AAR CORP. has reported financial results for the third quarter (Q3) of fiscal year 2026, ended February 28, 2026, with consolidated sales rising 25% to US$845.1 million from US$678.2 million a year earlier. Sales to commercial customers increased 27% (US$130 million), driven by double-digit organic growth in new parts distribution and contributions from the acquisitions of HAECO Americas and ADI. Government sales rose 19% in Q3, supported by higher order volumes and ADI’s government business. Commercial customers accounted for 73% of total sales, up from 72% in the prior year.
The company reported net income of US$68.0 million in Q3, compared with a net loss of US$8.9 million in the prior year, which included a US$63.7 million pre-tax charge related to the divestiture of its Landing Gear Overhaul business. Adjusted diluted earnings per share increased to US$1.25 from US$0.99.
Selling, general and administrative expenses rose to US$89.8 million from US$61.3 million, with the prior year including an US$11.1 million legal charge reversal. Acquisition, amortisation and integration costs increased to US$8.7 million from US$5.3 million.
Operating margin declined to 7.8% from 10.5%, while adjusted operating margin improved to 10.2% from 9.7%, reflecting stronger performance in new parts distribution. Net interest expense decreased slightly to US$17.1 million from US$18.1 million. The average diluted share count rose to 39.5 million from 35.4 million, primarily due to an equity offering earlier in the fiscal year.
Cash flow from operating activities totalled US$74.7 million, compared with an outflow of US$18.7 million in the prior year. As of 28 February 2026, net debt stood at US$816.5 million, with net leverage of 2.17x.
