AAR (AIR) Up 9.1% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for AAR (AIR). Shares have added about 9.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is AAR due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for AAR Corp. before we dive into how investors and analysts have reacted as of late.

AAR Q4 Earnings Surpass Estimates, Sales Rise Year Over Year

AAR Corp. reported fourth-quarter fiscal 2026 adjusted earnings of $1.53 per share, which topped the Zacks Consensus Estimate of $1.41 by 8.5%. The bottom line also improved 31.9% from the year-ago quarter’s level of $1.16.

The company reported GAAP earnings of $1.27 per share compared with 95 cents in the prior-year quarter.

The year-over-year improvement in the bottom line can be attributed to strong sales growth.

AIR reported fiscal 2026 adjusted earnings of $5.05 per share, which were higher than the year-ago figure of $3.91, reflecting the impact of improved operating efficiency on higher sales volumes.

AIR’s Total Sales

In the quarter under review, AAR generated net sales of $928 million. The reported figure beat the Zacks Consensus Estimate of $892 million by 4%. The figure also increased 23% from $754.5 million recorded in the year-ago quarter.

The year-over-year improvement can be attributed to the double-digit growth across new parts Distribution within the company's Parts Supply segment and the impact of AIR’s acquisitions of HAECO Americas and ADI.

The company reported total revenues of $3.31 billion in fiscal 2026, which were higher than $2.78 billion in fiscal 2025.

AAR: Segment Details

Parts Supply sales surged 38.7% to $423.8 million from $305.5 million in the prior-year quarter. Organic growth in new-parts distribution was 19%, with commercial distribution rising 28% organically and government distribution increasing 7%.

Repair, Engineering and Software sales jumped 35.1% to $314.4 million. Growth reflected the HAECO Americas acquisition, record component maintenance sales, higher airframe maintenance volumes and capacity, and increased recurring revenues at Trax.

Government Solutions sales declined 8% to $130.2 million due to lower activity under the Worldwide Aviation Support Services program.

Legacy Commercial Programs recorded sales of $59.6 million, down 20.3% year over year.

AIR’s Operational Update

AIR’s adjusted operating income increased 27.4% to $98 million, while adjusted operating margin improved 10 basis points to 10.6%.

Selling, general and administrative expenses amounted to $99.6 million compared with $77.4 million a year ago.

Net interest expenses for the quarter totaled $16.3 million compared with $18.4 million in the year-ago period.

Financial Details of AAR

As of May 31, 2026, AAR’s cash and cash equivalents amounted to $84 million compared with $96.5 million as of May 31, 2025.

The company’s long-term debt totaled $893.9 million as of May 31, 2026, down from $968 million as of May 31, 2025.

In fiscal 2026, net cash provided from operating activities was $98.7 million compared with net cash flow of $36.1 million in the year-ago period.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

At this time, AAR has a average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

AAR has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research