimate for earnings is pegged at $3.76 per share, which indicates an improvement of 23.7% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for sales is pegged at $12.2 billion, which implies growth of 15.5% year over year.
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AAR Q1 Earnings Surpass Estimates, Sales Increase Year Over Year
AAR Corp. (AIR - Free Report) reported first-quarter fiscal 2025 adjusted earnings of 85 cents per share, which surpassed the Zacks Consensus Estimate of 82 cents by 3.7%. The bottom line improved 9% from the year-ago quarter’s level.
The company reported GAAP earnings per share (EPS) of 50 cents against a loss of 2 cents in the prior-year quarter.
The year-over-year improvement in the bottom line can be attributed to improved sales growth as well as operating income.
AAR Corp. Price, Consensus and EPS Surprise
AAR Corp. price-consensus-eps-surprise-chart | AAR Corp. Quote
Total Sales
In the quarter under review, AAR generated net sales of $661.7 million. The reported figure beat the Zacks Consensus Estimate of $646 million by 2.5% and increased 20.4% from $549.7 million recorded in the year-ago quarter.
The year-over-year improvement can be attributed to the acquisition of the Product Support business and organic growth.
Segment Details
In the fiscal first quarter, sales in the Parts Supply segment totaled $249.7 million, up 5.4% year over year.
Repair & engineering reported sales of $217.6 million, up 58.3% from the prior-year period’s level.
Integrated solutions sales amounted to $168.9 million, up 8.1% from the year-ago quarter’s reported numbers.
Expeditionary Services recorded sales of $25.5 million, up 33.5% year over year.
Operational Update
The company’s gross profit margin deteriorated 70 basis points to 17.7% from the prior-year quarter’s level.
AIR’s adjusted operating margin increased from 7.3% to 9.1%, driven by a favorable contribution from the recently acquired Product Support business as well as improved execution.
Selling, general and administrative expenses amounted to $75.9 million compared with $74.7 million a year ago.
Net interest expense for the quarter totaled $18.3 million compared with $5.4 million in the year-ago period.
Financial Details
As of Aug 31, 2024, AAR’s cash and cash equivalents amounted to $49.3 million compared with $85.8 million as of May 31, 2024.
The company’s long-term debt totaled $981 million as of Aug. 31, 2024, down from $985.4 million as of May 31, 2024.
As of Aug. 31, 2024, net cash outflow from operating activities amounted to $18.6 million compared with $18.7 million in the year-ago period.
Zacks Rank
AAR currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Q3 Defense Releases
Northrop Grumman Corporation (NOC - Free Report) is set to report third-quarter 2024 results on Oct. 24, before market open. The Zacks Consensus Estimate for earnings is pegged at $6.05 per share, which indicates an improvement of 4.7% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for sales is pegged at $10.23 billion, which implies an increase of 4.7% from the prior-year quarter’s reported actuals.
Lockheed Martin Corporation (LMT - Free Report) is set to report third-quarter 2024 results soon. The Zacks Consensus Estimate for earnings is pegged at $6.40 per share, which indicates a decline of 5.5% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for sales is pegged at $17.45 billion, which implies an increase of 3.4% from the prior-year quarter’s reported actuals.
General Dynamics Corporation (GD - Free Report) is set to report third-quarter 2024 results soon. The Zacks Consensus Estimate for earnings is pegged at $3.76 per share, which indicates an improvement of 23.7% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for sales is pegged at $12.2 billion, which implies growth of 15.5% year over year.