AAR Corp. Reports Loss in First Quarter

AAR Corp., a provider of aviation services, has announced a swing to a loss in the fiscal first quarter. The company cited pension-settlement charges and legal expenses in Russia as contributing factors to the loss.

Financial Details

For the three months ended August 31, AAR Corp. reported a net loss of $600,000, or 2 cents per share. This is a significant decrease from the profit of $22.7 million, or 63 cents per share, during the same period last year.

Analysts had predicted earnings per share of 75 cents, highlighting the unexpected nature of the loss. However, when excluding one-time charges, the company's earnings per share amounted to 78 cents.

In terms of revenue, AAR Corp. saw a 23% increase, reaching $549.7 million. This figure surpassed analysts' expectations of $507.9 million.

Sales Breakdown

The company experienced a 23% rise in sales to commercial customers, driven by strong demand for its new and used parts offering. Meanwhile, sales to government customers saw a more modest increase of 3%.

Increased Operating Expenses

Operating expenses for AAR Corp. rose to $74.7 million compared to $50.1 million in the same period last year.

Legal Dispute in Russia

Recently, the Russian Eleventh Arbitration Court of Appeal issued an order demanding that AAR Corp. pay $13 million. The order stems from the acquisition of four engines from VIM-AVIA Airlines by one of AAR Corp.'s subsidiaries. However, AAR Corp. has expressed strong disagreement with the court's judgment and believes it is unlikely that they will be required to pay the full amount.

Overall, these results highlight both positive and negative aspects for AAR Corp., with strong sales growth offset by increased operating expenses and the legal dispute in Russia.