The 10-second takeaway
For the quarter ended May 31 (Q4), AAR beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped slightly. Non-GAAP earnings per share grew. GAAP earnings per share dropped significantly.
Margins dropped across the board.
AAR logged revenue of $553.8 million. The seven analysts polled by S&P Capital IQ expected a top line of $518.1 million on the same basis. GAAP reported sales were 1.7% lower than the prior-year quarter's $563.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at $0.50. The seven earnings estimates compiled by S&P Capital IQ forecast $0.45 per share. Non-GAAP EPS of $0.50 for Q4 were 11% higher than the prior-year quarter's $0.45 per share. GAAP EPS of $0.01 for Q4 were 97% lower than the prior-year quarter's $0.32 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 10.9%, 350 basis points worse than the prior-year quarter. Operating margin was 1.4%, 400 basis points worse than the prior-year quarter. Net margin was 0.1%, 220 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $524.3 million. On the bottom line, the average EPS estimate is $0.45.
Next year's average estimate for revenue is $2.15 billion. The average EPS estimate is $2.04.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 293 members out of 313 rating the stock outperform, and 20 members rating it underperform. Among 96 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 94 give AAR a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on AAR is outperform, with an average price target of $21.67.
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