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Why AAR's Shares Dropped Today

By Travis Hoium - Sep 25, 2013 at 4:17PM

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Is this meaningful or just another movement?

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: Aviation service company AAR's (AIR 0.00%) shares dropped 10% today after the company released fiscal-first-quarter earnings.

So what: Revenue fell 6.5% from a year ago to $514.5 million, well below estimates of $538 million from Wall Street. That clearly overshadowed a strong bottom line where earnings of $0.45 per share beat estimates by a penny.  

Now what: A 10.5% decline in SG&A expenses helped keep net income up but the revenue decline is a big concern at the moment. Management does anticipate a return to growth in the second quarter as aviation services revenue picks up. Overall, management expects earnings of $2.00-$2.05 this year, which would be solid growth from a year ago, despite the bad quarterly revenue.

Interested in more info on AAR? Add it to your watchlist by clicking here.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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