AAR Earnings Preview

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Investors braced for a bumpy ride ahead of AAR's (NYS: AIR) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Tuesday, March 20. AAR is a diversified provider of products and services to the worldwide aviation and defense industries.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back AAR, with five out of six rating it a buy and the remainder rating it a hold. Analysts like AAR better than competitor Spirit AeroSystems Holdings overall. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $507.4 million in revenue this quarter. That would represent a rise of 12.5% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.49 per share. Estimates range from $0.47 to $0.52.

What our community says:
CAPS All-Stars are solidly supporting the stock, with 95.9% giving it an outperform rating. The community at large is in line with the All-Stars, with 94.1% assigning it a rating of outperform. Despite the majority sentiment in favor of AAR, the stock has a middling CAPS rating of three out of five stars.

Management:
AAR's profit has risen year over year by an average of 49.5% over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Margins are a representation of how efficiently a company captures portions of sales dollars. In the last two quarters, the company saw a decrease in gross margins year over year. Gross margins reflect the total sales revenue retained after costs. See how AAR has been doing for the last four quarters:

Quarter

Q2

Q1

Q4

Q3

Gross Margin

16.2%

15.6%

18.1%

17.2%

Operating Margin

7.2%

7.0%

8.2%

7.8%

Net Margin

3.7%

3.5%

4.5%

4.0%

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Earnings estimates provided by Zacks.

At the time this article was published

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