SARO

In the past quarter, StandardAero, Inc. reported Q2 2026 sales of US$1,599.69 million and net income of US$97.28 million, alongside higher earnings per share and an increased full-year 2026 revenue outlook to US$6,375 million–US$6,500 million. Beyond the headline growth, StandardAero reached profitability on its LEAP and CFM56 programs and secured a US$180 million license expansion expected to lift recurring adjusted EBITDA. We’ll now examine how the raised full-year guidance and LEAP program profitability could reshape StandardAero’s existing investment narrative. Rare earth metals are an input to most high-tech devices, military and defence systems and electric vehicles. The global race is on to secure supply of these critical minerals. Beat the pack to uncover the 28 best rare earth metal stocks of the very few that mine this essential strategic resource. To own StandardAero, you need to believe in a long runway of recurring engine maintenance work across commercial, business and military fleets, with LEAP and CFM56 as key earnings drivers. The latest results and raised 2026 revenue outlook support the near term catalyst of improving margins, while also reducing the immediate risk that LEAP and CFM56 remain structurally dilutive. Supply chain constraints and end market cyclicality remain important watchpoints, but this quarter’s news does not materially alter those risks. The most relevant recent development is StandardAero’s raised full year 2026 revenue guidance to US$6,375 million to US$6,500 million, following a quarter of higher sales, earnings and LEAP and CFM56 profitability. For investors focused on the LEAP margin inflection as a core catalyst, this upgraded outlook, combined with the US$180 million license expansion tied to recurring adjusted EBITDA, reinforces the company’s effort to convert its growing engine footprint into more profitable, higher quality revenue streams. Yet, even with LEAP turning profitable, investors should be aware of the risk that constrained parts and engine shipment delays could still... Read the full narrative on StandardAero (it's free!) StandardAero's narrative projects $7.3 billion revenue and $549.2 million earnings by 2028. This requires 7.4% yearly revenue growth and about a $364.5 million earnings increase from $184.7 million today. Uncover how StandardAero's forecasts yield a $35.50 fair value, a 27% upside to its current price. Four fair value estimates from the Simply Wall St Community cluster between US$33.70 and US$38.20, highlighting how differently individual investors assess StandardAero’s outlook. You should weigh these views against the company’s reliance on LEAP and CFM56 margin progress as a key earnings catalyst and consider what that might mean for future performance. Explore 4 other fair value estimates on StandardAero - why the stock might be worth as much as 37% more than the current price! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your StandardAero research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision. Our free StandardAero research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate StandardAero's overall financial health at a glance. Markets shift fast. These stocks won't stay hidden for long. Get the list while it matters: Uncover the next big thing with 20 elite penny stocks that balance risk and reward. AI is about to change healthcare. These 42 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. Invest in the nuclear renaissance through our list of 92 elite nuclear energy infrastructure plays powering the global AI revolution. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SARO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. StandardAero stock is slightly down year to date while a fresh Discounted Cash Flow (DCF) intrinsic value estimate suggests meaningful upside potential. This raises the question of whether the current share price is allowing for the company’s improved outlook and recent investment plans. Year to date, the share price has declined 5.9%, which contrasts with the positive 5.1% return over the past year and signals that recent weakness may be at odds with longer term gains. Management’s decision to raise its full year outlook and commit to a US$180 million license expansion tied to aerospace aftermarket demand can support higher cash flow expectations, while the execution risk around integrating Unified Turbines and realizing the planned US$25 million in additional adjusted EBITDA may weigh on how much value investors are willing to ascribe today. StandardAero screens as attractively priced on the broader checks, with a high valuation score of 6 out of 6 indicating that several core metrics point to a discount rather than a fully priced stock. The issue now is whether StandardAero’s current valuation properly reflects the DCF based intrinsic value estimate and the company’s updated growth plans. Find out why StandardAero's 5.1% return over the last year is lagging behind its peers. The Discounted Cash Flow (DCF) model estimates what StandardAero could be worth based on its future cash generation. The company has latest twelve month free cash flow of about $175 million, and the model assumes that cash flows grow from this base rather than shrink. On these cash flow projections, the DCF indicates an intrinsic value of about $38 per share, which is roughly 27.0% above the current share price. StandardAero’s raised full year outlook and recent investment and acquisition plans provide context for why cash flows in the model are set to grow. At the same time, the market is still pricing the stock below this estimate. Overall, the DCF analysis indicates that StandardAero stock currently appears undervalued relative to this model’s estimate. Our Discounted Cash Flow (DCF) analysis suggests StandardAero is undervalued by 27.0%. Track this in your watchlist or portfolio, or discover 52 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for StandardAero. The P/E multiple fits StandardAero well because earnings are a key driver for many investors in the Aerospace & Defense sector. StandardAero currently trades on a P/E of about 28.5x, which sits below the Aerospace & Defense industry average of roughly 40.5x and also below the peer average of about 69.2x. The fair P/E ratio for StandardAero is estimated at around 28.7x, which is very close to where the stock trades today. That signal suggests the current P/E already lines up with what would typically be expected given the company’s profile, without pointing to a clear discount or premium relative to its own fundamentals. On this P/E yardstick, StandardAero stock looks roughly fairly valued compared with what the model suggests is appropriate for the business. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for StandardAero pick up where the valuation checks leave off and explain what would need to happen to growth, margins and earnings for the stock to be worth materially more or less than today's price. They sit on the Community page. Rather than relying on a single multiple or model output, each Narrative lays out the assumptions behind its fair value view so you can track those against actual results over time. If you have a number driven view on whether StandardAero's raised outlook, Unified Turbines acquisition and US$180 million license expansion investment can deliver on their potential, share a Narrative and add your voice to the Simply Wall St community. It can be a useful way to set out your case on StandardAero today and track how it stacks up as new results and news arrive. Do you think there's more to the story for StandardAero? Head over to our Community to see what others are saying! StandardAero screens as attractive on the Discounted Cash Flow (DCF) work, with the intrinsic value estimate sitting clearly above the current share price, while the P/E view points to a stock that already trades close to what its earnings profile would suggest. That combination means the broader valuation checks look supportive, even though the market is not treating the stock as a clear bargain on earnings alone. The key question now is whether management can deliver the cash flow growth implied by its outlook and recent investment plans, or whether execution and integration risks ultimately justify the current pricing. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SARO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 5 p.m. ET Senior Vice President of Investor Relations - Rama Bondada Chairman and Chief Executive Officer - Russell Ford Chief Financial Officer - Dan Satterfield Chief Strategy Officer - Alex Trapp Operator: Good afternoon, and welcome to StandardAero's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Rama Bondada, Senior Vice President of Investor Relations. Please proceed. R. Bondada: Thank you, and good afternoon, everyone. Welcome to StandardAero's Second Quarter 2026 Earnings Call. I'm joined today by Russell Ford, our Chairman and Chief Executive Officer; Dan Satterfield, our Chief Financial Officer; and Alex Trapp, our Chief Strategy Officer. Alongside today's call, you can find our earnings release as well as the accompanying presentation on our website at ir.standardaero.com. An audio replay of this call will also be made available, which you can access on our website or by phone. The phone number for the audio replay is included in the press release announcing this call. Before we begin, as always, I would like to remind everyone that today's earnings release and statements made during this call include forward-looking statements under federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Such risks and uncertainties include the factors set forth in the earnings release and in our filings with the Securities and Exchange Commission, including in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2025. We assume no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. Additionally, during today's call, we will discuss certain non-GAAP financial measures, such as adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, free cash flow, adjusted free cash flow and net debt to adjusted EBITDA leverage ratio. The definition and reconciliation of these measures to the most directly comparable GAAP measures can be found in our earnings release and in the appendix to the earnings slide presentation on our website at ir.standardaero.com. Non-GAAP financial measures should be considered