Aircraft component and systems supplier AerSale (ASLE -0.39%) reported a stronger-than-expected quarter, but the company isn't reporting much traction yet for one of its most closely watched products. Shares of AerSale initially traded up 25% post-earnings before falling back to up 8% as of 2 p.m. ET Thursday.

Strong core sales, but still waiting on AerAware

AerSale's core business is maintaining and selling used airplanes, engines, and aerospace parts. The company earned $0.11 per share in the quarter on sales of $90.5 million, beating Wall Street's estimate of $0.04 per share in profit on revenue of $85 million, thanks to strong demand from airlines trying to get more use of their existing fleets.

Revenue was up 15% year over year, and generally accepted accounting principles (GAAP) net income grew to $6.3 million from $5,000 in the prior-year period.

"We are off to a good start in the first quarter of 2024, underscored by higher feedstock purchases in 2023 that drove a greater level of sales," CEO Nicolas Finazzo said. "Our [maintenance, repair, and operations] facilities are benefiting from robust demand as airlines are operating at elevated capacity levels."

But the company did not report progress selling its AerAware vision system, which was approved for use in certain older Boeing airplanes late last year. Investors have high hopes for AerAware as a driver of future revenue growth and margin expansion.

AerSale is yet to receive an initial order for AerAware, but it does have proposals out to five airlines and another three that have expressed some interest.

Is AerSale stock a buy

The core business is a solid, if unremarkable one, and AerSale has reasonable visibility to suggest that business will continue to deliver reliable returns. But for investors this story has been very much about AerAware, so the lack of sales will not go unnoticed.

Finazzo told analysts he believes product complexity, including the need to train pilots, is responsible for the lack of AerAware orders, and not a lack of interest or issues over pricing.

If he is correct, those are issues that can be resolved over time. But there are also other products on the horizon that could eat into pricing power or take market share over time.

The jury is still out on that product. For investors, it would be wise to take a hard look at that core parts business and figure out if it is an asset worth owning regardless of whether AerAware takes off.