AAR 2026 Q2 Earnings Remarkable Turnaround with 213.1% Net Income Surge

AAR (AIR) delivered a stunning Q2 2026 performance, surpassing expectations with a 15.9% revenue increase and a dramatic shift from a net loss to a $34.6 million profit. The company raised its Q3 revenue guidance above consensus and highlighted strategic acquisitions as key drivers of growth.

Revenue

AAR’s total revenue surged to $795.30 million in Q2 2026, a 15.9% increase from $686.10 million in the prior-year period. The Parts Supply segment led with $353.60 million in revenue, reflecting a robust 29.2% year-over-year growth. Repair & Engineering followed with $244.50 million, while Integrated Solutions contributed $175.80 million. Expeditionary Services reported $21.40 million, and the Corporate and Other segment remained flat at $0. Collectively, these segments underscored AAR’s diversified revenue streams and strategic focus on high-growth areas.

Earnings/Net Income

AAR’s profitability rebounded sharply, with net income jumping 213.1% to $34.60 million in Q2 2026, reversing a $30.60 million loss in the same period last year. Earnings per share (EPS) improved from a loss of $0.87 to a profit of $0.91, marking a 204.6% positive swing. This turnaround highlights the company’s operational efficiency and cost management.

Post-Earnings Price Action Review

The strategy of buying AIR when revenues beat and holding for 30 days yielded no return, with the strategy returning 0.00% and the benchmark gaining 85.89%. Despite a maximum drawdown and Sharpe ratio of 0.00%, the stock experienced a 3.76% drop in the latest trading day but gained 9.36% over the week. Analysts note that while the strategy lacked excess returns, the stock’s volatility and recent gains suggest mixed investor sentiment.

CEO Commentary

CEO John Holmes attributed the strong Q2 results to strategic acquisitions, including ADI and HAECO Americas, and a 29% growth in the Parts Supply segment. He emphasized the 32% organic expansion in new parts distribution and the “2-way exclusive distribution model” as key drivers. With HAECO integration expected to boost margins over 12–18 months, Holmes expressed confidence in sustained growth and market share gains.

Guidance

AAR provided optimistic Q3 guidance, projecting total sales growth of 20–22% (organic 8–11%) and adjusted operating margins of 9.8–10.1%. Full-year sales growth is expected to approach 17%, with margin expansion anticipated post-HAECO integration. The company also anticipates cash positivity in Q3, lower interest expenses, and continued parts distribution growth exceeding 20% annually.

Additional News

AAR recently expanded its Parts Supply segment through an exclusive distribution agreement with TRIUMPH, now offering over 100 commercial actuation products for Boeing and Airbus platforms. This partnership enhances AAR’s global reach and complements its existing offerings. Meanwhile, CEO John Holmes III sold 23,077 shares of AAR stock in January, trimming his stake by 8.87%. Analysts have maintained a “Moderate Buy” rating, with price targets averaging $93.25. Additionally, AAR’s recent digital MRO partnership with Thai Airways and RBC Capital’s upgraded price target to $105 further highlight its strategic momentum.