in addition to and not as a substitute for GAAP measures. And with that out of the way, I would now like to turn the call over to Russ. Russell Ford: Thank you, Rama, and thank you to everyone for joining our call today. I'll begin on Slide 3 of our earnings presentation. StandardAero delivered a strong second quarter marked by double-digit earnings growth, record margins, significant progress on our strategic priority and continued strength in customer demand. Revenue was up 4.6% year-over-year. Adjusted EBITDA grew 12.3% year-over-year to $230 million. Adjusted EBITDA margin expanded 100 basis points to a record level of 14.4%. And free cash flow was an inflow of $50 million in the quarter. These results mark the earnings and margin inflection we outlined last quarter and demonstrate the operating leverage embedded in our business. Three things drove the quarter. First, continued strong demand, productivity improvements and pricing across our commercial aerospace and business aviation platforms. Second, learning curve progress on our LEAP and CFM56 DFW programs, which reached profitability in the quarter. And third, the margin uplift from the previously announced elimination of low to no-margin material pass-through revenue on the contracts we restructured last year. Partially offsetting those was mix from delays on certain military platforms. Let's move now to each of our end markets. Commercial aerospace revenue grew 6% year-over-year. Excluding the impact of the elimination of pass-through revenue, commercial aerospace growth would have been mid-teens year-over-year growth. Demand remains at historically strong levels across the platforms we support, and we have not experienced any reduction in demand from higher jet fuel prices. MRO capacity across the industry remains tight and our commercial backlog continued to grow in the quarter. Business aviation revenue increased 6% year-over-year, supported by continued strong activity on our key midsize and super-midsize platforms. Global business jet flight activity was up and fleet utilization continues to translate into engine MRO demand at our facilities. The growth in the commercial and business aviation end markets was partially offset by military and helicopter where revenue declined 3% due to input delays on select military platforms. That said, we remain confident in the long-term military demand outlook. Operating tempo and flight hours are up, defense budgets in the U.S. and across our NATO customers continue to grow, and MRO capacity remains constrained. We are seeing that in our order book. Helicopter volumes are running well ahead of last year, and our volumes on fighter and transport platforms are ramping into the second half. We remain confident in our full year military growth outlook. And as Dan will cover, our full year guidance continues to expect military and helicopter growth in the low double digits, with growth weighted to the back half of the year. Before getting into the strategic updates, I want to provide a brief word on the broader environment. Jet fuel prices remain elevated and the geopolitical backdrop remains complex. To date, we have not seen a reduction in demand as a result. We track shop visit bookings, inductions, part orders and asset trading activity closely, and all of them remain consistent with the strength we entered the year. We think that there are structural reasons for this. The MRO market remains constrained, aircraft retirements remain very low, and our customers are reluctant to give up induction slots that are difficult to get back. We're positioned on the most fuel-efficient engine platforms and nearly 40% of our business sits in end markets that are not sensitive to jet fuel prices. We will continue to monitor the environment closely and we remain confident in the resilience of our portfolio and our position in engine MRO. Turning to Slide 4 and our strategic priorities. Our priorities remain unchanged, and we made meaningful progress across each of them in the quarter. Starting with LEAP. We achieved profitability in the second quarter while continuing to ramp the program and win new awards. This is an important milestone. It is evidence we're moving down the learning curve, improving throughput, expanding repair capabilities and scaling the program as promised. We continue to expect LEAP to reach $1 billion in annual revenue by the end of the decade and several billion in annual revenue by the middle of the next decade. We also added new customers in the quarter, and our shop visit slots continue to fill out into next decade. On CFM56 and CF34, demand on both platforms remain strong. Our CFM56 Center of Excellence in Dallas-Fort Worth reached profitability in the quarter, also as promised, and we continue to add new customers and are growing its backlog. On CF34, our Winnipeg expansion remains on track for completion in the third quarter of this year. This additional capacity is effectively sold out and further solidifies our leadership in the CF34 market. We expect the expansion to begin to scale throughout 2027. While on the topic of growth, we have an exciting update for you. We recently signed a significant $180 million license expansion with one of our key OEM partners, spanning multiple turbofan and turboprop platforms. This agreement broadens our authorizations, adds new engine variants at several of our locations, improves economics on existing work, and adds component repair authorizations that benefit both of our segments. In total, we expect it to ramp to approximately $25 million of incremental annual adjusted EBITDA over the next few years, at margins that are accretive to the company average. This is exactly the type of investment we like: strategically aligned, high return, and concentrated on platforms where we already have deep technical capability and a leading position. Dan will take you through more details on the license expansion in a few minutes. In Component Repair Services, commercial aerospace as well as land and marine volumes are both growing. We continue to industrialize new repairs across the portfolio and we are migrating work across our network to further expand throughput capacity and capture the strong demand environment. Continuous improvement remains a core focus of how we operate. We remain dedicated to improving shop-level productivity, standardizing best practices, reducing variability, and ensuring our pricing reflects the value we deliver in a capacity-constrained aftermarket environment. On capital deployment, we were active again during the quarter. In addition to the expanded license agreement, we also completed the acquisition of the Unified Turbines component repair business, which we announced in May. Unified is a targeted strategic addition to CRS as it enhances our hot section repair capabilities on engines we already support, and advances our in-sourcing strategy across both segments. Importantly, the license expansion increases the strategic and financial benefits of the Unified Turbines acquisition. Integration is underway and progressing as planned. Finally, we continue to return capital to shareholders, repurchasing $40 million of shares in the second quarter, bringing our year-to-date repurchases to $100 million. We view share repurchases as a valuable tool within our broader capital allocation framework, particularly when our shares trade meaningfully below our assessment of intrinsic value. Overall, we're pleased with the operational progress made in the first half of 2026 and excited by the investments we've made for future growth and shareholder value creation. We're executing on our priorities. Our growth platforms are progressing. Our balance sheet remains strong. And we continue to see robust demand environments across the markets we serve. As a result, we are raising our 2026 guidance for revenue, adjusted EBITDA and adjusted EPS. With that, I'll turn the call over to Dan to walk through the financial results and our increased guidance in more detail. Daniel Satterfield: Thank you, Russ. I will begin on Slide 5 with highlights from our second quarter results. For the second quarter ended June 30, 2026, we generated revenue of $1.6 billion, an increase of 4.6% compared to the prior year period. Continued strength in commercial aerospace and business aviation was partially offset by lower activity on select military platforms. The results reflect the previously announced elimination of $300 million to $400 million of low to no-margin material pass-through revenue in 2026. Excluding the impact of the eliminated material pass-through, the commercial aerospace end market grew mid-teens year-over-year. Adjusted EBITDA increased to $230 million, up 12.3% year-over-year, and adjusted EBITDA margin expanded to a record 14.4%, an increase of 100 basis points compared to the prior year period. The improvement was driven by higher volumes, pricing and productivity, together with the margin accretion from the pass-through revenue elimination. Net income was $97 million, representing 43.7% growth year-over-year, driven by higher operating earnings, lower interest expense and a lower tax rate. Adjusted EPS was $0.40, up 24% year-over-year, reflecting higher earnings and a lower share count from our share repurchase activity. Free cash flow was an inflow of $50 million in the quarter, which I will come back to shortly. Now moving to our segments, starting with Engine Services on Slide 6. Engine Services revenue increased 4.0% year-over-year to $1.405 billion, with growth across our 3 major end markets. As noted, reported revenue growth was impacted by the elimination of low to no-margin material pass-through revenues. In other words, the underlying demand across the segment was meaningfully stronger than the headline rate suggests. Engine Services segment adjusted EBITDA increased 14.4% year-over-year to $204 million, and segment adjusted EBITDA margin expanded 130 basis points to 14.5%. There were 3 main drivers of this growth and margin expansion. First, volume, productivity improvements and pricing. Second, coming down the learning curve on our LEAP and CFM56 DFW programs, both of which reached profitability in the quarter. And third, the margin accretion from the elimination of low to no-margin material pass-through revenue. Turning to the Component Repair Services segment on Slide 7. Component Repair Services revenue increased 9.2% year-over-year