Company News - ASML's ADRs rose 5% after reporting orders significantly exceeding investor expectations, driven by increased demand for AI computing workloads [3][5][17] - Seagate's stock increased by 8% following a strong second-quarter earnings report that surpassed expectations, along with a positive outlook [3] - Texas Instruments gained 7% after providing a favorable outlook, indicating improved demand in industrial and data center markets [3] - AT&T's shares rose 3% after reporting fourth-quarter profit and revenue that exceeded analysts' estimates, attributed to strong broadband subscriber growth [3] - C3.ai's stock surged 15% amid reports of merger talks with Automation Anywhere [3] - F5 Inc. jumped 8% after raising its revenue forecast for the fiscal year [3] - New Oriental Education's ADRs rose 6% after beating second-quarter estimates and increasing its annual net revenue forecast [3] - Corning's shares fell 3% after reporting fourth-quarter results and providing a disappointing outlook [3] - Elevance Health dropped 6% after giving an adjusted profit forecast for 2026 that fell short of Wall Street expectations [3] - Qorvo's stock fell 10% after issuing a weaker-than-expected outlook [3] Industry Trends - The tech sector is experiencing a rally, driven by strong earnings from semiconductor and memory companies, which is boosting the AI trade [1][4][6] - The Magnificent Seven stocks are mostly higher, with Nvidia, Alphabet, and Amazon showing gains, while Meta and Apple experienced slight declines [3] - The semiconductor, memory, and storage sectors are seeing significant gains due to positive earnings reports, particularly from ASML, Seagate, and Texas Instruments [3][4] - Asian equities are also benefiting from the tech rally, with notable gains in TSMC and SK Hynix [5][13] - The demand for AI memory is driving earnings growth for companies like SK Hynix, indicating a strong market for AI-related technologies [5][14]

Core Viewpoint - StandardAero announced the pricing of a secondary offering of 50,000,000 shares of its common stock at a price of $31.00 per share, with the offering expected to close on January 29, 2026 [1][2] Offering Details - The offering is conducted by affiliates of The Carlyle Group Inc. and GIC, with all net proceeds going to the Selling Stockholders, and no shares being sold by the Company itself [1][2] - The underwriters have a 30-day option to purchase up to an additional 7,500,000 shares of common stock [1] - Joint lead book-running managers for the offering include Morgan Stanley & Co. LLC, J.P. Morgan, RBC Capital Markets, BofA Securities, Jefferies, and UBS Investment Bank [1] Share Repurchase Agreement - The Company has entered into a stock purchase agreement to repurchase $50 million of its common stock at the offering price, which is part of its existing stock repurchase program approved in December 2025 [1] - The share repurchase is expected to close concurrently with the offering on January 29, 2026, and the repurchased shares will no longer be outstanding after the offering [1] Financial Performance Estimates - Preliminary estimated results for the year ended December 31, 2025, indicate expected revenue between $6,053 million and $6,083 million, net income between $270 million and $280 million, and adjusted EBITDA between $806 million and $812 million [2]

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--StandardAero, Inc. (NYSE: SARO) ("StandardAero†or the "Company†) announced today that two of its stockholders (the "Selling Stockholders†), affiliates of The Carlyle Group Inc. and GIC, intend to offer and sell an aggregate of 50,000,000 shares of the Company's common stock, par value $0.01 per share ("Common Stock†), in an underwritten public offering pursuant to StandardAero's shelf registration statement filed with the Securities and Exchange Commission (. ...

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--StandardAero, Inc. (NYSE: SARO) ("StandardAero†or the "Company†) announced today certain unaudited preliminary estimated results for the year ended December 31, 2025 and the actual reported results from the prior fiscal year. The Company will fully disclose and discuss further details on 4Q 2025 and full-year 2025 results, along with its 2026 outlook, next month. The Company's financial results for the year ended December 31, 2025 are not yet finalized. The Company has ...

