AAR Corp (NYSE:AIR)
AAR CORP. (AIR), a company that provides aviation products and services yesterday reported their fourth quarter and fiscal year 2016 financial results. AAR Corp reported fourth quarter earnings of $0.32 per share which fell short of analyst expectations of $0.43 per share. AAR Corp reported fourth quarter revenues increased 10.2% year over year to $458.2 million which fell short of analyst expectations of $461.53.
AAR CORP. CEO’s Comments
“Fourth quarter performance was in line with our expectations as the Company benefitted from recent investments and strong execution,” said David P. Storch, Chairman, President, and Chief Executive Officer of AAR CORP. “In Aviation Services, fourth quarter sales grew 11.2% from last year to $400.4 million due to strength across the segment, while in Expeditionary Services, sales grew 4.0% to $57.8 million, which included the successful launch of our Falkland Islands search and rescue program. Operating cash flow for the quarter was a robust $46.0 million, nearly four times net income of $12.0 million.” Storch continued, “Fiscal Year 2016 was a solid year for AAR.
I am particularly pleased with our performance in the Aviation Services segment, where our organic growth outpaced the market and where we continue to provide innovative, industry-leading solutions to an expanding base of commercial and government customers. Expeditionary Services disappointed with fewer than expected contract positions at airlift and softer than anticipated mobility product demand. During the year, we returned approximately $30 million to shareholders through dividends and share repurchases.” Commenting on near-term prospects, Storch continued, “We expect continued growth in Aviation Services due to favorable market conditions and a robust opportunity pipeline in that segment. In Expeditionary Services, we expect results to improve slightly at mobility, but we remain cautious about airlift, where headwinds persist in our traditional markets and where efforts to diversify, while already proving successful, are still ramping. Overall, given our strong balance sheet and leadership positions across the portfolio, I am confident in our future prospects.” PR Newswire
AIR Technical Analysis
STX opened trading yesterday at $24.20 which was up from the previous days trading of $24.00. STX closed trading yesterday at $25.04 and crashed down after market to $22.30, equivalent to a 11% decrease from the closing price. Taking a look at the daily chart we can see the last time STX traded below these levels was on June 28th when it traded at $22.06. Taking a closer look at the daily chart we can see that STX has been on an overall upward trend dating back to February 12th when it traded at $18.93. STX has a float of 31.88 million shares and traded 2.90 times the normal daily trading volume on Tuesday. For trading purposes, I would like to see STX open trading on Wednesday below $24.20 and if it does I would be looking to take a short position at the bell. My stop loss would be $0.25 from my entry position fearing anything more than that and the stock would start to fill in the gap down.
Company Profile
AAR CORP. provides products and services to commercial aviation, government, and defense markets worldwide. It operates in two segments, Aviation Services and Expeditionary Services. The Aviation Services segment provides aftermarket support and services; inventory management and distribution services; maintenance, repair and overhaul; and engineering services. This segment sells and leases new, overhauled, and repaired engine and airframe parts and components; and provides inventory supply and management, warranty claim management, and outsourcing programs for engine and airframe parts and components, as well as performance-based logistics programs in support of the U.S. Department of Defense (DoD) and foreign governments. It also offers airframe maintenance inspection and overhaul, painting services, line maintenance, airframe modifications, structural repairs, avionic service and installation, exterior and interior refurbishment, and engineering services and support; repairs and overhauls landing gears, wheels, and brakes for commercial and military aircraft; and sells and leases used commercial aircraft. The Expeditionary Services segment provides products and services supporting the movement of equipment and personnel by the DoD, foreign governments, and non-governmental organizations.
This segment’s expeditionary airlift services provide fixed- and rotary-wing flight operations, transporting personnel, and cargo. It designs, manufactures, and repairs transportation pallets, and various containers and shelters used in support of military and humanitarian tactical deployment activities; and provides engineering, design, and system integration services for command and control systems. The company primarily markets and sells products and services through its employees and sales agents. As of May 31, 2015, the company’s portfolio consisted of three aircraft owned through joint ventures. The company was founded in 1951 and is headquartered in Wood Dale, Illinois.