to $195 million. Growth was tied to strong commercial aerospace growth on platforms such as the CFM56, GTF and CF34, as well as continued growth in our aeroderivative platforms in the land and marine power generation market. Partially offsetting these tailwinds were lower revenues on certain military platforms due to timing, which had a greater effect on CRS than Engine Services. CRS segment adjusted EBITDA was $51 million, down 0.9% year-over-year, as segment adjusted EBITDA margin was 26.3%, down 270 basis points. The decline in margin was driven by 3 main items. One, our continued migration of component repair work to the back shop of existing facilities to keep up with strong commercial end market demand. Two, temporary inefficiency resulting from ramping new employees at existing CRS facilities. And three, negative mix from input delays on select military platforms. We expect margin pressure from the work migration and labor ramp to dissipate in the second half of this year. The CRS margin pressure was timing related and does not reflect a change in the underlying earnings profile of the segment. The commercial and land and marine demand backdrop remains strong. New repair development continues at a strong pace. And Unified Turbines adds capability on engines we already serve. We are reiterating our full year CRS revenue and adjusted EBITDA guidance, which implies a return to our expected high 20% margin profile in the second half. Now moving to Slide 8, free cash flow. Free cash flow was a positive $50 million in the second quarter, a meaningful improvement both sequentially and year-over-year. Working capital was a $56 million use of cash and we had $7 million of major growth CapEx in the quarter, with the Winnipeg expansion the largest component of that CapEx as the LEAP and CFM56 Dallas-Fort Worth CapEx and startup costs are winding down. Despite a continued tight supply chain environment, we have made significant progress with our supply chain initiatives, particularly in materials management. These initiatives helped drive a strong positive free cash flow in the second quarter, a period that has seasonally been a use of cash. We will continue to execute on these supply chain initiatives. But given that the industry supply chain dynamics remain fluid, we think it is prudent at the midpoint of the year to maintain our 2026 adjusted free cash flow guidance of $270 million to $300 million. As a reminder, our businesses typically generate a greater portion of cash flow in the second half of the year, and we expect 2026 to follow that pattern. Turning to Slide 9, our balance sheet and liquidity. We ended the quarter with net debt to adjusted EBITDA of 2.6x, down from 3.0x a year ago. The year-over-year improvement was driven by adjusted EBITDA growth and cash flow improvement. We remain comfortably within our long-term target range of 2 to 3x, with meaningful balance sheet flexibility. And we received ratings upgrades from both Moody's and S&P during the quarter, to Ba2 and BB, respectively. In upgrading our ratings, Moody's and S&P cited our strategic expansion investments, stable margins, consistent revenue and earnings growth, diversified global end market exposure, and an expanding positive cash flow. Our capital deployment framework remains centered on 5 primary avenues. First, investments in new engine platforms such as LEAP. Second, organic capacity expansion in existing platforms, such as CFM56 in DFW, CF34 in Winnipeg and HTF7000 in Augusta. Third, license expansion, such as the CF34 expansion in 2024 and the license expansion we are announcing today. Fourth, M&A, such as the Unified Turbines acquisition that we closed in Q2. And fifth, share repurchases, as evidenced by the $100 million we have repurchased year-to-date, including $40 million repurchased in the second quarter. Across all 5 of these capital deployment avenues, we apply a disciplined return framework with expected IRR, ROIC over time, cash generation and strategic fit serving as key inputs in our decision-making. Although leverage is now well within our target range, and with clear visibility and confidence in our ability to deliver sustained double-digit adjusted EBITDA growth, we will remain disciplined allocators of shareholder capital focused on maximizing long-term value and delivering attractive returns. Before getting to the guidance update, let me spend a moment discussing the expanded license investment. The agreement is expected to generate $25 million in incremental annual adjusted EBITDA at full run rate and at margins accretive to the company average. We expect the license to add $10 million of adjusted EBITDA in 2027, $20 million in 2028 and $25 million annually in 2029 and beyond. About 80% of the incremental adjusted EBITDA will be recognized in Engine Services. Now turning to our updated 2026 guidance on Slide 10. We are raising full year revenue guidance by $50 million to a range of $6.375 billion to $6.5 billion, with this increase reflected in our updated revenue guidance for the Engine Services segment. From an end market perspective, we continue to expect commercial aerospace growth in the low double digits to mid-teens range once you normalize for the pass-through material revenue that was eliminated. We expect business aviation growth in the high single-digit to low double-digit range, and military and helicopters growth in the low double-digit range, with this growth back half loaded. We are also raising our adjusted EBITDA guidance to a range of $885 million to $910 million. This reflects our new adjusted EBITDA guidance for the Engine Services segment of $770 million to $785 million. We are reiterating our Component Repair Services segment revenue and adjusted EBITDA guidance, as well as our corporate expense guidance of approximately $105 million. We are also raising our adjusted EPS guidance to a range of $1.50 to $1.57, which now excludes the tax adjusted amortization of all intangible assets and improves comparability with our peers. This increase is supported by higher earnings and a lower tax rate and share count. Our guidance now assumes interest expense of $150 million to $160 million, a lower adjusted effective tax rate of 23.5% to 25.5%, and a lower average diluted shares outstanding of approximately 332.5 million. We are now providing adjusted free cash flow guidance of $270 million to $300 million, which, for clarity, excludes the acquisition cost of new license intangible assets, which we consider more like M&A from a capital deployment perspective. Our CapEx guidance stays at a range of $100 million to $110 million. With that, I'll turn it back over to Russ to wrap up. Russell Ford: Thank you, Dan. StandardAero delivered a strong second quarter and exited the first half with increasing operating momentum. We generated double-digit adjusted EBITDA growth, achieved record margins, delivered positive free cash flow and reached profitability on 2 of our most important growth programs. Our strategic focus areas are seeing meaningful progress, and we continue to find attractive opportunities to invest and deploy capital, evidenced by our license expansion agreement, the Unified Turbines acquisition and continued share repurchase activity. Demand remains strong. Our growth investments are delivering positive results. And our diversified portfolio continues to provide resilience and predictability. With increased visibility into continued double-digit earnings growth, we are confident in our increased outlook for 2026 and our ability to compound long-term shareholder value. This concludes our prepared remarks for today. I look forward to speaking with you again next quarter when Paul McElhinney will join me for his first earnings call as our new CEO. Operator, we're now ready to move to Q&A. Operator: [Operator Instructions] And our first question comes from the line of Seth Seifman with JPMorgan. Seth Seifman: I guess, Russ, I wonder if you could talk a little bit more, you guys mentioned the kind of fluid supply chain environment. And as much as things are improving, when we listened to the GE call, they talked about their delinquencies being up 20%. So I wonder if you could talk a little bit about the degree to which things are getting more challenging or less challenging for StandardAero. You've cited depth of delay in the past, I believe, as a metric, and maybe how things are trending on that basis, and the path you see to kind of a more normalized throughput environment. Russell Ford: Sure, Seth. Relative to supply chain, all of our planning and our guidance assumes that there is no recovery in the supply chain from the OEMs. We have the ability to work around any types of supply chain disruptions through our Component Repair business. We purposefully invested there. So our assumptions and our guidance include what the supply chain is doing right now. Any improvements in the supply chain would be upside for us, and in fact, provides somewhat of a tailwind for our component repair business as the OEMs would begin to take advantage of our technical ability to develop new repairs. So at this point, we don't see any deterioration, and we have ways to keep that in check. And that's why our guidance really is not dependent upon any assumptions about improvements in supply chains. Seth Seifman: Okay. Great. And then actually that goes into the follow-up question I had about CRS. At what point do the LEAP and CFM56, maybe CF34, have to reach a certain scale of activity before we see the internal sales of the CRS business start to really move off of this level of $20 million or so per quarter which we've been seeing for a while? Daniel Satterfield: Yes. I mean the LEAP and CFM56 are strong revenue drivers for CRS and will ramp in concert with the internal ramp. But remember, of course, we're selling those repairs externally as well and doing a good job at it. So that's providing an extra boost. Operator: Our next question comes from the line of Gavin Parsons with UBS. Gavin Parsons: Russ, I think you said you expect LEAP revenue to reach several billion mid-next decade. I think that's a new comment. Could you expand just a little bit on what assumptions underpin that and what you would need from a capacity standpoint to support that? Russell Ford: Yes, good question. In the past, what we've said is that the ramp on LEAP -- first of all, the major milestone was in the first half