StandardAero net income jumps 36.2% to $92.8 million in third quarter

Key Facts

StandardAero reported on November 5 results for the three months ended September 30, 2026, posting net income of $92.8 million, up 36.2% from $68.1 million in the same period a year earlier. Net income margin rose to 6.0% from 4.5%, while revenue reached $1,557.4 million, up 4.0% year over year. Diluted earnings per share under accounting standards were $0.28, while adjusted earnings per share were $0.39, up 30.0% from $0.30 a year earlier. Published estimates for earnings per share before the results were $0.38, putting the adjusted figure above them. The chief executive said the results were achieved despite higher fuel prices and geopolitical uncertainty, and that growth in the engine services segment supported the increase in the full-year outlook.

Profitability improved faster than revenue, with adjusted earnings before interest, taxes, depreciation and amortization rising to $224.9 million from $195.6 million, up 15%. The margin on this measure widened to 14.4% from 13.1%, an increase of 130 basis points. The company attributed the margin improvement to higher volume, a better business mix and productivity gains, alongside the elimination of pass-through revenue. On liquidity, cash flow from operations was $128.9 million, while adjusted free cash flow reached $99.2 million during the quarter. Comparison with the third quarter of 2025 shows a change in the pace of growth: revenue then rose 20.4% to $1,498.0 million, while net income increased by $51.7 million to $68.1 million, with a margin of 4.5%.

The engine services segment was the biggest driver of growth in adjusted operating earnings. Its revenue was $1,368.8 million, up 3.5% from $1,322.2 million a year earlier, and the company said the increase came mainly from volume, with the elimination of pass-through revenue having an offsetting effect. The segment's adjusted EBITDA rose 24.0% to $205.1 million from $165.4 million, and its margin climbed to 15.0% from 12.5%. The company attributed the segment's performance to volume, business mix, productivity gains and increased utilization of serviceable materials. The chief executive said the segment's adjusted EBITDA growth was 24%, described it as a record, and said it contributed to the decision to raise 2026 guidance. The gap between relatively modest revenue growth and the larger increase in earnings reflects improved contribution from the segment's volume, mix and productivity, according to the factors cited by the company.

By contrast, the component repair segment followed a different trajectory: revenue rose 7.3% to $188.7 million from $175.8 million, but adjusted EBITDA fell 9.9% to $48.6 million from $54.0 million. The company attributed the decline in adjusted earnings to productivity and business mix. The figures show that sales growth in this segment did not translate into comparable earnings growth during the quarter, unlike the engine services segment, which posted increases in both revenue and adjusted earnings. The quarter's operating picture therefore centers on the differing performance of the two businesses: component repair revenue growth was higher than engine services revenue growth, while earnings fell in the former and rose in the latter. This divergence puts the segment results in the context of the company's overall earnings growth and highlights the reliance of the total improvement on the strength of the engine segment.

StandardAero raised its fiscal 2026 guidance to revenue of between $6,525 million and $6,645 million, adjusted EBITDA of between $905 million and $920 million, and adjusted diluted earnings per share of between $1.57 and $1.62. The chief executive linked the increase in the outlook to the company's quarterly performance, particularly growth in adjusted EBITDA for the engine services segment, while citing challenges including elevated fuel prices and geopolitical uncertainty. The adjustment to the annual ranges follows another guidance increase, as he described it, making the new revenue, earnings and earnings-per-share forecasts a key measure of what management announced after the results. The statement did not provide figures for the previous guidance in the evidence available here, so the annual comparison remains limited to the newly announced ranges.

On capital allocation, the board approved an increase of $560 million to the share repurchase authorization on October 28, bringing the total authorization to $1 billion, with $850 million remaining available after the increase. The company said it intends to enter into a $350 million accelerated share repurchase agreement with Morgan Stanley. The move gives the repurchase program a defined size within the broader authorization approved by the board, alongside the announcement of a higher full-year outlook. SARO shares closed at $25.71 on November 4, the day before the results announcement, and then at $25.30 on November 5, compared with a close of $25.23 on November 3. The company held its third-quarter results call on November 5 and listed its participation in the Baird Global Industrials Conference on November 11, 2026, among its upcoming events.