AAR ($AIR.US) shares saw an uptick early Tuesday following the aviation services provider's announcement of significantly improved fiscal first-quarter results year-over-year, driven by robust revenue growth across its various operating segments. The company revealed that for the quarter ending in August, it achieved adjusted earnings of $0.85 per share, marking an increase from $0.78 in the same period last year.
This positive development surpassed the consensus expectation of $0.82 from three analysts surveyed by Capital IQ. Sales boomed by 20% year-over-year, reaching $661.7 million, comfortably exceeding the $646.6 million forecast made by the same group of analysts. As a result of these strong financials, AAR's stock rose by 3.6% in the premarket trading session. "We experienced an impressive 26% organic growth in our new parts distribution activities, coupled with exceptional operational performance in our hangars, which contributed to a return to growth within our government business," stated Chief Executive John Holmes in an official announcement.
He went on to highlight that the quarter also benefitted significantly from contributions from Trax, while the recent Product Support acquisition has consistently exceeded expectations. Revenue in the parts supply segment surged to $249.7 million, up from $236.8 million in the same quarter last year.
This growth has been positively influenced by the expansion of existing product lines and the ramp-up of new business wins, along with increased purchases from both the U.S. and foreign governments, as Chief Financial Officer Sean Gillen remarked during an earnings call, corroborated by a Capital IQ transcript.
Repair and engineering sales saw a remarkable 58% leap, amounting to $217.6 million. In the integrated solutions division, sales progressed to $168.9 million compared to $156.3 million last year, driven by growth in commercial power-by-the-hour activities, selected government programs, and contributions from Trax, as Gillen further detailed on the call.
Revenue from expeditionary services rose to $25.5 million from $19.1 million compared to last year. Sales to commercial customers increased by 20%, buoyed by growth in all three core segments of the company, Gillen revealed. Moreover, government sales also experienced a 20% rise, in contrast to the 15% growth observed during the previous three-month quarter. For the ongoing quarter, AAR anticipates a sales increase ranging from 18% to 22%, with adjusted operating margins expected to align closely with the previous quarter's reported figure of 9.1%.
Chief Executive Holmes conveyed to analysts during the call that "Demand for our services remains exceptionally strong, and the current dynamics in the aviation supply chain overall are in our favor." Analysis from Truist Securities implied that the company's guidance for revenue suggests that adjusted EPS for the second quarter is projected at around $0.84.
Conversely, three analysts consulted by Capital IQ forecast an EPS of $0.88. Current Stock Price: 71.60, Change: +2.50, Percent Change: +3.62.