AAR Q2 Earnings Surpass Estimates, Sales Increase Year Over Year

AAR Corp. AIR reported second-quarter fiscal 2026 adjusted earnings of $1.18 per share, which topped the Zacks Consensus Estimate of $1.02 by 15.7%. The bottom line also improved 31.1% from the year-ago quarter’s level of 90 cents.

The company reported GAAP earnings of 90 cents per share compared with 87 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 $795.3 million. The reported figure beat the Zacks Consensus Estimate of $767 million by 3.7%. The figure also increased 15.9% from $686.1 million recorded in the year-ago quarter.

The year-over-year improvement can be attributed to the double-digit growth across new parts Distribution within the company's Parts Supply segment.

AAR: Segment Details

In the fiscal second quarter, sales in the Parts Supply segment totaled $353.6 million, up 29.2% year over year.

Repair & Engineering reported sales of $244.5 million, up 6.9% from the prior-year period’s level.

Integrated Solutions sales amounted to $175.8 million, up 7.6% from the year-ago quarter’s reported number.

Expeditionary Services recorded sales of $21.4 million, up 5.9% year over year.

AIR’s Operational Update

AIR’s adjusted operating margin increased from 9.2% to 10.2%, driven by higher volume and profitability in new parts distribution activities.

Selling, general and administrative expenses amounted to $88.7 million compared with $133.1 million a year ago.

Net interest expenses for the quarter totaled $18.6 million compared with $18.8 million in the year-ago period.

Financial Details of AAR

As of Nov. 30, 2025, AAR’s cash and cash equivalents amounted to $75.6 million compared with $96.5 million as of May 31, 2025.

The company’s long-term debt totaled $952.7 million as of Nov. 30, 2025, up from $968 million as of May 31, 2025.

In the first six months of fiscal 2026, net cash used from operating activities was $31.3 million against the net cash provided of $3.4 million in the year-ago period.

AIR’s Zacks Rank

AAR currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Defense Releases

Northrop Grumman Corporation NOC will report its fourth-quarter 2025 results on Jan. 27, 2026, before market open. The Zacks Consensus Estimate for NOC’s earnings is pegged at $6.97 per share, indicating a year-over-year rise of 9.1%.

The consensus estimate for sales stands at $10.60 billion, calling for year-over-year growth of 8.5%.

Lockheed Martin Corp. LMT is set to report fourth-quarter 2025 results on Jan. 29, 2026, before market open. The Zacks Consensus Estimate for LMT’s earnings is pegged at $6.33 per share, implying a year-over-year decrease of 17.5%.

The consensus estimate for its sales is pegged at $19.72 billion, indicating year-over-year growth of 5.9%.

L3Harris Technologies, Inc. LHX is slated to report fourth-quarter 2025 results on Jan. 29, 2026, before market open. The Zacks Consensus Estimate for LHX’s earnings is pegged at $2.79 per share, indicating a year-over-year fall of 19.6%.

The consensus estimate for its sales is pegged at $5.78 billion, calling for a year-over-year rise of 4.6%.

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

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