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Aug 31, 2023
AAR Corp Q1 2024 Earnings Report
AAR CORP reported a sales increase and adjusted earnings per share for Q1 2024.
Key Takeaways
AAR CORP reported a 23.2% increase in consolidated sales compared to the prior year quarter, with sales reaching $549.7 million. The company experienced a loss from continuing operations of $0.6 million, or $0.02 per diluted share, but adjusted diluted earnings per share from continuing operations were $0.78. The results included net pretax adjustments of $42.5 million, primarily due to a pension settlement and Russian legal charges.
Consolidated sales increased by 23.2% compared to the prior year quarter.
Sales to commercial customers increased 34% over the prior year quarter, representing 71% of consolidated sales.
Adjusted diluted earnings per share from continuing operations were $0.78, compared to $0.61 in the prior year quarter.
Gross profit margin was consistent with the prior year quarter at 18.4%.
Forward Guidance
AAR expects favorable aftermarket trends to continue and anticipates further growth across its parts and services offerings, driven by a strong balance sheet and the ability to execute quickly.
Positive Outlook
- Commercial businesses are capitalizing on favorable aftermarket trends.
- Progress has been made on the integration of Trax.
- The company has a strong balance sheet.
- AAR has the ability to execute quickly.
- AAR has a pipeline of commercial and government opportunities.
Challenges Ahead
- The company disagrees with a Russian court judgment and believes it is unlikely the full judgment will be paid.
- Selling, general, and administrative expenses increased as a percentage of sales.
- Operating margins decreased compared to the prior year quarter.
- Sequentially, the adjusted operating margin decreased due to a shift in the mix of products and services sold.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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