AAR Corp. reported consolidated sales of $795.3 million for fiscal Q2 2026, a 16% year‑over‑year increase that surpassed the consensus estimate of $767 million. Net income rose to $34.6 million, or $0.90 per diluted share, while adjusted diluted earnings per share reached $1.18, beating the analyst expectation of $1.02 by $0.16 (15.7%). The earnings beat was driven by disciplined cost management and a favorable mix shift toward higher‑margin Parts Supply and Repair & Engineering contracts, which helped offset modest price pressure in the Integrated Solutions segment.
The Parts Supply division led the revenue surge, growing 29% year‑over‑year to $353.6 million. Repair & Engineering sales increased 7% to $244.5 million, supported by the recent acquisition of HAECO Americas and continued demand for maintenance services. Integrated Solutions grew 7.6% to $175.8 million, while Expeditionary Services added 5.9% to $21.4 million. The strong performance in Parts Supply, particularly new parts distribution, accounted for the majority of the 16% revenue growth and contributed significantly to the 23% rise in government‑customer sales.
Adjusted operating margin expanded to 12.1% from 11.4% in the prior year, a 0.7‑percentage‑point lift. The margin improvement reflects higher operating leverage as volume grew, a shift toward higher‑margin segments, and effective cost controls that kept operating expenses from rising in line with revenue. The 12.1% margin, up 12% from the previous year, signals that AAR’s pricing power and operational efficiencies are translating into stronger profitability.
Management reiterated its outlook for the third quarter and the full fiscal year. For Q3 2026, AAR expects total sales growth of 20%–22% and an adjusted operating margin of 9.8%–10.1%, maintaining the same guidance range as the prior quarter. The company also raised its full‑year organic sales growth guidance to “approaching 11%” from “approaching 10%,” indicating confidence that the momentum from recent acquisitions and the expanding aviation aftermarket will sustain growth.
John M. Holmes, Chairman, President and CEO, said the quarter “demonstrated our ability to deliver solid results across all segments while advancing our strategic objectives through recent acquisitions.” He highlighted the company’s strong positioning in the most attractive segments of the aviation aftermarket and emphasized that self‑sourced acquisitions, such as ADI and HAECO Americas, are key drivers of the current growth trajectory.
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