of this year to -- for the program to cross into profitability, which is done exactly as planned. Next step is between now and the end of the decade, we expect it to reach $1 billion in annual revenue. We see no reason to -- that number would be any different. And then as you move into the early 2030s, you start to see a shift of the work scopes moving more from lighter work scopes, or CTEMs, towards heavier work scopes, the full-up performance restoration visits. And that's what's going to start to drive the revenue into several million (sic) [ billion ] dollars in the early 2030s. Gavin Parsons: And when you talk about that program becoming margin accretive, is that specific to ES or does that also contemplate Component Repair, to Seth's question? Daniel Satterfield: It includes Component Repair. Gavin Parsons: Okay. Could you quantify the cost of the license expansion? I don't know if I heard that. Russell Ford: Yes, 180. USD 180 million. Operator: Our next question comes from the line of Myles Walton with Wolfe Research. Myles Walton: Hoping to touch on where Gavin left off with the license agreement. How do we think about how much of that is sort of a renewal aspect of your current base business and sort of proportional costs associated with that versus sort of paying to get on to new product line expansion? Daniel Satterfield: It's really about the expansion is what's feeding that $25 million. The license agreement opens up new applications and new platforms we haven't serviced before. Some of them are variants of current platforms that we have. And then along with that comes the additional repairs on those same platforms. All of that is included in the license expansion. Some include some improved pricing as well, some reduced costs on some items. But it really is about the expansion of those new licenses, new repairs and improved pricing. Myles Walton: Okay. And maybe as a bigger business model question, how much of your business does it go through where you're having these license expansions? And what's the average duration between renegotiating your current book with a customer and having one of these events? Alex Trapp: Myles, it's Alex. Our license agreements are longer-term type agreements that are enablers to our doing business in markets. And we're always kind of working with our partners who find mutually beneficial routes to improving upon those. And so those happen when we reach agreement on them. But it's -- I wouldn't say it's sort of a constant part of doing business. Myles Walton: Okay. And Dan, just one question on the EPS raise. Is it fair to think that maybe $0.07 of the raise is from the amortization move? Daniel Satterfield: I think most of it really is on the increased earnings. The amortization move is really small, maybe 5% of it. Operator: Our next question comes from the line of Doug Harned with Bernstein. Douglas Harned: You talked about CapEx, the CFM56, the DFW work and the LEAP work, you're coming down on CapEx there but going up on CF34. Just how, in general, do you think about CapEx longer term? Is there a certain level that you would be at because that will always fund growth? Or are we coming out of the period here of heightened CapEx and we should expect less longer term? Daniel Satterfield: That's a great question. We've spoken about it before, and it always holds true for the business, maintenance CapEx will always be about 1%. This year, it will be about 1.3%, right? So that number you can pencil in to your models. As we look at the major platform investments, we are coming off -- if you compare it to 2024, at least, and 2025, CapEx is significantly lower. 2025 CapEx was $134 million. It will be a couple, $20 million or so less than that this year. Of course, now we always have great places to deploy capital. And importantly, we've deployed it this quarter to $180 million of the license expansion, right? That's not CapEx, but it's a deployment of capital. So we've got the liquidity to put our assets to use to the best possible return outcomes. This quarter, we're very proud of the license expansion that we've done. You're not -- unless we do another major platform, there's not going to be a lot of CapEx similar to what we did for LEAP. There's a few dollars of CapEx that's related to the license expansion, but not significant, and we'll disclose that as we go forward. But going forward, our asset allocation strategy remains the same. Douglas Harned: Well, you're in a position now with very strong demand out there. It seems like right now, it's more about your ability to increase capacity, increase the work scope. It seems like those are the real drivers of growth. Is there a growth rate when you're looking forward that you're really targeting? In other words, is there sort of a stable growth to this business that you're going to invest to keep? Should we think of something in the mid to high single digits long term? Russell Ford: Yes, Doug. There's not a kind of long-term basic growth rate that you should think about. Because remember, our company is purposefully designed to be able to attack different segments across the aerospace industry. And each one of those segments, they operate on different maintenance cycles. Because the flight profiles, which create the maintenance cycle, are very different for commercial aircraft than they are from military aircraft or business aviation. So each one of those subsectors will have normal variability. And then you pile all that together and it would be -- we try to keep that natural hedge position as a condition that helps us damp the normal volatility, but there still is volatility because you're mixing 3 different subsegments that all have very different maintenance requirements. And I'm not sure that there's a way to completely dampen that to a precise growth rate that you should target. There is from time to time surges that occur. For instance, there could be up OPTEMPO in military if there's some conflict. There could be something to do with a new aircraft or a new engine being introduced. And so from time to time, you'll get surges and spikes in that normal path. But if you look over the last 40 years, one thing is for sure, if you put a regression line through the growth rate, it's going to have a positive slope, right? It doesn't go down. It always goes up, but it just surges. R. Bondada: Doug, this is Rama. What we say long term is we target double-digit earnings growth. And then -- and so it's a combination of not just top line growth, but also margin expansion and return opportunities for the company. So that's really kind of how we think long term, is double-digit earnings growth. Russell Ford: I mean we've demonstrated that. Our CAGR over the last 10 to 15 years has been in that range. Operator: Our next question comes from the line of Sheila Kahyaoglu with Jefferies. Kyle Wenclawiak: This is Kyle on for Sheila. If I could ask maybe just a shorter-term one related to the CRS segment in the quarter. I know you guys talked about the EBITDA pressure from 3 things: labor inefficiency, the migration of work and then material inputs. And Russ, I think you said you're not really assuming much material improvement in supply chain as you get into the second half. So maybe just the line of sight you have on the material shortage in the quarter, whether that's something that's already resolved here in the first couple of weeks of Q3 or whether that's something you're keeping an eye on. Russell Ford: Yes, it's really not a material shortage issue for us. It's a demand capture move on our part. The demand is growing. And as a result, the most efficient demand -- or the most efficient capacity that you have is capacity that you already own. So before you start building buildings and doing things like that to capture additional capacity, what you do is you use your available capacity across your entire network. So that's what we've been doing over the last 6 to 9 months, is we look at component repair capability beyond just the dedicated CRS facilities that we have in our company. We also have component repair back shops in many of our engine assembly facilities that have available capacity for us to move work, and that way we're able to handle the increasing demand faster. But there are some costs associated with spinning those other sites up in terms of hiring and training people and getting appropriate authorizations to migrate the work from one site to another. So we are consciously doing that in order to capture the demand increase that we see coming our way over the next couple of years. Kyle Wenclawiak: Okay. And then just maybe the confidence level in getting all the way up to that low double-digit growth for military in the second half? And whether those kind of -- the things you just talked about right there, whether that's affecting military within the Engine Services segment as well? Daniel Satterfield: Yes, we feel pretty good about military growth in the second half. Certainly, it got impacted by some select platforms. But in the second half, there are some real great drivers out there. Continued strong demand on the F110 platform. We typically don't talk about platforms, but being an attack platform, we've got strong indications of growth there. On some of our helicopter programs, we've got improved positions, contractual positions and new business. And helicopter is really strong business, had a great second quarter. And we expect that to continue to be a good driver next -- in the second half. Russell Ford: Remember, when there is a conflict, the demand for new aircraft is immediate. The demand for maintenance is a lagged effect because you got to put the aircraft out there, they got to collect flying hours, and then the maintenance appears. So the increased OPTEMPO over the last 6 months, you don't see the maintenance quite yet. But it's a leading indicator for us, when we see the increased flying hours on the F110 engine, which powers the F-16 and the F-15EX, which are both in service, the T700 engine, which flies on the Black Hawk and the Apache, which are both collecting flying hours as well as the Chinook. And then the AE 2100 and the 1107 engines, which power the C-130 air transport as well as the V-22. Those are all aircraft that are seeing increased flight hours to the OPTEMPO in military. So we have high confidence that those flying hours will create maintenance events that we start to