AAR (AIR) Q3 Earnings Surpass Estimates, Sales Rise Y/Y

Core Viewpoint - AAR Corp. reported strong third-quarter fiscal 2024 adjusted earnings, exceeding estimates, driven by increased sales in various segments despite a slight miss in total sales compared to consensus estimates [1][2]. Financial Performance - Adjusted earnings per share (EPS) for the third quarter were 85 cents, surpassing the Zacks Consensus Estimate of 84 cents by 1.2% and improving 13.3% from the previous year [1]. - Total net sales reached $567.3 million, slightly missing the Zacks Consensus Estimate of $568 million by 0.1%, but reflecting an 8.9% increase from $521.1 million in the year-ago quarter [2]. Segment Performance - Parts Supply segment sales totaled $242.3 million, up 6.5% year over year [3]. - Repair & Engineering segment reported sales of $140.8 million, a 10% increase from the prior-year period [3]. - Integrated Solutions sales were $165.5 million, up 15.3% from the year-ago period [3]. - Expeditionary Services recorded sales of $18.7 million, down 15% from the previous year [3]. Operational Metrics - Gross profit margin increased by 130 basis points to 19.4% from 18.1% in the prior-year quarter, attributed to improved operating efficiency [4]. - Adjusted operating margin rose from 7.6% to 8.3%, driven by growth in commercial sales [4]. - Selling, general and administrative expenses were $77 million for the quarter [4]. - Net interest expense increased to $11.3 million from $3.5 million in the year-ago period [4]. Financial Position - As of February 29, 2024, cash and cash equivalents were $69.2 million, slightly up from $68.4 million as of May 31, 2023 [5]. - Long-term debt increased to $274.7 million from $269.7 million as of May 31, 2023 [5].