Earnings

StandardAero Lifts Buyback Authorization To Over $1 Billion, Adds $350 Million Accelerated Repurchase

New CEO Paul McElhinney also raised 2026 guidance on his first call, with revenue growth now about 9% against 6% before.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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StandardAero Lifts Buyback Authorization To Over $1 Billion, Adds $350 Million Accelerated Repurchase

StandardAero, which services aircraft engines for commercial, military and business aviation customers, raised its share repurchase authorization to over $1 billion and will launch a $350 million accelerated buyback, CEO Paul McElhinney said on the company's third-quarter earnings call on Thursday. It was his first call as CEO and the last for Executive Chairman Russell Ford, who is stepping out of the CEO role.

The buyback math

McElhinney said repurchases make sense "when our stock is trading at a meaningful discount to our assessment of intrinsic value." The company has already bought back $160 million of stock this year, and $500 million will remain on the authorization once the accelerated program is done.

CFO Dan Satterfield said $50 million of the year-to-date purchases came in the third quarter, leaving $850 million under the $1.01 billion authorization before the accelerated program. Net debt to adjusted EBITDA stood at 2.66 times at quarter-end, against 2.9 times a year earlier.

Management expects to finish the year with net leverage below 2.7 times after these actions, McElhinney said, within the company's long-term range of two to three times. That leaves room for M&A, which he called an area of focus for him as CEO.

A higher 2026 outlook

McElhinney said revenue growth is now expected at about 9%, up from a prior forecast of 6%. Adjusted EBITDA growth is forecast at 13% against 11% before, and adjusted EPS growth at 26% against 23%.

Satterfield put revenue guidance at $6.525 billion to $6.645 billion, up $148 million at the midpoint and implying 8.6% growth. Adjusted EPS is guided to $1.57 to $1.62, and adjusted free cash flow guidance of $270 million to $300 million was reiterated.

Third-quarter revenue rose 4% to $1.56 billion. Adjusted EBITDA climbed 15% to $225 million, with margin up 130 basis points to 14.4%, and adjusted EPS rose 30% to 39 cents.

Military delays weigh on component repair

Component repair revenue rose 7.3% to $189 million, but segment adjusted EBITDA margin was 25.8%. Satterfield blamed unfavorable mix, delays in military inputs on training programs and leftover costs from adding labor. He tied the military drop to the Middle East conflict, calling it a shift in outlays rather than funding, as engines stay in theater longer.

Engine services margin widened 250 basis points to 15%, helped by the LEAP and CFM56 programs, which reached profitability this year.

New CEO's four priorities

Ford said McElhinney "brings deep engine MRO experience." McElhinney named LEAP, productivity, component repair and disciplined capital deployment as his priorities, and reiterated an aim of more than $1 billion in annual LEAP revenue by the end of the decade.

StandardAero will give 2027 guidance in February, and McElhinney said he plans to meet shareholders over the coming months to share more about his vision for the company.

Sources

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