NEW YORK - AAR Corp (NYSE: AIR ) shares jumped 5.3% in after-hours trading on Tuesday after the aviation services provider reported fiscal second quarter results that beat analyst expectations, driven by robust demand across its commercial and government businesses.

The Wood Dale, Illinois-based company posted adjusted earnings per share of $0.90 for the quarter ended November 30, surpassing the analyst consensus of $0.88. Revenue rose 26% year-over-year to $686.1 million, well above estimates of $654.18 million.

AAR saw strong organic growth of 12% in the quarter, accelerating from 6% in Q1. The Parts Supply segment grew sales by 20%, while Repair & Engineering revenue surged 57% compared to last year.

"AAR delivered another solid quarter with record sales and improved margins," said CEO John M. Holmes. "We saw 20% sales growth in our Parts Supply segment, led by a significant expansion in our commercial new parts distribution activities, and a return to growth in USM as high demand for engine and airframe components continued."

The company's adjusted EBITDA margin expanded to 11.4% from 10.1% in the prior year quarter. AAR expects continued margin expansion in coming quarters as it optimizes its portfolio and drives efficiencies.

Looking ahead, Holmes said AAR anticipates "continued strong sales growth in the second half of fiscal year 2025" along with further margin improvements. The company remains on track to reduce leverage following its recent Product Support acquisition.

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