AAR Corp (AIR)
Pretax margin
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before tax but after interest (EBT) | US$ in thousands | 38,900 | 58,300 | 121,200 | 105,100 | 64,500 |
| Revenue | US$ in thousands | 2,780,500 | 2,318,900 | 1,990,500 | 1,820,000 | 1,652,300 |
| Pretax margin | 1.40% | 2.51% | 6.09% | 5.77% | 3.90% |
May 31, 2025 calculation
Pretax margin = EBT ÷ Revenue
= $38,900K ÷ $2,780,500K
= 1.40%
The pretax margin of AAR Corp has demonstrated notable fluctuations over the specified period. As of May 31, 2021, the pretax margin stood at 3.90%, indicating a relatively modest profitability before taxes. This margin increased significantly by May 31, 2022, reaching 5.77%, reflecting an improvement in operational efficiency or higher margins on revenue-generating activities. The upward trend continued into May 31, 2023, with the pretax margin rising slightly to 6.09%, suggesting sustained or enhanced profitability levels during that year.
However, a decline is observed in the subsequent year, with the pretax margin decreasing markedly to 2.51% as of May 31, 2024. This shift signals a reduction in profitability before taxes, potentially driven by increased costs, lower revenue margins, or other operational challenges. The trend persists into May 31, 2025, with a further decrease to 1.40%. This continued decline indicates that AAR Corp faced ongoing pressures impacting its pretax profitability, culminating in a significantly narrower margin compared to previous years.
Overall, the data depicts a period of initial growth in pretax margins, followed by a pronounced contraction in recent years, which warrants further investigation into the underlying causes such as changes in revenue, cost structure, or market conditions affecting the company's pretax profitability.