see in the second half of this year and will continue into next year. Operator: Our next question comes from the line of Kristine Liwag with Morgan Stanley. Kristine Liwag: I wanted to follow up a little bit more on the supply chain dynamics. So GE had said that they were about 20% delinquent in spare parts that they're delivering to the industry. I was wondering, can you connect that kind of information to your inventory management and your ability to source all the parts that you need to service the engines that you have in backlog for the year? Daniel Satterfield: Yes. Great question, Kristine. As Russ has said consistently, supply chain issues in the aerospace industry are not new. They're not new for you either, with everyone that you've been following. This company has consistently avoided the temptation to expect an improvement in the supply chain. Okay. Then let's go back to the second step underneath that. Supply chain issues for us are really driven by the constrained parts. When we have constrained parts, and as you know well, those are typically in castings and forgings. Good materials management aligns your supply chain to the longest lead time item, which are typically those. And if you look at our cash flow, and in particular, this quarter, we actually reduced contract assets. Remember what those are. Our contract assets are the nearly complete engines that we have on the shop. Those actually reduced because we're a lot smarter about materials management on those constrained parts. Okay. So generally, the constrained parts are -- continue to be an issue for the overall aerospace supply chain ecosphere. We know that and we're managing it well. And we're keeping our guidance estimates current with that assumption. Kristine Liwag: That's super helpful. And also, when you think about working capital in 2027, does that improve working capital as these inventories improve? Daniel Satterfield: Yes, we're not guiding to 2027 yet. But I would be surprised if any of us said things are going to break loose. Operator: Our next question comes from the line of David Strauss with Wells Fargo. Joshua Korn: This is Josh Korn on for David. I wanted to ask, to what extent do you have a further opportunity to eliminate more pass-through revenue? Daniel Satterfield: Yes. For now -- this was a big effort, right? And to get to $300 million, $400 million, by the way, we're on track for that, was a contract-by-contract effort that we've been going after. There is a larger pool out there still of low-margin pass-through revenue. We'll get to it as we can. Right now, this is where I would size it. And I wouldn't expect it to have a material impact going forward because of the very contractual nature of it. Joshua Korn: Okay. And then I guess, to what extent has working capital benefited from lower pass-through so far? Daniel Satterfield: Oh, yes, it's a benefit for sure. Listen, I'll do this all day, to reduce revenue on the behalf of margins and working capital. The biggest advantage we've had in working capital in the quarter has been the materials management, as I mentioned. And really the benefit to the pass-through material on working capital, you'll see primarily next year. Operator: Our next question comes from the line of Ken Herbert with RBC Capital Markets. Kenneth Herbert: Nice results. Maybe just a question for Alex. I wanted to just get a sense as to what you're seeing in terms of M&A opportunities, how you're thinking about sort of incremental opportunities into the second half of this year with what seems to be relatively elevated multiples, at least with what we're hearing in the marketplace. Alex Trapp: Ken, so as always, right, we have a very robust pipeline. I'd say that pipeline this year has translated into more opportunities that have been coming across, be it through formal processes or informal interactions with sellers. So everything has looked great this year. We've studied every opportunity that comes across. And as always, we will be very disciplined with respect to strategic fit, and we'll pounce where there is one. Kenneth Herbert: And then maybe just a follow-up question on the supply chain discussion. Yesterday, Honeywell in particular was talking about some significant challenges with some of its mechanical components. And I'm just curious if you've seen any issues with the HTF7000 in terms of your ability to ramp that program with getting material. Russell Ford: No, we have not. Operator: Our next question comes from the line of Andre Madrid with U.S. Bancorp-BTIG. Andre Madrid: So you mentioned that fuel prices are not impacting demand now, that's clear. But at what point does that stop being the case? Russell Ford: Yes, Andre. First of all, remember, about 40%, so nearly half of our portfolio of engines that we serve, is going to applications that are not sensitive to fuel price, like military applications. It's really just the commercial part of the business that may have some sensitivity there. But there is a normal progression that commercial airlines go through whenever there is volatility in fuel price. And we've seen major world events that we've tracked over the last 25 years where this has happened several times. And in each case, there is a pattern that's predictable and consistent. And that pattern is that during the first 12 months, what you're going to see is airlines will pass along these fuel prices via increased ticket prices. And then after some time, and that's going on right now, and the flight loadings eventually could be impacted by that. But the flight loadings are still -- the average flight loadings are operating in the mid-80%, which is very high. So ticket prices and fuel price -- jet fuel price pass-through have not really started to impact flight loading. Eventually, if it continues on long enough, the flight loading starts to drop. Then the airlines will move to optimizing some of their flight routes in some of their aircraft and they'll rotate different aircraft into different flights. That goes on for a number of months. And if it continues beyond that, then they might start thinking about optimizing some of the work scopes for maintenance. But we're a long way away from that. And typically, these fuel price increases don't -- they don't stick around for several years. They're typically shorter in nature than that. And so it never gets to a point of impacting the maintenance schedule. And the reason for that is because airlines, they're used to this. They're designed to handle this. And there are many levers that they can pull before they get to the lever of adjusting maintenance schedules, because that is the last lever they want to pull, especially in an environment where maintenance capability is constrained. The last thing they want to do is give up a slot that they've contracted for years in advance because then they might not be able to get it back if something changes. So we are in a very nice position relative to how that process works. And we're a couple of months into this increased jet fuel price scenario, but we still have a long way to go before we would expect to see any of this coming through all the way to the maintenance side of the business. Andre Madrid: That makes sense. Thank you for the really thorough response there. I guess pivoting maybe to LEAP, I guess, looking ahead at the $1 billion sales by the end of the decade, are you able to share just kind of what the mix of heavy shop visits that's implied to reach that level? And maybe how do you expect the mix of heavy shop visits to kind of trend thereon out? R. Bondada: Andre, this is Rama. We actually -- we haven't broken out what the split is going to be on the mix at the end of the decade. But I mean, what we have said is that CTEMs are obviously heavy last year and heavy this year in terms of volumes. But as we go through the decade, you'll start seeing more of that PRSV. And given that these are bigger revenue events, more of the revenue will be generated from the PRSV. But we haven't explicitly broken out the volume mix. Russell Ford: One of the reasons we don't want to give guidance on that is this is a brand-new engine platform. If this was an existing platform that had been around for a while, then we might have a better forward forecast of that. But for a brand-new engine, we don't know about the long-term durability of the engine and when those light work scopes are going to be shifting to heavy work scopes. I mean we have a range that we're using for planning purposes, but we don't guide on that. Operator: We have reached the end of the question-and-answer session. I'll hand it back over to management for closing remarks. Russell Ford: Okay. Very good. Thanks, everyone. We appreciate your continued interest and support of StandardAero. We have no further comments for this quarter. We look forward to speaking with everyone for third quarter. Thanks again. Operator: Thank you. And this concludes today's conference and you may disconnect your lines at this time. We thank you for your participation. Before you buy stock in StandardAero, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and StandardAero wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends StandardAero. The Motley Fool has a disclosure policy. StandardAero (SARO) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in StandardAero, Inc.? Here are five stocks we like better. Strong Q2 performance: Revenue rose 4.6% year over year to $1.6 billion, while adjusted EBITDA increased 12.3% to $230 million and margins reached a record 14.4%. Net income, adjusted EPS and free cash flow also improved significantly. Growth investments bolster future results: StandardAero signed a $180 million OEM license expansion expected to generate $25 million in annual adjusted EBITDA at full run rate and completed the acquisition of Unified Turbines’ component-repair business. 2026 outlook raised: The company increased revenue guidance to $6.375 billion-$6.5 billion, adjusted EBITDA guidance to $885 million-$910 million and adjusted EPS guidance to $1.50-$1.57, while leverage declined to 2.6 times adjusted EBITDA. 