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Investing.com -- AAR Corp (NYSE:AIR), a provider of aviation services, reported first quarter fiscal 2026 results that exceeded analyst expectations, with the company’s shares rising 0.7% in after-hours trading on Tuesday.
The aviation services provider posted adjusted earnings per share of $1.08 for the quarter ended August 31, 2025, surpassing the analyst estimate of $1.00. Revenue reached $740 million, significantly above the consensus estimate of $691.54 million and representing a 12% increase compared to the same period last year.
AAR’s Parts Supply segment was the standout performer, with 27% growth driving much of the company’s 17% organic sales increase. The company also reported improved profitability, with adjusted EBITDA rising 18% to $87 million and adjusted EBITDA margin expanding to 11.7% from 11.3% YoY.
"Our first quarter was a strong start to the fiscal year as we drove significant growth across all of our segments," said John M. Holmes, AAR’s Chairman, President and CEO. "Once again, we saw exceptional performance out of our new parts Distribution activities as we continue to win new business and expand our market share."
Commercial customer sales, which represented 71% of total revenue, increased 11% to approximately $525 million, driven by double-digit growth in aftermarket parts trading and new parts distribution. Government customer sales grew even faster at 15% YoY.
The company made strategic investments during the quarter, including the acquisition of Aerostrat, a maintenance planning software company, for $15 million plus potential contingent consideration of up to $5 million.
Despite these strong results, AAR reported cash flow used in operating activities of $44.9 million during the quarter, compared to $18.6 million used in the prior year period, as the company invested to support growth, particularly in its Parts Supply segment.
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