), Illinois-based aerospace/defense products and services
supplier, surpassed its earnings expectation in fiscal 2013
second-quarter with a decent revenue increase, driven by its
recent acquisitions. AAR is also in the process of expanding its
operations in the recently opened Duluth MRO facility.
Let's take a brief look at the company's financials in the
recently reported quarter:
A world leader in aftermarket products and services to the
global aerospace industry, AAR Corp. posted a 2.3% increase in
earnings year over year to settle at 44 cents per share. It also
surpassed the Zacks Consensus Estimate of 41 cents by 7.3%.
Revenue for the reported quarter increased 6.4% to $512.8
million from $482.0 million in the year-ago comparable quarter.
The results, however, fell short of the Zacks Consensus Estimate
of $550.0 million by 7.25%. Revenue increase was primarily driven
by acquisitions as well as the company's airlift business,
partially offset by lower logistics activity.
Read our full coverage on this earnings report:
AIR Beats Est, Rev Lags in 2Q13
Earnings Estimate Revisions - Overview
Fiscal earnings estimates have moved up since the earnings
release, suggesting that analysts are bullish about the long-term
performance of the company. We take a look at the earnings
Agreement of Estimate Revisions
In the last seven days, two out of four estimates have moved
up for the third quarter of fiscal 2013. A similar trend followed
for fiscal 2013 and 2014, where two out of four estimates were
revised upwards. This indicates that the analysts are fairly
bullish on the stock for the coming quarter as well as the
Magnitude of Estimate Revisions
Earnings estimate for the third quarter of fiscal 2013
increased by 2 cents in the last seven days, reaching 44 cents.
For fiscal 2013, earnings estimates increased from $1.77 to
$1.81, while increasing from $2.00 to $2.06 for fiscal 2014.
The Zacks Consensus Estimates represents a year-over-year
growth of 6.7% for third quarter, 5.9% for 2013 and 13.5% for
The company is expected to perform well in the future with
strong sales growth, mainly from the Commercial sales segment
coupled with contribution from acquisitions. AAR has been
incessantly trying to focus on the core business, disposing of
the non-core assets in the meantime. The cost reduction
activities are in place, leading to the possibility of higher
earnings. We continue to expect the company to have healthy
earnings growth along with an increase in revenues.
We maintain an Outperform recommendation on the stock.
Currently, AIR has a Zacks #3 Rank, which translates into a
short-term (1-3 months) Hold rating. The company's prime
Lockheed Martin Corporation
) have a Zacks #3 rating.
About Zacks Earnings Scorecard
As a PhD from MIT, Len Zacks proved over 30 years ago that
earnings estimate revisions are the most powerful force
impacting stock prices. He turned this ground breaking
discovery into two of the most celebrating stock rating systems
in use today. The Zacks Rank for stock trading in a 1 to 3
month time horizon and the Zacks Recommendation for long-term
investing (6+ months). These "Earnings Estimate Scorecard"
articles help analyze the important aspects of estimate
revisions for each stock after their quarterly earnings
announcements. Learn more about earnings estimates and our
proven stock ratings at http://www.zacks.com/education/
AAR CORP (AIR): Free Stock Analysis Report
BOEING CO (BA): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis
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