3 Aerospace Suppliers That Could Benefit as Aircraft Makers Face Bottlenecks StandardAero (NYSE:SARO) reported second-quarter 2026 revenue growth, record adjusted EBITDA margins and positive free cash flow, while raising its full-year revenue, adjusted EBITDA and adjusted earnings-per-share outlook. Revenue for the quarter ended June 30 rose 4.6% year over year to $1.6 billion. Adjusted EBITDA increased 12.3% to $230 million, and adjusted EBITDA margin expanded 100 basis points to a record 14.4%. Net income rose 43.7% to $97 million, while adjusted EPS increased 24% to $0.40. Free cash flow was a positive $50 million during the quarter. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Chairman and Chief Executive Officer Russell Ford said the results reflected strong demand, productivity improvements and pricing in commercial aerospace and business aviation. He also cited profitability reached during the quarter at the company’s LEAP and CFM56 Dallas/Fort Worth programs, along with the benefit from eliminating low- or no-margin material pass-through revenue under contracts restructured last year. Commercial Aerospace revenue increased 6% year over year. Excluding the effect of the eliminated pass-through revenue, management said commercial aerospace growth would have been in the mid-teens. Ford said industry MRO capacity remains constrained and StandardAero’s commercial backlog continued to grow during the quarter. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Business aviation revenue also rose 6%, supported by activity on midsize and super-midsize platforms. Ford said global business-jet flight activity increased and fleet utilization continued to generate engine-maintenance demand. Military and helicopter revenue declined 3% because of input delays on certain military platforms. However, the company maintained its outlook for low-double-digit military and helicopter growth for the full year, with growth weighted toward the second half. → No Hangover: Revisiting Microsoft One Week After Earnings Ford said the company has not seen a demand reduction tied to higher jet fuel prices. Management tracks shop-visit bookings, engine inductions, parts orders and asset-trading activity, which Ford said remained consistent with the strength seen entering the year. He noted that nearly 40% of the company’s business serves end markets not sensitive to jet fuel prices, including military applications. Engine Services revenue rose 4% to $1.405 billion, while segment adjusted EBITDA increased 14.4% to $204 million. Segment adjusted EBITDA margin expanded 130 basis points to 14.5%. Chief Financial Officer Dan Satterfield said the segment benefited from volume, pricing, productivity gains, progress along the learning curve on the LEAP and CFM56 Dallas/Fort Worth programs, and the margin impact of removing low-margin pass-through revenue. Component Repair Services revenue increased 9.2% to $195 million, driven by commercial aerospace activity on CFM56, GTF and CF34 platforms, as well as growth in aeroderivative land and marine power-generation work. However, CRS adjusted EBITDA declined 0.9% to $51 million, and its adjusted EBITDA margin fell 270 basis points to 26.3%. Satterfield attributed the decline to the migration of component-repair work into back shops at existing facilities, temporary inefficiencies from hiring and training employees, and unfavorable mix from military-platform input delays. He said the company expects pressure related to work migration and labor ramping to ease in the second half and reiterated full-year CRS guidance, which implies a return to a high-20% margin profile later in the year. StandardAero signed a $180 million license expansion agreement with an unnamed key OEM partner. The agreement covers multiple turbofan and turboprop platforms, broadens authorizations, adds engine variants at several locations, improves economics on existing work and adds component-repair authorizations. The company expects the agreement to generate approximately $25 million in incremental annual adjusted EBITDA at full run rate, at margins above the company average. Satterfield said the expected contribution is $10 million in 2027, $20 million in 2028 and $25 million annually in 2029 and beyond, with about 80% of the incremental EBITDA expected in Engine Services. Ford said StandardAero also completed its acquisition of Unified Turbines’ Component Repair business during the quarter. The acquisition, announced in May, is intended to expand hot-section repair capabilities on engines StandardAero already supports and advance its insourcing strategy. Integration is underway, according to management. The company said its CF34 expansion in Winnipeg remains on track for completion in the third quarter. Ford said the added capacity is effectively sold out and is expected to begin scaling through 2027. StandardAero continues to expect its LEAP program to reach $1 billion in annual revenue by the end of the decade and several billion dollars annually by the middle of the next decade, as heavier maintenance work scopes emerge. StandardAero raised its 2026 revenue outlook by $50 million to a range of $6.375 billion to $6.5 billion. It increased adjusted EBITDA guidance to $885 million to $910 million and raised adjusted EPS guidance to $1.50 to $1.57. Commercial aerospace growth is expected in the low-double-digit to mid-teens range after normalizing for eliminated pass-through revenue. Business aviation growth is expected in the high-single-digit to low-double-digit range. Military and helicopter growth is expected in the low-double-digit range, weighted toward the second half. Adjusted free cash flow guidance was maintained at $270 million to $300 million. Capital expenditure guidance remained $100 million to $110 million. The updated adjusted EPS outlook excludes tax-adjusted amortization of all intangible assets. Guidance assumes interest expense of $150 million to $160 million, an adjusted effective tax rate of 23.5% to 25.5%, and average diluted shares outstanding of approximately 332.5 million. Net debt to adjusted EBITDA ended the quarter at 2.6 times, compared with 3.0 times a year earlier. Moody’s and S&P upgraded the company’s ratings during the quarter to Ba2 and BB, respectively. StandardAero repurchased $40 million of shares in the second quarter, bringing year-to-date repurchases to $100 million. Ford said Paul McElhinney will join him on the company’s next earnings call as StandardAero’s new chief executive officer. StandardAero is a global aerospace maintenance, repair and overhaul (MRO) provider specializing in gas turbine engines, auxiliary power units (APUs), airframe components and oil & gas rotating equipment. The company offers a full suite of technical services including engine repair and overhaul, component repair, accessory maintenance, parts manufacturing and on-site field support. Its customer base spans commercial airlines, business and general aviation operators, regional carriers, original equipment manufacturers (OEMs) and defense organizations. With roots dating back to 1911, StandardAero has grown through strategic acquisitions and organic expansion to become one of the largest independent MRO providers in the industry. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "StandardAero Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved a record 14.4% adjusted EBITDA margin, driven by the deliberate elimination of $300 million to $400 million in low-to-no-margin material pass-through revenue. Reached a critical profitability milestone for the LEAP and CFM56 DFW programs, signaling successful progression down the operational learning curve. Maintained mid-teens underlying growth in commercial aerospace when normalizing for the strategic removal of pass-through revenue streams. Leveraged a diversified portfolio to offset temporary military platform delays, with nearly 40% of the business insulated from jet fuel price volatility. Utilized internal Component Repair Services (CRS) as a strategic buffer against OEM supply chain delinquencies, allowing for workarounds on constrained parts. Executed a $180 million license expansion to broaden authorizations across multiple turbofan and turboprop platforms, targeting high-return, accretive growth. Projecting LEAP revenue to reach $1 billion annually by 2030, with a shift toward higher-value performance restoration visits driving multi-billion dollar revenue by the mid-2030s. Anticipating low double-digit growth in military and helicopter segments for the full year, heavily weighted toward the second half as flight hour increases translate into maintenance events. Guidance assumes no recovery in OEM supply chain performance, treating any potential industry improvement as pure upside rather than a baseline requirement. Expect the new license expansion to scale to $25 million in incremental annual adjusted EBITDA by 2029, with 80% of the benefit recognized in Engine Services. Maintaining a long-term target of double-digit earnings growth through a combination of top-line expansion and disciplined margin management. Temporary margin pressure in Component Repair Services (270 basis point decline) attributed to the strategic migration of work to back shops to meet high commercial demand. Completed the acquisition of Unified Turbines to enhance hot section repair capabilities and advance the broader in-sourcing strategy. Management noted that while jet fuel prices are elevated, airlines are currently absorbing costs through ticket prices rather than adjusting maintenance schedules. Upgraded credit ratings from Moody's (Ba2) and S&P (BB) following consistent margin stability and strategic expansion investments. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management stated they do not assume any recovery from OEMs in their guidance and use internal component repair capabilities to work around disruptions. Noted that better materials management on long-lead items like castings and forgings allowed for a reduction in contract assets (nearly complete engines). The investment is focused on new applications and engine variants rather than simple renewals of existing business. Expected to be margin accretive and provide a high return on capital by leveraging existing technical capabilities on new platforms. Management views maintenance as the 'last lever' airlines pull, as carriers are reluctant to surrender scarce induction slots in a capacity-constrained market. Historical patterns suggest that during the first 12 months of fuel volatility, airlines pass along costs through ticket price increases; eventually, flight loadings may be impacted, but it takes significantly longer for these factors to affect maintenance schedules.

