Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of AAR (NYSE:AIR), a product and service supplier to the aviation, government, and defense industries, flew higher by as much as 11% after reporting better-than-expected third-quarter earnings results.

So what: For the quarter, AAR reported EPS of $0.46 despite a nearly 3% drop in year-over-year revenue to $520.2 million. Wall Street had been anticipating only a $0.43 profit per share from AAR on just $516.5 million in revenue. Aviation services provided the biggest pop, with revenue increasing 9% while sales in its technology products segment sank a dismal 30%. Looking ahead, AAR’s guidance calls for $1.78-$1.82 in EPS on approximately $2.15 billion revenue. This is markedly better than the $1.70 and $2.12 billion the Street had been forecasting.

Now what: Once again, the demise of companies that rely on contracts from the government has been overstated, and AAR is a prime example. However, I can't overlook the simple fact that budget cuts will make growth in this area of AAR's business difficult. With that, I could see some very modest upside left in AAR shares, but I wouldn't be too aggressive in chasing them higher.

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