AAR (AIR) Down 6.6% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for AAR (AIR). Shares have lost about 6.6% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is AAR due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. AAR Q1 Earnings Surpass Estimates, Sales Increase Year Over YearAAR Corp. 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.Total SalesIn 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 DetailsIn 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 UpdateThe 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 DetailsAs 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.How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended downward during the past month.The consensus estimate has shifted -9.34% due to these changes.VGM ScoresCurrently, AAR has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise AAR has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AAR Corp. (AIR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks