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WOOD DALE, Ill. - AAR Corp . (NYSE:AIR) reported better-than-expected first quarter results, driven by robust demand for its aviation services across both commercial and government segments.
The aviation services provider posted adjusted earnings per share of $0.85 for the fiscal first quarter, surpassing analyst estimates of $0.82. Revenue grew 20% YoY to $661.7 million, also beating expectations of $641.94 million.
Sales to commercial and government customers each increased 20% compared to the prior year quarter. The company attributed the growth to its recent acquisition of the Product Support business as well as organic expansion.
"During the quarter, we continued to execute well across the company. We drove 26% organic growth in our new parts distribution activities, had strong operational performance in our hangars and saw a return to growth in our government business," said John M. Holmes, Chairman, President and CEO of AAR Corp.
Adjusted operating margin improved to 9.1% from 7.3% last year, driven by contributions from the Product Support acquisition and improved execution.
The company highlighted multiple new contract wins during and after the quarter, including two five-year deals with the U.S. Navy worth up to $1.2 billion each for aircraft maintenance services.
AAR Corp. expects continued growth across both commercial and government businesses, citing exceptionally strong demand for its services. Management anticipates further margin expansion as it integrates recent acquisitions and drives growth in higher-margin activities.
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