Revenue and Income Projections - Revenue for the year ended December 31, 2025 is estimated to be between $6,053.0 million and $6,083.0 million, representing an increase of approximately 15.6% to 16.1% compared to $5,237.2 million in the prior year[7] - Net income is expected to be between $270.0 million and $280.0 million, a significant increase from $11.0 million in the previous year[7] EBITDA and Cash Flow Estimates - Adjusted EBITDA is projected to be between $806.0 million and $812.0 million, reflecting an increase of 16.7% to 17.6% from $690.5 million in the prior year[8] - Cash Flow from Operations is estimated to be between $310.0 million and $320.0 million, compared to $76.3 million for the prior year, indicating an increase of $233.7 million to $243.7 million[8] - Free Cash Flow is expected to be between $200.0 million and $210.0 million, a turnaround from a cash use of $45.0 million in the previous year, representing an increase of $245.0 million to $255.0 million[9] - The midpoint reconciliation of net income to Adjusted EBITDA shows a net income of $275.0 million and an Adjusted EBITDA of $809.0 million, resulting in an Adjusted EBITDA Margin of 13.3%[10] - The Company anticipates a significant increase in cash flow metrics, with Free Cash Flow projected at $205.0 million compared to a negative $45.1 million in the prior year[14] Financial Reporting and Guidance - The Company emphasizes that these preliminary estimates are subject to revision and may differ materially from actual results due to ongoing financial closing processes[3] - Management highlights the importance of non-GAAP financial measures such as Adjusted EBITDA and Free Cash Flow for evaluating business operations and financial health[17] - The Company plans to provide a full disclosure of its 4Q 2025 and full-year 2025 results, along with its 2026 outlook, in the following month[2]

Core Viewpoint - StandardAero Inc. will replace Frontier Communications Parent Inc. in the S&P MidCap 400 index effective January 22, 2026, due to Verizon Communications Inc.'s acquisition of Frontier Communications [1] Group 1: Index Changes - Effective January 22, 2026, StandardAero will be added to the S&P MidCap 400 index under the ticker SARO in the Industrials sector [1] - Effective January 22, 2026, Frontier Communications Parent will be deleted from the S&P MidCap 400 index under the ticker FYBR in the Communication Services sector [1] Group 2: Acquisition Details - Verizon Communications Inc. is acquiring Frontier Communications Parent, with the deal expected to close soon pending final conditions [1]

Group 1: Parnassus Investments Overview - Parnassus Investments released the third-quarter 2025 investor letter for the Parnassus Mid Cap Fund, highlighting a strong performance with a return of 5.49% (net of fees) compared to the Russell Midcap Index's return of 5.33% [1] - The Russell Mid Cap Index continued to rise following a robust second quarter, indicating a positive market trend [1] Group 2: StandardAero, Inc. Insights - StandardAero, Inc. (NYSE:SARO) is highlighted as a key stock in the Parnassus Core Equity Fund's third-quarter 2025 investor letter, focusing on its role as an aerospace engine aftermarket services provider [2][3] - As of January 7, 2026, StandardAero's stock closed at $30.36 per share, with a one-month return of 10.36% and a 52-week gain of 31.77% [2] - StandardAero has a market capitalization of $10.155 billion, indicating its significant presence in the aerospace sector [2] Group 3: Investment Potential of StandardAero, Inc. - The Parnassus Core Equity Fund believes StandardAero has an attractive return profile due to durable demand and potential for margin expansion, driven by factors such as aging fleets and original equipment manufacturer outsourcing [3] - StandardAero's ability to service a variety of aircraft engines positions it as a preferred partner in commercial, military, and business aviation markets, with predictable and nondiscretionary maintenance, repair, and overhaul work [3] Group 4: Hedge Fund Interest and Market Position - StandardAero, Inc. was held by 44 hedge fund portfolios at the end of the third quarter, a decrease from 48 in the previous quarter, indicating fluctuating interest among institutional investors [4] - While StandardAero is recognized for its potential, there is a belief that certain AI stocks may offer greater upside potential with less downside risk, suggesting a competitive investment landscape [4]

