AAR Corp.

AAR's parts business is on fire. Its Parts Supply segment grew 39% last quarter, with brand-new parts distribution up 19% on its own. The company has locked in exclusive deals with major manufacturers, including a new multi-year agreement with Woodward covering high-demand parts for popular jet engines, so airlines often have to buy through AAR to get certified components.

Full year sales hit 3.3 billion dollars, up 19%, and profit jumped to 188 million dollars from just 12.5 million a year earlier. Fourth quarter sales of 928 million dollars grew 23%. Management expects sales to grow another 21% to 23% next quarter, so the momentum looks like it has room to run.

AAR moves a lot of money but keeps very little of it. Net margins sit around 5%, so roughly 5 cents of profit on every dollar of sales. Costs are climbing too, with selling and administrative expenses rising to 99.6 million dollars last quarter from 77.4 million a year ago.

AAR carries 816 million dollars in net debt from its acquisition spree, and interest ate up 16.3 million dollars in a single quarter. The company also issued new stock, pushing share count from 35.6 million to 39.6 million, which means each existing share owns a slightly smaller piece of the company.