AAR Corp.(NYSE: AIR) stock lost over 8.2% on December 22nd, 2017 (as of 10:04AM EST; Source: Google finance) on the back of the weak bottom line performance. The group reported a net loss of $22.6 million or $0.66 per share during the quarter, which comprised the impact of the $34.7 million after-tax impairment charge. This was the write-down effect of a certain aircraft and related support parts. But the adjusted net income reached $12.1 million or $0.35 per share, which comprised an operating losses of $1.6 million or $0.03 per share in Expeditionary Services.
On the other hand, AAR reported a sales rise of 6% yoy to $449.7 million in the second quarter of 2018 boosted by their Aviation Services segment. Sales at Aviation Services enhanced 13% yoy to $45 million. But their Expeditionary Services were under pressure. Gross profit in Aviation Services improved $10 million to $66 million during the quarter from operating gains in maintenance services, trading and distribution. Gross profit in Expeditionary Services were hurt by the noncash impairment charges and the contract completions in the period.
Moreover, the group expanded their MRO network by acquiring 2 facilities in Canada enabling them to enhance their relationship with Air Canada and others. The group’s sales growth to commercial customers reached 20%. The group started work on the INL/A contract while won major contracts for USTRANSCOM as expected. The group is focusing on the government-owned, government — contractor operated, or GOCO, service model. They signed a second contract also with Air Canada, 10-year deal covering Air Canada’s A320 family and E-190 fleet. The group won an MRO, a long term contract with Republic airline to perform heavy maintenance on its fleet of 188 Embraer 170 and 175 aircraft.
Meanwhile, the shares of AAR delivered over 22% returns in this year to date. Based on the three analysts’ consensus target price, the stock has an upside of over 10.8% (Source: tipranks.com)