AAR Corp. delivered a strong start to fiscal 2027, reporting revenue and adjusted earnings that significantly outpaced analyst expectations. Growth was robust across all core segments, particularly in Parts Supply and Repair, Engineering & Software, which both saw sales increases of 31%. Alongside the results, the company announced a definitive agreement to acquire a 65% controlling interest in MRO Holdings to further scale its airframe maintenance capabilities.
Key Highlights
- Consolidated sales reached $918.0 million, a 24% increase over the prior year and approximately 4% above the $882.4 million consensus estimate.
- Adjusted diluted EPS of $1.49 beat the $1.31 estimate by 13.7%, supported by organic growth in new parts distribution.
- Adjusted EBITDA margin expanded to 12.7% from 11.7% in the prior year quarter, reaching the high end of management's previous guidance.
- The Parts Supply segment grew 31% to $414.8 million, driven by 23% organic growth in new parts distribution across commercial and government markets.
- Cash flow from operations improved to $55.8 million, compared to a use of $44.9 million in the prior year, reducing net leverage to 1.81x.