AAR Corp Q1 revenue beats estimates as demand for air travel increases

By Reuters News


Overview

  • US aviation aftermarket platform's fiscal Q1 revenue rose 24%, beating analyst expectations

  • Adjusted EPS for fiscal Q1 rose 38%, beating analyst expectations

  • Company agreed to acquire 65% controlling interest in MRO Holdings


Outlook

  • AAR sees Q2 sales growth (ex. LCP) of 14%-16%

  • Company expects Q2 adjusted EBITDA margin (ex. LCP) of 13.0%-13.4%

  • AAR raises FY 2027 sales growth (ex. LCP) outlook to low teens


Result Drivers

  • AIRLINE DEMAND - Co said strong demand for air travel drove increased demand for its services

  • PARTS SUPPLY GROWTH - Co said Parts Supply segment grew 31%, led by 23% organic growth in new parts Distribution across Commercial and Government markets

  • REPAIR, ENGINEERING & SOFTWARE - Co said Repair, Engineering & Software segment sales grew 31%, driven by Airframe MRO, Component MRO, and software activities


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q1 Sales

Beat

$918 mln

$880.68 mln (6 Analysts)

Q1 Adjusted EPS

Beat

$1.49

$1.33 (6 Analysts)

Q1 EPS

$1

Q1 Net Income

$40.10 mln


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the aerospace & defense peer group is "buy"

  • Wall Street's median 12-month price target for AAR CORP. is $145.00, about 26% above its September 28 closing price of $115.09

  • The stock recently traded at 20 times the next 12-month earnings vs. a P/E of 20 three months ago


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For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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