Post Earnings Coverage as AAR’s Quarterly EPS Surged 31%; Revenue Gained 8.4%

Upcoming AWS Coverage on Boeing

LONDON, UK / ACCESSWIRE / March 31, 2017 / Active Wall St. announces its post-earnings coverage on AAR Corp. (NYSE: AIR). The Company reported its third quarter fiscal 2017 results on March 21, 2017. The airplane maintenance Company met earnings expectations and outperformed revenue expectations. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of AAR Corp.’s competitors within the Aerospace/Defense Products & Services space, The Boeing Co. (NYSE: BA), is estimated to report earnings on April 26, 2017. AWS will be initiating a research report on Boeing following the release of its next earnings results.

Today, AWS is promoting its earnings coverage on AIR; touching on BA. Get our free coverage by signing up to:

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Earnings Reviewed

For the three months ended February 28, 2017, AAR reported consolidated sales of $446.7 million. For Q3 FY16, the Company reported sales of $412.1 million. AAR’s revenue numbers surpassed analysts’ consensus of $422 million.

For Q3 FY17, AAR’s selling, general, and administrative expenses as a percentage of sales were 10.6% compared to 10.5% in the year earlier quarter. During the reported quarter, the Company incurred approximately $1.4 million in legal fees related to its defense of the INL/A Aviation Support Services Contract awarded by the US Department of State (“DoS”) on September 01, 2016 and protested by the incumbent. The US Government Accountability Office reaffirmed the award on December 23, 2016, and the incumbent filed a second protest with the US Court of Federal Claims (“COFC”) on December 28, 2016.

AAR’s net interest expense from continuing operations for Q3 FY17 was $1.4 million compared to $1.6 million last year. Also, during the reported quarter, the Company paid cash dividends of $2.5 million, or $0.075 per share.

AAR reported income from continuing operations of $13.1 million, or $0.38 per diluted share, compared to income from continuing operations of $9.9 million, or $0.29 per diluted share. Earnings, adjusted to account for discontinued operations, were $0.38 per share. The Company’s earnings numbers met market expectations of $0.38 per share.

Sales Numbers

For Q3 FY17, AAR’s sales in Aviation Services increased 9.6% reflecting continued strong performance for the Company’s industry leading supply chain management solutions. Sales in Expeditionary Services also increased 1.6% as volumes continue to recover in the mobility business.

During Q3 FY17, AAR announced significant new business wins in the reported quarter including the award of a comprehensive supply chain management and component repair agreement with Allegiant Air covering their fleet of A320 aircraft and an agreement to provide landing gear overhaul and exchange services for SkyWest’s fleet of Bombardier CRJ aircraft. Subsequent to the end of the reported quarter, the Company signed a five year agreement with India’s largest airline, Interglobe Aviation Limited (IndiGo), to provide landing gear overhaul services on up to 49 full ship sets of A320 landing gear.

AAR’s Q3 FY17 sales to commercial customers represented 68.1% of consolidated sales compared to 60.6% of consolidated sales in Q3 FY16. Sales to government and defense customers represented 31.9% of consolidated sales in the reported quarter compared to 39.4% in the prior year’s same quarter.

Balance Sheet

AAR’s net debt at February 28, 2017, was $162.7 million compared to $145.3 million at February 29, 2016. The net debt increase during the reported quarter was primarily for investments in assets to support the Company’s recently announced long-term flight hour program awards. AAR’s CapEx in Q3 FY17 was $9.1 million. During the reported quarter, the Company paid dividends of $2.5 million, or $0.075 a share, and repurchased approximately 52,000 shares in the open market for $1.7 million. As of the end of the quarter, AAR had $66.1 million remaining available under its Board authorized share repurchase plan.

Stock Performance

At the close of trading session on Thursday, March 30, 2017, AAR Corp.’s share price finished yesterday’s trading session at $33.78, slightly falling 0.38%. A total volume of 121.91 thousand shares exchanged hands. The stock has surged 13.93% and 46.76% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the Company have gained 2.45%. The stock is trading at a PE ratio of 25.17 and has a dividend yield of 0.89%.

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