The 10-second takeaway
For the quarter ended Nov. 30 (Q2), AAR beat slightly on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue increased, and earnings per share grew slightly.
Gross margins shrank, operating margins were steady, and net margins dropped.
AAR chalked up revenue of $476 million. The nine analysts polled by S&P Capital IQ predicted revenue of $471 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.45. The nine earnings estimates compiled by S&P Capital IQ averaged $0.45 per share on the same basis. GAAP EPS of $0.43 for Q2 were 1.6% higher than the prior-year quarter's $0.42 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 16.2%, 40 basis points worse than the prior-year quarter. Operating margin was 7.1%, about the same as the prior-year quarter. Net margin was 3.7%, 10 basis points worse than the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods.
What does the future hold?
Next quarter's average estimate for revenue is $511 million. On the bottom line, the average EPS estimate is $0.49. (There are nine revenue estimates and nine EPS estimates.)
For the full year ending 2012, the average estimate for revenue is $2.1 billion. The average EPS estimate is $2.12. (There are nine revenue estimates and eight EPS estimates.)
The stock has a three-star rating at Motley Fool CAPS, with 288 members out of 305 rating the stock outperform, and 17 members rating it underperform. Among 97 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 92 give AAR a green thumbs-up, and five give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on AAR is buy, with an average price target of $28.44.
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