StandardAero, Inc. (SARO) came out with quarterly earnings of $0.4 per share, beating the Zacks Consensus Estimate of $0.35 per share. This compares to earnings of $0.2 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +14.29%. A quarter ago, it was expected that this company would post earnings of $0.3 per share when it actually produced earnings of $0.33, delivering a surprise of +10%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. StandardAero, Inc., which belongs to the Zacks Aerospace - Defense industry, posted revenues of $1.6 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.50%. This compares to year-ago revenues of $1.53 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. StandardAero, Inc. shares have added about 8.1% since the beginning of the year versus the S&P 500's gain of 12.8%. While StandardAero, Inc. has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for StandardAero, Inc. was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.36 on $1.56 billion in revenues for the coming quarter and $1.43 on $6.41 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Aerospace - Defense is currently in the top 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Intuitive Machines, Inc. (LUNR), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 13. This company is expected to post quarterly loss of $0.07 per share in its upcoming report, which represents a year-over-year change of +36.4%. The consensus EPS estimate for the quarter has been revised 8.9% lower over the last 30 days to the current level. Intuitive Machines, Inc.'s revenues are expected to be $219.31 million, up 335.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report StandardAero, Inc. (SARO) : Free Stock Analysis Report Intuitive Machines, Inc. (LUNR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Margin Expansion Leads To Double-digit Earnings Growth And Drives Guidance Increase SCOTTSDALE, Ariz., August 06, 2026--(BUSINESS WIRE)--StandardAero (NYSE: SARO) announced results today for the three months ended June 30, 2026 ("Second Quarter 2026"). Second Quarter 2026 Highlights Revenue increased 4.6% year-over-year to $1,599.7 million Net Income was $97.3 million; Diluted GAAP EPS was $0.29, Net Income Margin was 6.1% Adjusted Diluted EPS was $0.40 up 24% from $0.32 in the prior year’s quarter Adjusted EBITDA increased 12.3% year-over-year to $229.9 million; Adjusted EBITDA Margin was 14.4% Cash Flow used in Operations was $72.3 million; Free Cash Flow for the quarter was an inflow of $50.2 million Signed license agreement with a key OEM partner Increasing FY26 Revenue, Adjusted EBITDA and Adjusted Diluted EPS guidance "StandardAero delivered strong second quarter results with continued operational momentum," said Russell Ford, StandardAero’s Chairman and Chief Executive Officer. "Amid the higher fuel price environment, we continue to see robust demand across the commercial aerospace platforms we serve, which translated into 12.3% Adjusted EBITDA growth year-over-year. Strong operational execution and the elimination of passthrough revenues from our restructured contracts allowed us to achieve record Adjusted EBITDA Margins of 14.4% and reach profitability on our LEAP and our CFM56 DFW programs during the quarter. Furthermore, we achieved an inflow of $50.2 million in Free Cash Flow during the quarter, as our supply chain initiatives begin to be realized." "We continue to execute on our strategic priorities," Mr. Ford continued. "During the quarter, we signed an agreement with a key OEM partner that significantly expands our relationship and provides improved economics across multiple platforms, strengthening our long-term positioning. We also closed the acquisition of Unified Turbines, further building out our Component Repair Services capabilities, and continued to execute on our share repurchase program. Given our strong first-half performance and continued clear visible demand signals, we are raising our full-year 2026 guidance for revenue, Adjusted EBITDA, and Adjusted Diluted EPS, and remain confident in our ability to deliver another year of double-digit earnings growth." Second Quarter 2026 Consolidated Results Revenue for the Second Quarter 2026 was $1,599.7 million, an increase of $70.8 million, or 4.6%, from $1,528.9 million for the prior year period. The increase was driven by continued strong demand in our commercial aerospace and business aviation businesses, partially offset by the previously announced elimination of low-to-no margin material pass-through revenue on restructured contracts and lower military sales at our Component Repairs Services segment. The Commercial Aerospace end market grew 5.7% compared to the prior year period, the Business Aviation end market grew 5.6% compared to the prior year period, and the Military and Helicopter end market decreased 2.6%, compared to the prior year period. Net income for the Second Quarter 2026 was $97.3 million, as compared to net income of $67.7 million for the prior year period, a 43.7% year-over-year growth rate. Net Income Margin was 6.1% in the quarter, compared to 4.4% in the prior year period. Adjusted EBITDA for the Second Quarter 2026 was $229.9 million, an increase of $25.2 million, or 12.3%, from $ 204.6 million for the prior year period. The increase reflects continued growth in volume and pricing, as well as productivity improvements. Adjusted EBITDA Margin of 14.4% increased 100 basis points compared to 13.4% in the prior year period, primarily due to productivity improvements and the previously mentioned elimination of material pass-through revenue. Second Quarter 2026 Segment Results Engine Services Segment Engine Services segment revenue for the Second Quarter 2026 was $1,405.1 million, an increase of $54.4 million, or 4.0%, from $1,350.7 million for the prior year period. The increase was driven primarily by continued year-over-year growth across all three major end markets, offset by the elimination of low-to-no margin material pass-through revenues on restructured contracts. Engine Services Segment Adjusted EBITDA for the Second Quarter 2026 was $204.2 million, an increase of $25.7 million, or 14.4%, from $178.5 million for the prior year period. The increase was driven by volume, productivity gains, and mix. Segment Adjusted EBITDA Margin of 14.5% increased 130 basis points compared to 13.2% in the prior year period driven by productivity gains, the elimination of material pass-through revenue, and mix, offset partially by the continued ramp in the LEAP and CFM56 DFW programs. Component Repair Services Segment Component Repair Services segment revenue for the Second Quarter 2026 was $194.6 million, an increase of $16.3 million, or 9.2%, from $178.3 million for the prior year period. The increase was driven by strong demand on commercial aerospace products and aeroderivative platforms, which were partially offset by lower revenues on certain military platforms due to input delays. Component Repair Services Segment Adjusted EBITDA for the Second Quarter 2026 was $51.2 million, a decrease of $0.4 million, or 0.9%, from $51.6 million for the prior year period. Segment Adjusted EBITDA Margins decreased 270 basis points to 26.3% from 29.0% in the prior year period, driven primarily by negative mix. Full Year 2026 Guidance StandardAero is updating its full year 2026 guidance: StandardAero has not reconciled its full year 2026 guidance related to Adjusted EBITDA, Adjusted Free Cash Flow or Adjusted Diluted EPS to its most directly comparable forward looking GAAP financial measure because such information is not available, and management cannot reliably predict all of the necessary components of such GAAP measure without unreasonable effort or expense. Conference Call and Webcast Information StandardAero management will host a conference call today, August 6, 2026, at 5:00 PM ET, to discuss its results in more detail. The conference call will be broadcast live via webcast, and the webcast and accompanying slide presentation can be accessed by visiting the Events section on StandardAero’s investor relations website at https://ir.standardaero.com/news-events/events. The conference call may also be accessed by dialing (877) 407-9762 or (201) 689-8538 for telephone access to the live call. Please click here for international toll-free access numbers. For those unable to listen to the live conference call, a replay will be available after the call through the archived webcast in the Events section of the StandardAero’s investor relations website or by dialing (877) 660-6853 or (201) 612-7415. The access code for the replay is 13761161. The replay will be available until 11:59 PM ET on August 20, 2026. About StandardAero StandardAero is a leading independent pure-play provider of aerospace engine aftermarket services for fixed and rotary wing aircraft, serving the commercial, military and business aviation end markets. StandardAero provides a comprehensive suite of critical, value-added aftermarket solutions, including engine maintenance, repair and overhaul, engine component repair, on-wing and field service support, asset management and engineering solutions. StandardAero is an NYSE listed company under the ticker symbol SARO. For more information about StandardAero, go to www.standardaero.com. Forward-Looking Statements This press release contains forward-looking statements that involve substantial risks and uncertainties. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Section 27A of the Securities Act of 1933, as amended (the "Securities Act"). In some cases, you can identify forward-looking statements by the words "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "foreseeable," "future," "intend," "may," "might," "objective," "ongoing," "plan," "potential," "predict," "project," "seek," "should," "will," or "would" and/or the negative of these terms, or other comparable terminology intended to identify statements about the future. They appear in a number of places throughout this press release and include statements regarding our intentions, beliefs or current expectations concerning, among other things, results of operations for the fiscal year ended December 31, 2026, financial condition, liquidity, prospects, growth, strategies, the industry in which we operate and other information that is not historical information. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this presentation, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Generally, statements that are not historical facts, including statements concerning our possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. Factors that could cause actual results to differ materially from those forward-looking statements included in this press release include, among others: risks related to conditions that affect the commercial and business aviation industries; decreases in budget, spending or outsourcing by our military end-users; risks from any supply chain disruptions or loss of key suppliers; increased costs of labor, equipment, raw materials, freight and utilities due to inflation; future outbreaks and infectious diseases; risks related to competition in the market in which we participate; loss of an OEM authorization or license; risks related to a significant portion of our revenue being derived from a small number of customers; our ability to remediate effectively the material weaknesses identified in our internal control over financial reporting; our ability to respond to changes in GAAP; our or our third-party partners’ failure to protect confidential information; data security incidents or disruptions to our IT systems and capabilities; our ability to comply with laws relating to the handling of information about individuals; changes to, and the impact of, United States tariff and import/export regulations; failure to maintain our regulatory approvals; risks relating to our operations outside of North America; failure to comply with government procurement laws and regulations; any work stoppage, hiring, retention or succession issues with our senior management team and employees; any strains on our resources due to the requirements of being a public company; risks related to our substantial indebtedness; risks related to the ownership of our common stock, including the fact that Carlyle owns a significant amount of our voting power; our success at managing the risks of the foregoing, and the other factors described in our Annual Report on Form 10-K for the year ended December 31, 2025 and our other filings with the SEC. As a result of these factors, we cannot assure you that the forward-looking statements in this press release will prove to be accurate. You should understand that it is not possible to predict or identify all such factors. We operate in a competitive and rapidly changing environment. New factors emerge from time to time, and it is not possible to predict the impact of all of these factors on our business, financial condition or results of operations. