WOOD DALE, Ill. - AAR Corp . (NYSE: NYSE:AIR), a prominent aviation services provider, announced a robust finish to its fiscal year with record fourth-quarter sales and earnings surpassing analyst expectations.
The company's Q4 adjusted earnings per share (EPS) from continuing operations reached $0.88, marginally outperforming the analyst estimate of $0.85. However, the revenue for the quarter, reported at $658.8 million, narrowly missed the consensus estimate of $659.55 million.
The company's sales saw a significant 19% increase compared to the same quarter last year, with sales to commercial customers rising by 20% primarily due to the acquisition of the Product Support business and robust demand for new parts distribution activities. Government customer sales also grew by 15%, driven by increased order volume for new parts distribution and enhanced performance across government program activities.
John M. Holmes, Chairman, President, and CEO of AAR Corp., attributed the record quarter to exceptional performance in new parts distribution activities and the successful integration of the Triumph Product Support acquisition, which exceeded expectations. Holmes also highlighted the double-digit growth in the government business and the 13th consecutive quarter of adjusted operating margin improvement, crediting organic growth and strategic acquisitions for the company's success.
Despite the impressive sales growth, the company's gross profit margin saw a slight decrease from 19.5% in the prior year's quarter to 19.4% in the current quarter, mainly due to a terminated commercial programs PBH agreement. This was somewhat offset by the favorable margin contribution from the newly acquired Product Support business.
For the full fiscal year 2024, AAR reported consolidated sales of $2.3 billion, marking a 17% increase from the previous year, with significant contributions from Parts Supply offerings and increased volumes in commercial programs activities. Adjusted operating margin for the year improved from 7.5% to 8.3%, reflecting the inclusion of the higher margin Product Support business for one quarter.
Holmes concluded with a positive outlook, noting the company's progress in executing strategic visions and targets, expanding leadership in Parts Supply, breaking ground on airframe maintenance expansions, and leveraging a stronger market position to anticipate another year of sales and earnings growth.
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