WOOD DALE, Ill. - AAR CORP. (NYSE: NYSE:AIR), a prominent aviation services provider, announced a slight earnings beat in its third-quarter fiscal year 2024 results, with adjusted diluted earnings per share (EPS) from continuing operations reaching $0.85, marginally surpassing the analyst consensus of $0.84. Still, the company's stock price edged down by 0.09% as revenue fell short of expectations, coming in at $567 million against the consensus estimate of $569.66 million.
The company's third-quarter sales showed a robust 9% increase compared to the same period last year, driven by an 18% surge in sales to commercial customers. This growth is attributed to strong demand for AAR's Parts Supply offerings and Maintenance, Repair, and Overhaul (MRO) services, as well as increased volumes in commercial programs activities. Despite this, sales to government customers declined by 7%.
John M. Holmes, Chairman, President, and Chief Executive Officer of AAR CORP., commented on the results, highlighting the company's success in capitalizing on the strong demand within the commercial sector. Holmes expressed confidence in the continued high demand for the company's services due to the extended life and utilization of current-generation aircraft.
The company's gross profit margin improved from 18.1% in the prior year's quarter to 19.4% in the current quarter, mainly due to enhanced operating efficiency on higher sales volumes. Adjusted operating margin also saw an increase from 7.6% to 8.3% year-over-year (YoY), reflecting the growth in commercial sales and improved profitability in the Parts Supply and Repair & Engineering segments.
AAR also completed a significant acquisition during the quarter, purchasing Triumph Group (NYSE:TGI)'s Product Support business for $725 million. This strategic move is expected to scale the company's repair capabilities and expand its Asia-Pacific footprint.
Looking ahead, AAR did not provide specific financial guidance for the coming quarters, but Holmes's optimistic outlook suggests a positive trajectory for the company's growth and margin expansion, despite the slight stock price dip following the earnings release.
Investors and analysts will continue to monitor AAR's performance as it integrates its recent acquisition and capitalizes on the robust demand in the commercial aviation sector.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.