AIR — Q1 FY2027 Financial Report Analysis

Acquisitions lift sales 24%, but deal costs, weaker hangar margins and more shares keep EPS growth to 5%

AAR Corp. makes its money in the aviation aftermarket: selling new and used replacement parts for aircraft, and doing MRO (maintenance, repair and overhaul: the inspections, repairs and refurbishments airlines and governments outsource so their planes keep flying). In its fiscal first quarter of 2027 (the three months ended August 31, 2026; AAR's fiscal year ends May 31), sales rose 24.1% to $918.0 million. About $98 million of that came from businesses AAR bought in the past year. Profit grew more slowly than sales: operating income rose 11.1% and diluted EPS rose 5.3% to $1.00. The filing's biggest news is a deal announced the day before it was filed: a roughly $3.0 billion agreement to buy 65% of MRO Holdings, which would more than double AAR's debt.

At a glance

• Sales +24.1% to $918.0M. About $98M came from three acquisitions (ADI, HAECO Americas, ART). Without them, sales grew about 11%, which is still solid underlying demand.
• Operating margin down to 7.9% from 8.8%. $7.3M of costs for the pending MRO Holdings deal and a weaker airframe repair business outweighed better margins in parts and government work.
• Net income +16.6%, but EPS only +5.3%. The diluted share count rose 11.1% (35.9M to 39.9M), so each shareholder's slice grew much less than the company's profit.

Key figures