AAR Q1 Earnings Beat Estimates, Sales Increase Year Over Year

AAR Corp. AIR 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 Sales

In 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 Details

In 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 Update

AIR’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 AAR

As 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.

AIR’s Zacks Rank

AAR currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Defense Releases

Other companies from the same sector that will soon report their quarterly results are discussed below:

Northrop Grumman Corporation NOC will report its third-quarter 2025 results on Oct. 21, before market open. The Zacks Consensus Estimate for NOC’s earnings is pegged at $6.43 per share, indicating a year-over-year decline of 8.1%.

The consensus estimate for sales stands at $10.69 billion, calling for year-over-year growth of 6.9%.

RTX Corporation RTX is set to report third-quarter 2025 results soon. The Zacks Consensus Estimate for RTX’s earnings is pegged at $1.41 per share, implying a year-over-year decrease of 2.8%.

The consensus estimate for its sales is pegged at $21.40 billion, indicating year-over-year growth of 6.5%.

Textron Inc. TXT is slated to report third-quarter 2025 results soon. The Zacks Consensus Estimate for TXT’s earnings is pegged at $1.46 per share, indicating a year-over-year fall of 4.3%.

The consensus estimate for its sales is pegged at $3.70 billion, calling for a year-over-year rise of 8.1%.

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This article originally published on Zacks Investment Research (zacks.com).

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