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WOOD DALE, Ill. - AAR Corp . (NYSE:AIR) reported third-quarter fiscal 2025 results that beat earnings expectations but missed on revenue, sending shares down 1.8% in after-hours trading Thursday.
The aviation services provider posted adjusted earnings per share of $0.99, edging past analyst estimates of $0.98. However, revenue of $678 million fell short of the $698.97 million consensus forecast.
Sales increased 20% YoY, driven by strong demand for aftermarket services. Parts Supply sales rose 12%, while Repair & Engineering segment sales surged over 53% YoY, boosted by the Product Support acquisition and increased throughput at Airframe MRO facilities.
"We delivered another strong quarter of significant year-over-year sales and earnings growth," said John M. Holmes, AAR’s Chairman, President and CEO. "We are particularly proud of the progress on EBITDA margin which expanded from 10.3% to 12.0% year-over-year."
The company reported a net loss of $8.9 million, or $0.25 per share, due to a $63.7 million pre-tax charge related to the planned divestiture of its Landing Gear Overhaul business.
AAR expects further margin expansion through growth in new parts distribution, software services, and realization of acquisition synergies. The company reduced its net leverage ratio from 3.58x to 3.06x in the past year and anticipates additional deleveraging.
Despite the revenue miss, management remains optimistic about continued sales growth and margin improvement going forward.
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