NYSE$AIR

Aar Corp · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Reported third quarter fiscal year 2022 results with increased consolidated sales and income from continuing operations.

AAR Corp reported a 10% increase in consolidated sales to $452.2 million and income from continuing operations of $22.6 million, or $0.63 per diluted share, for the third quarter of Fiscal Year 2022. Adjusted diluted earnings per share were $0.63 compared to $0.37 in the prior year. Consolidated sales to commercial customers increased 28%, while sales to government customers decreased 8%.

  • Consolidated third quarter sales increased 10% over the prior year quarter.
  • Consolidated sales to commercial customers increased 28% due to the recovery in the commercial market.
  • Consolidated sales to government customers decreased 8% primarily related to program activity and delays in pallet orders.
  • Adjusted operating margin increased from 5.0% to 6.7% due to improved operating efficiency and the recovery in commercial sales.

Headline financials

Total Revenue

$452M

Previous: $410M+10.2%
EPS (adj)

$0.63

Previous: $0.37+70.3%
Capital Expenditures

-$10.2M

Previous: -$8.6M-18.6%
Free Cash Flow

$12.3M

Previous: $19.5M-36.9%
Net Income

$22.5M

Previous: $28.1M-19.9%
Operating Income

$29.8M

Previous: $65M-54.2%
Gross Profit

$80.4M

Previous: $86M-6.5%
Cash & Equivalents

$40.6M

Previous: $99.2M-59.1%
Total Assets

$1.55B

Previous: $1.64B-5.5%
Stock-Based Comp

$1.1M

Previous: $2.3M-52.2%

Revenue & EPS history

AAR Corp · Revenue · Quarterly

$452M

Q3 2022+10.2%vs Q3 2021
Beat estimate in 12 of 16 quarters(75%)
ActualEstimate

Revenue by segment

AAR Corp · $54.3M total across 1 segment · Q4 2020

  • Expeditionary Services
    $54.3M

Forward guidance

The company expects continued margin improvement as the industry recovers, driven by actions taken early in the pandemic. They anticipate a continued recovery in commercial sales and expect their improved operating performance and strong balance sheet to generate shareholder value.

Tailwinds

  • Optimism about the recovering demand for business and leisure travel
  • Expectation that this momentum will continue
  • Continued actions to better position the company for margin improvement as the industry recovers
  • Expectation of seeing a continued recovery in commercial sales
  • Expectation that improved operating performance combined with the strength of the balance sheet will allow the company to continue to generate shareholder value

Headwinds

  • Factors that adversely affect the commercial aviation industry
  • The continued impact of the COVID-19 pandemic on air travel, worldwide commercial activity and our and our customers’ ability to source parts and components
  • A reduction in the level of sales to the branches, agencies and departments of the U.S. government and their contractors
  • Cost overruns and losses on fixed-price contracts
  • Nonperformance by subcontractors or suppliers

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q3 2022

Historical avgQ3 2022

+0.5%

Avg return

Earnings day

+1.0%

Avg return

5 days after

+1.9%

Avg return

30 days after

57%

39 / 68 earnings

Positive

+24.5%

Q3 2020

Best reaction

-16.4%

Q3 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q3 2026-3.1%+2.5%
Q2 2026+0.9%+9.8%+26.4%
Q1 2026+4.3%+12.2%+10.4%
Q4 2025+2.0%+9.8%+2.7%
Q3 2025-16.4%-15.7%-22.7%
Q2 2025+8.0%+9.0%+9.5%
Q1 2025-4.7%-6.6%-11.2%
Q4 2024-13.2%-8.8%-14.9%
Q3 2024-6.6%-6.8%-0.4%
Q2 2024-10.4%-10.1%-17.1%
Q1 2024-1.1%-2.9%-5.4%
Q4 2023+0.6%+2.7%+0.6%
Q3 2023+6.6%+5.4%+5.1%
Q2 2023-3.3%-3.8%+7.7%
Q1 2023-9.3%-10.1%+9.7%
Q4 2022-8.2%-6.1%+3.4%
Q3 2022+9.1%+10.3%+7.2%
Q2 2022+7.5%+8.7%+15.4%
Q1 2022+1.7%-0.3%+8.1%
Q4 2021+9.1%+6.3%-6.2%
Q3 2021-2.1%+3.1%-4.2%
Q2 2021+2.6%+4.6%+11.4%
Q1 2021+11.8%+9.3%+17.7%
Q4 2020+4.5%-1.1%+5.8%
Q3 2020+24.5%+36.2%+25.4%
Q2 2020+14.9%+6.2%+1.4%
Q1 2020-5.9%-6.2%-7.4%
Q4 2019+9.6%+5.9%+5.3%
Q3 2019-5.6%-7.3%-6.3%
Q2 2019-1.6%-9.0%-6.0%
Q1 2019+8.1%+6.4%+1.0%
Q4 2018-10.5%-5.1%-3.1%
Q3 2018+2.1%-2.1%+6.1%
Q2 2018-6.6%-6.7%-2.9%
Q1 2018+6.4%+1.1%+5.3%
Q4 2017+5.6%+6.7%+0.1%
Q3 2017+0.5%-0.3%+1.1%
Q2 2017-9.0%-9.1%-14.8%
Q1 2017+5.8%+4.7%+12.5%
Q4 2016-5.3%-2.8%-1.3%
Q3 2016+3.7%
Q2 2016+5.2%
Q1 2016-11.6%
Q4 2015+3.6%
Q3 2015-6.8%
Q2 2015-3.3%
Q1 2015-11.5%
Q4 2014+7.4%
Q3 2014-7.4%
Q2 2014-4.4%
Q1 2014-8.2%
Q4 2013-0.9%
Q3 2013+8.1%
Q2 2013+18.0%
Q1 2013-5.6%
Q4 2012+9.7%
Q3 2012-1.5%
Q2 2012+1.1%
Q1 2012-2.6%
Q4 2009+2.2%
Q4 2011+2.2%
Q3 2011+0.3%
Q3 2010+0.3%
Q2 2010+0.4%
Q2 2011+0.4%
Q1 2010+4.3%
Q4 2010+4.3%
Q1 2011+4.3%

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