AAR Corp. Profit Declines, Sales Miss Estimates; Stock Down - Update

(RTTNews) - Aviation and aerospace company AAR Corp. (AIR), Tuesday reported a decline in first-quarter profit, due mainly to lower sales at aviation services and technology products, offset by better margins. While quarterly earnings were in line with Wall Street estimates, sales badly missed expectations. Looking ahead, the company reaffirmed its outlook for 2014.

CEO David Storch said the company expect sales in Aviation services segment to recover in the second quarter, and sees some stability in Technology products business.

Investors were unimpressed with the results and shares of the company sank 9 percent in after-hours trading on the New York Stock Exchange.

AAR CORP. provides services such as inventory management and aircraft maintenance, as well as products like cargo systems and containers.

The Wood Dale, Illinois-based company posted quarterly net income of $17.9 million, down from $18.2 million a year ago. On a per share basis, earnings were flat at $0.45.

Sales for the quarter slid to $515 million from $551 million last year. Analysts estimated sales of $542.11 million.

Results were supported by gross margin that was up 10 basis points year-over-year to 16.5 percent, and operating margin climbed to 7.4 percent from 7 percent.

For fiscal year 2014, AAR continues to expect earnings in the range of $2.00 to $2.05 per share on sales of $2.175 billion to $2.225 billion. Analysts estimate earnings of $2.03 per share on sales of $2.21 billion for the year.

Shares of AAR Corp. closed Tuesday at $29.91, up $0.34 or 1.15%, on a volume of 602 thousand shares. In after hours, the stock dropped $2.68 or 8.95% at $27.25.