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TheStreet Open House

Why AAR Corporation (AIR) Is Tumbling After Hours

NEW YORK (TheStreet) -- AAR Corporation (AIR) is down in extended trading after posting third-quarter earnings and sales below analysts' estimates.

After the bell, shares had cratered 8.2% to $28.40.

The aviation support company reported third-quarter net income of 45 cents a share, 2 cents short of analysts' estimates compiled by Thomson Reuters.

Revenue of $474.4 million was 8.8% lower year over year and missed forecasts by $51.23 million.

"After strong second-quarter results, we experienced a challenging third quarter in both of our segments," said CEO David P. Storch in a statement.

Its aviation services, which provides supply chain, maintenance, engineering and technical services to the aviation industry, saw a decline in sales from lower maintenance, repair and operations sales. This was due to the completion of a significant engineering services program in the second quarter as well as lower landing gear revenues.

In its technology products segment, which manufactures components and tools for commercial aviation, lower sales of mobility products was partially offset by sales growth in cargo systems.

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TheStreet Ratings team rates AAR CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate AAR CORP (AIR) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

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