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May 31, 2021
AAR Corp Q4 2021 Earnings Report
AAR Corp reported Q4 2021 results with increased sales and improved profitability.
Key Takeaways
AAR Corp reported a 5% increase in consolidated sales to $437.6 million and income from continuing operations of $14.7 million, or $0.41 per diluted share, compared to a loss of $15.0 million, or a loss of $0.43 per diluted share in the prior year quarter. Adjusted diluted earnings per share from continuing operations in the fourth quarter of Fiscal Year 2021 were $0.47 compared to $0.26 in the fourth quarter of the prior year.
Consolidated fourth quarter sales increased 5% from the prior year quarter.
Consolidated sales to commercial customers increased 3% due to the recovery in the commercial market.
Consolidated sales to government customers increased 7% due to strong performance across global government contracts.
Gross profit margin increased from 8.7% to 16.4% due to cost reduction and increased operating efficiency.
AAR Corp
AAR Corp
Forward Guidance
The company anticipates continued investment in new and aftermarket parts activities, expansion of their digital offering, pursuing more government business and capitalizing on other opportunities as the market continues to recover.
Positive Outlook
- Continued strong performance across global government contracts and growth in government business
- Increasing levels of domestic business travel
- Optimism about the recovery in international markets when restrictions are lifted as vaccines are further deployed
- Continued strong performance and a full pipeline of opportunities in government end markets
- Focus on managing working capital to generate cash flow
Challenges Ahead
- Uncertainty about the pace of recovery in international markets
- Potential adverse effects from factors impacting the commercial aviation industry
- Continued impact of the COVID-19 pandemic on air travel and the ability to source parts and components
- Risk of reduction in sales to U.S. government branches, agencies, and departments
- Potential non-compliance with laws and regulations related to government contracts