AAR (AIR) Announces First Quarter Fiscal Year 2026 Earnings Results.

AAR Corp. (AIR) today announced its financial results for the most recent quarter, revealing a mixed performance. The company reported earnings per share of $0.95, slightly missing analysts’ expectations of $0.98. However, AAR Corp. exceeded revenue estimates, posting $739.6 million, which is a notable increase compared to the expected $689.3 million. This revenue beat reflects a strong demand for the company’s services in the aerospace and defense sectors.

Key Highlights:

• Sales increased by 12% to $740 million compared to Q1 FY2025.
• GAAP EPS of $0.95 and adjusted diluted EPS of $1.08, up 27%.
• GAAP net income rose to $34 million.
• Adjusted EBITDA increased by 18% to $87 million, with margins expanding to 11.7%.
• Parts Supply segment saw a 27% increase in sales, driving organic growth of 17%.
• Investments made in Parts Supply and acquisition of Aerostrat to enhance Trax software capabilities.
• Anticipated continued sales growth across all segments, with high demand for Parts Supply offerings.

In the first quarter of fiscal year 2026, AAR CORP. reported strong financial results, with sales reaching $740 million, a 12% increase from the previous year. The company’s Chairman, President, and CEO, John M. Holmes, highlighted the significant growth across all segments, particularly in Parts Supply, which saw a remarkable 27% increase in sales. This growth was attributed to exceptional performance in new parts distribution activities, which contributed to an adjusted EBITDA of $87 million, reflecting an 18% increase and improved margins.

Holmes emphasized the company’s strategic focus on supporting the rapid growth in Parts Supply and noted that investments made during the quarter, including the acquisition of Aerostrat, are expected to drive profitable growth and positive cash flows moving forward. He expressed confidence in the company’s financial position and anticipated continued demand for their offerings, stating, “We remain focused on our strategic objectives… Demand for our Parts Supply offerings remains very high.” The company also reported a multi-year exclusive defense agreement and a new contract with the Defense Logistics Agency, further solidifying its growth trajectory.

AAR Corp. (AIR) has experienced a notable uptick in its stock price, with a 3.32% increase over the past week and a robust 13.89% rise over the last three months. This upward momentum reflects a growing investor confidence, despite the company’s troubling price-to-earnings ratio of -458.18, indicating significant challenges in profitability. The two-year compound annual growth rate (CAGR) for earnings per share is concerning at -53.80%, suggesting that the company has struggled to maintain earnings growth. However, on a more positive note, AAR Corp. has achieved a revenue CAGR of 18.19% over the same period, highlighting its ability to expand sales even amidst operational difficulties. The stock’s performance over the past year, up 11%, suggests that investors are cautiously optimistic about the company’s future prospects. As AAR Corp. navigates these financial metrics, it will be crucial for the company to address its profitability issues to sustain investor interest and further enhance its market position.

AAR Corp. provides products and services to commercial aviation, government, and defense markets worldwide. The Aviation Services segment offers aftermarket support and services; inventory management and distribution services; and maintenance, repair, and overhaul, as well as engineering services. This segment also sells and leases new, overhauled, and repaired engine and airframe parts, and components; and provides inventory and repair programs, warranty claim management, and outsourcing programs for engine and airframe parts and components, as well as performance-based supply chain logistics programs in support of the U.S. department of defense and foreign governments. In addition, it offers airframe inspection, maintenance, repair and overhaul, painting, line maintenance, airframe modification, structural repair, avionic and installation, exterior and interior refurbishment, and engineering and support services; and repairs and overhauls components, landing gears, wheels, and brakes. The Expeditionary Services segment provides products and services supporting the movement of equipment and personnel by the U.S. and foreign governments, and non-governmental organizations. This segment also designs, manufactures, and repairs transportation pallets, and various containers and shelters; and provides engineering, design, and system integration services for command and control systems. The company serves domestic and foreign passenger airlines; domestic and foreign cargo airlines; regional and commuter airlines; business and general aviation operators; original equipment manufacturers; aircraft leasing companies; aftermarket aviation support companies; and domestic and foreign military customers. It primarily markets and sells products and services through its employees and foreign sales representatives. AAR Corp. was founded in 1951 and is headquartered in Wood Dale, Illinois.