Global aviation services provider AAR Corp. (AIR) has reported excellent financial results for the fiscal first quarter ended August 31. The company offers aerospace and defense aftermarket solutions and has operations in more than 20 nations.
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Adjusted earnings per share (EPS) jumped 206% year-over-year to $0.52, surpassing analysts’ expectations of $0.48. Sales increased 14% to $455.1 million, beating the Street’s estimate of $438.3 million.
Sales to commercial customers grew 53% year-over-year due to the recovery in the commercial market after the COVID-19 pandemic. Sales to government customers dipped 17% as the year-ago quarter included significant activity across the company’s U.S. Air Force and U.S. Marine Corps C-40 pallet contracts.
The President and CEO of AAR, John M. Holmes, said, “We had a very strong start to the year across our commercial business. We saw robust performance in our MRO operations and continued recovery in our parts activities. We also secured new government and commercial program contract awards while adding another exclusive new parts distribution agreement, which we expect will contribute to our long-term growth.”
The company’s shares closed 2.8% higher at $33.24 on Thursday. (See AAR stock chart on TipRanks)
Two months ago, Canaccord Genuity analyst Kenneth Herbert reiterated a Buy rating on the stock with a price target of $48 (44.4% upside potential). The analyst said, “The USM business represents significant upside potential but the timing of the recovery is difficult to predict.”
Overall, the stock has a Moderate consensus rating based on 2 Buys. The average AAR price target of $50 implies 50.4% upside potential. Shares have gained 86.4% over the past year.
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