Core Viewpoint - StandardAero, Inc. is recognized as a strong investment opportunity in the aerospace and defense sector, particularly following the approval of a $450 million stock repurchase program, which reflects the company's commitment to enhancing shareholder value and its solid financial position [1][2]. Group 1: Stock Repurchase Program - The board of directors approved a $450 million stock repurchase program, which will be executed based on market conditions and other factors [1]. - The buyback program is intended to allocate capital towards accretive investments, reinforcing the company's focus on growth opportunities, technology, and capabilities [2]. Group 2: Analyst Ratings and Market Position - Bernstein SocGen Group has reiterated an Outperform rating for StandardAero with a price target of $39, despite some cash flow concerns [3]. - The company's growth trajectory is supported by high demand for Maintenance, Repair, and Overhaul (MRO) services and its strong market position [3][5]. Group 3: Contractual Changes and Financial Impact - StandardAero has negotiated changes with customers to purchase materials directly from Original Equipment (OE) suppliers, which is expected to reduce revenue by $300-$400 million but improve profit margins [4]. - The restructuring of contracts is anticipated to positively impact cash flow by reducing inventory levels [4].

Summary of Key Points from the Conference Call Transcript Industry Overview - **Industry**: Aerospace & Defense Electronics, specifically focusing on the Commercial Aftermarket (AM) pricing dynamics [1][2] Core Insights 1. **Maintenance Cost Increases**: Maintenance costs have risen by 30-35% since 2021/2022, with expectations for continued momentum in the high single digits (MSD+) moving forward [1][4][21] 2. **Turnaround Times (TAT)**: TATs remain elevated at approximately 100-125 days, although some relief is being found through engine exchange programs [1][16][31] 3. **PMA and USM Advantages**: Parts Manufacturer Approval (PMA) and Used Serviceable Material (USM) are gaining traction due to their pricing advantages, with PMA parts sold at a 20-25% discount to Original Equipment (OE) list prices [3][5][10] 4. **Workscope Expansion**: Workscope expansions can lead to significant increases in service costs, with second shop visits (SVs) for GE90 engines being 60-70% heavier than first visits [4][22] 5. **Parts Inflation**: Parts inflation is shifting the market mix towards USM, with certain parts seeing price increases from ~$20K to ~$30-35K, representing a 63% rise [5][21] 6. **Contract Structures**: New contract structures are reallocating risk and unlocking savings, with OEMs absorbing non-maturity risks in early program Pay-By-Hour (PBH) contracts [6][21] 7. **Lease Rates and Scarcity**: Lease rates have increased by approximately 5-10% over the past year, driven by system-wide scarcity and elongating TATs [7][16][28] Additional Important Insights 1. **Market Growth**: The aftermarket is projected to grow by 8% in 2026, outpacing the International Air Transport Association (IATA) Revenue Passenger Kilometers (RPKs) growth of 6% [8] 2. **Expert Commentary**: PMA parts are noted to have gross margins of 50-70% for suppliers, indicating a lucrative market despite historical reluctance from lessors to adopt PMA due to lease return conditions [3][10][19] 3. **MRO Capacity Constraints**: The MRO (Maintenance, Repair, and Overhaul) capacity remains constrained, with shortages in USM and spare engines pushing costs higher and extending turnaround times [28][33] 4. **Platform-Specific Dynamics**: Different engine platforms such as CFM56, LEAP, and GTF are experiencing unique challenges, including durability issues and rising maintenance demands [41][42][43] 5. **Future Projections**: LEAP services revenues are expected to reach approximately $6.5 billion by 2028, up from around $3.2 billion in 2025, indicating strong growth potential in this segment [11][12] This summary encapsulates the key points discussed in the conference call, highlighting the current state and future outlook of the aerospace and defense aftermarket industry.

PresentationOkay. Good afternoon. I'm Doug Harned, Bernstein's aerospace and defense analyst. And I'm really happy today to have with us StandardAero. So we've got Russ Ford, CEO, Chairman; Alex Trapp, who's Head of Strategy; and Rama Bondada, Investor Relations. So to start off here, Russ, maybe you can give us an overview of the company for those who may be less familiar with it.Russell FordChairman & CEO Sure. Be happy to. Thank you, Doug. Welcome, everyone. StandardAero is the world's largest independen ...