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives, plans or cost savings in any specified time frame or at all. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods. We caution you not to place undue reliance on these forward-looking statements. All forward looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. Forward-looking statements speak only as of the date of this press release. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data. Non-GAAP Financial Measures This press release includes "non-GAAP financial measures," which are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States ("GAAP"), including Adjusted EBITDA, Adjusted EBITDA Margin, Net Debt to Adjusted EBITDA, Adjusted Diluted EPS, Free Cash Flow and Adjusted Free Cash Flow. We use these non-GAAP financial measures to evaluate our business operations. Certain of the non-GAAP financial measures presented in this press release are supplemental measures of our performance, in the case of Adjusted EBITDA and Adjusted EBITDA Margin, that we believe help investors understand our financial condition and operating results and assess our future prospects. We believe that presenting these non-GAAP financial measures, in addition to the corresponding GAAP financial measures, are important supplemental measures that exclude non-cash or other items that may not be indicative of or are unrelated to our core operating results and the overall health of our company. We believe that these non-GAAP financial measures provide investors greater transparency to the information used by management for its operational decision-making and allow investors to see our results "through the eyes of management." We further believe that providing this information assists our investors in understanding our operating performance and the methodology used by management to evaluate and measure such performance. We also present Net Debt to Adjusted EBITDA, Free Cash Flow, and Adjusted Free Cash Flow, which are liquidity measures, that we believe are useful to investors because it is also used by our management for measuring our operating cash flow, liquidity and allocating resources. We believe it is important to measure the free cash flows we have generated from operations, after accounting for routine capital expenditures required to generate those cash flows. When read in conjunction with our GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as one basis for financial, operational and planning decisions. Finally, these measures are often used by analysts and other interested parties to evaluate companies in our industry. We define Adjusted EBITDA as net income (loss) before interest expense, income tax expense (benefit), depreciation and amortization, further adjusted for certain non-cash items that we may record each period, as well as non-recurring items such as acquisition costs, integration and severance costs, refinance fees, business transformation costs and other discrete expenses, when applicable. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue. We define Adjusted Net Income as GAAP Net income, adjusted for certain one-time items that we may record in a period, as well as non-recurring items such as acquisition costs, integration and severance costs, refinance fees, business transformation costs and other discrete expenses, when applicable, adjusted for the tax effect. We define Adjusted Diluted EPS as Adjusted Net Income divided by the Total Diluted Shares Outstanding. We believe that Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Diluted EPS are important metrics for management and investors as they remove the impact of items that we do not believe are indicative of our core operating results or the overall health of our company and allows for consistent comparison of our operating results over time and relative to our peers. We define Net Debt to Adjusted EBITDA as long-term debt, less cash and cash equivalents divided by Adjusted EBITDA. We define free cash flow as cash from operating activities less capital expenditures. We defined Adjusted Free Cash Flow as Free Cash Flow excluding the purchase of intangible assets. Management recognizes that these non-GAAP financial measures have limitations, including that they may be calculated differently by other companies or may be used under different circumstances or for different purposes, thereby affecting their comparability from company to company. In order to compensate for these and the other limitations discussed below, management does not consider these measures in isolation from or as alternatives to the comparable financial measures determined in accordance with GAAP. Readers should review the reconciliations of our non-GAAP financial measures to the corresponding GAAP measures included in this press release and should not rely on any single financial measure to evaluate our business. We have presented forward-looking statements regarding Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted Diluted EPS. These non-GAAP financial measures are derived by excluding certain amounts, expenses or income, from the corresponding financial measure determined in accordance with GAAP. The determination of the amounts that are excluded from each non-GAAP financial measure is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period in reliance on the exception provided by item 10(e)(1)(i)(B) of Regulation S-K. We are unable to present a quantitative reconciliation of each forward-looking Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted Diluted EPS measure to its most directly comparable forward looking GAAP financial measure because such information is not available, and management cannot reliably predict all of the necessary components of such GAAP measure without unreasonable effort or expense. In addition, we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors. The unavailable information could have a significant impact on the company’s future financial results. These non-GAAP financial measures are preliminary estimates and subject to risks and uncertainties, including, among others, changes in connection with quarter-end and year-end adjustments. Any variation between our actual results and the forward-looking non-GAAP financial data set forth above may be material. Selected financial information for each segment is as follows: The following table presents a reconciliation of net income and net income margin to Adjusted EBITDA and Adjusted EBITDA Margin, respectively: The following table presents a reconciliation of Debt to Net Debt and Net Debt to Adjusted EBITDA: The following table presents revenue by segment, Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin: The following table presents a reconciliation of Cash Flow from Operations to Free Cash Flow: The following tables present a reconciliation of Net income/Diluted EPS to Adjusted Net Income/Adjusted Diluted EPS: View source version on businesswire.com: https://www.businesswire.com/news/home/20260806026852/en/ Contacts Investor Relations Contact [email protected] Rama Bondada

StandardAero, Inc. (SARO) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 6. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This company is expected to post quarterly earnings of $0.35 per share in its upcoming report, which represents a year-over-year change of +75%. Revenues are expected to be $1.58 billion, up 3.1% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 2.9% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For StandardAero, Inc., the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -1.45%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination makes it difficult to conclusively predict that StandardAero, Inc. will beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that StandardAero, Inc. would post earnings of $0.3 per share when it actually produced earnings of $0.33, delivering a surprise of +10.00%. Over the last four quarters, the company has beaten consensus EPS estimates just once. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. StandardAero, Inc. doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Joby Aviation, Inc. (JOBY), another stock in the Zacks Aerospace - Defense industry, is expected to report loss per share of $0.23 for the quarter ended June 2026. This estimate points to a year-over-year change of +4.2%. Revenues for the quarter are expected to be $28.97 million, up 289600% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for Joby Aviation, Inc. has been revised 1.5% down to the current level. Nevertheless, the company now has an Earnings ESP of -5.88%, reflecting a lower Most Accurate Estimate. This Earnings ESP, combined with its Zacks Rank #4 (Sell), makes it difficult to conclusively predict that Joby Aviation, Inc. will beat the consensus EPS estimate. The company could not beat consensus EPS estimates in any of the last four quarters. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report StandardAero, Inc. (SARO) : Free Stock Analysis Report Joby Aviation, Inc. (JOBY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

General Dynamics (GD) came out with quarterly earnings of $4.24 per share, beating the Zacks Consensus Estimate of $3.95 per share. This compares to earnings of $3.74 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +7.34%. A quarter ago, it was expected that this defense contractor would post earnings of $3.68 per share when it actually produced earnings of $4.1, delivering a surprise of +11.41%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. General Dynamics, which belongs to the Zacks Aerospace - Defense industry, posted revenues of $14.09 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 4.48%. This compares to year-ago revenues of $13.04 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. General Dynamics shares have added about 16.8% since the beginning of the year versus the S&P 500's gain of 8.5%. While General Dynamics has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for General Dynamics was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $4.11 on $13.63 billion in revenues for the coming quarter and $16.66 on $55.16 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Aerospace - Defense is currently in the top 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, StandardAero, Inc. (SARO), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly earnings of $0.35 per share in its upcoming report, which represents a year-over-year change of +75%. The consensus EPS estimate for the quarter has been revised 2.9% higher over the last 30 days to the current level. StandardAero, Inc.'s revenues are expected to be $1.58 billion, up 3.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report General Dynamics Corporation (GD) : Free Stock Analysis Report StandardAero, Inc. (SARO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research