Why Is AAR (AIR) Down 0.4% Since Last Earnings Report?

It has been about a month since the last earnings report for AAR (AIR). Shares have lost about 0.4% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is AAR due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for AAR Corp. before we dive into how investors and analysts have reacted as of late.AAR Q1 Earnings Beat Estimates, Sales Increase Year Over YearAAR Corp. reported first-quarter fiscal 2026 adjusted earnings of $1.08 per share, which topped the Zacks Consensus Estimate of 98 cents by 10.2%. The bottom line also improved 27.1% from the year-ago quarter’s level of 85 cents.The company reported GAAP earnings of 95 cents per share compared with 50 cents in the prior-year quarter.The year-over-year improvement in the bottom line can be attributed to strong sales growth and lower selling, general and administrative expenses.AIR’s Total SalesIn the quarter under review, AAR generated net sales of $739.6 million. The reported figure beat the Zacks Consensus Estimate of $686 million by 7.9%. The figure also increased 11.8% from $661.7 million recorded in the year-ago quarter.The year-over-year improvement can be attributed to the double-digit growth across both aftermarket parts trading and new parts distribution within the company’s Parts Supply segment.AAR: Segment DetailsIn the fiscal first quarter, sales in the Parts Supply segment totaled $317.8 million, up 27.3% year over year.Repair & engineering reported sales of $214.6 million, down 1.4% from the prior-year period’s level.Integrated solutions sales amounted to $185 million, up 9.5% from the year-ago quarter’s reported number.Expeditionary Services recorded sales of $22.2 million, down 12.9% year over year.AIR’s Operational UpdateAIR’s adjusted operating margin increased from 9.1% to 9.7%, driven by higher volume and profitability in new parts distribution activities.Selling, general and administrative expenses amounted to $71.2 million compared with $75.9 million a year ago.Net interest expenses for the quarter totaled $18.5 million compared with $18.3 million in the year-ago period.Financial Details of AARAs of Aug. 31, 2025, AAR’s cash and cash equivalents amounted to $80 million compared with $96.5 million as of May 31, 2025.The company’s long-term debt totaled $1.02 billion as of Aug. 31, 2025, up from $0.97 billion as of May 31, 2025.In the first three months of fiscal 2026, net cash used from operating activities was $44.9 million compared with net cash used of $18.6 million in the year-ago period.How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a downward trend in estimates review.The consensus estimate has shifted -5.16% due to these changes.VGM ScoresAt this time, AAR has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Following the exact same course, the stock has a score of C on the value side, putting it in the middle 20% for value investors.Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Interestingly, AAR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AAR Corp. (AIR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks