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Post Earnings Coverage as AAR's Q2 Earnings Met Expectations

Upcoming AWS Coverage on B/E Aerospace

LONDON, UK / ACCESSWIRE / January 3, 2017 / Active Wall St. announces its post-earnings coverage on AAR Corp. (NYSE: AIR). The Company posted its financial results for the first quarter fiscal 2017 (Q2 FY17) on December 21, 2016. The Wood Dale, Illinois-based Company's diluted earnings per share from continuing operations surged 35% y-o-y, meeting consensus expectations. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of AAR Corp.'s competitors within the Aerospace/Defense Products & Service space, B/E Aerospace, Inc. (NASDAQ: BEAV), is estimated to report earnings on February 07, 2017. AWS will be initiating a research report on B/E Aerospace in the coming days.

Today, AWS is promoting its earnings coverage on AIR; touching on BEAV. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=AIR

http://www.activewallst.com/registration-3/?symbol=BEAV

Earnings Reviewed

For the quarter ended on November 30, 2016, AAR reported sales of $423.8 million compared to sales of $431.5 million recorded at the end of Q2 FY16. The Company's quarterly sales were down by 1.8% y-o-y, primarily attributed to transitions in KC10 and Lake Charles facilities. The Company's quarterly sales numbers also fell short of market estimates of $448.6 million.

The aviation support Company reported net income of $12.1 million, or $0.35 per diluted share, in Q2 FY17 compared to a net income of $8.0 million, or $0.23 per diluted share, in the previous year quarter. Additionally, net income from continuing operations for Q2 FY17 came in at $12.1 million, or $0.35 per diluted share, which was above $9.2 million, or $0.26 per diluted share, reported in Q2 FY16. Wall Street had also expected the Company to report net income from continuing operations of $0.35 per diluted share.

Operational Metrics

In Q2 FY17, AAR reported selling, general, and administrative expenses of $46.3 million versus $43.1 million in the previous year's same quarter. Driven by investments in new business development, AAR's selling, general, and administrative expenses as a percentage of sales improved to 10.9% in Q2 FY16 from 10.0% in the last year's comparable quarter. Furthermore, the Company's operating income for Q2 FY17 came in at $19.9 million which was above the $15.9 million recorded in Q2 FY16.

Segment-Wise

AAR's Aviation Services segment sales for Q2 FY17 came in at $346.7 million compared to $359.6 million reported in Q2 FY16. During the quarter, segment sales benefitted from continued strong demand for aftermarket parts trading and the ramp up of new commercial distribution contracts. However, the growth was more than offset by the impact of the Lake Charles transition and the wind down of the KC10 Program. Furthermore, the segment's gross profit for Q2 FY17 was $56.0 million versus $58.2 million in the prior year's corresponding quarter.

The Company's Expeditionary Services segment sales rose during Q2 FY17 to $77.1 from $71.9 million in Q2 FY16. Additionally, the segment's gross profit surged to $10.2 million in Q2 FY17 from $0.9 million in Q2 FY16.

Cash Matters and Balance Sheet

In Q2 FY17, the Company reported net cash used in operating activities of $1.2 million compared to net cash used in operating activities of $15.9 million in last year's same quarter. AAR had cash and cash equivalents worth $23.0 million on November 30, 2016 versus $31.2 million as on close of books on May 31, 2016. The Company's long-term debt stood at $154.1 million as on November 30, 2016, compared to $136.1 million as May 31, 2016.

As of November 30, 2016, AAR had $67.9 million available under its Board-authorized share repurchase program.

Stock Performance

Last Friday, the stock closed the trading session at $33.05, slipping 1.40% from its previous closing price of $33.52. A total volume of 184.41 thousand shares have exchanged hands. AAR Corp.'s stock price rallied 5.77% in the past three months, 42.68% in the last six months, and 27.25% in the previous twelve months. Furthermore, since the start of the year, shares of the company have surged 27.25%. The stock is trading at a PE ratio of 26.06 and has a dividend yield of 0.91%.

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SOURCE: Active Wall Street

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