What happened Shares of AAR (NYSE: AIR) were up 10% on Friday after the aerospace maintenance and parts provider reported better-than-expected quarterly results. The COVID-19 pandemic is taking its toll, but the company's overall business is holding up much better than Wall Street had feared. So what On Thursday after markets closed AAR reported fiscal first-quarter earnings of $0.17 per share on revenue of $400.8 million, beating consensus expectations for a $0.05 per share loss on sales of $382 million. The pandemic has crimped commercial aerospace sales because with airlines flying fewer planes, demand for spare parts and maintenance services has fallen. Overall AAR sales fell 26% in the quarter year over year, with commercial revenue down 48%. Image source: Getty Images. But AAR generated more than half of its business in the quarter from government and defense customers, compared to 38% of total revenue last year, helping the company to outperform expectations. New business wins during the quarter include a three-year contract with the Royal Netherlands Air Force to repair F-16 jet fuel starters, as well as deals with Frontier Airlines and helicopter operator Air Methods to provide warranty and engineering services. Now what AAR has also pushed to cut costs through the downturn, including divesting its airlift and composites operations and consolidating its facilities footprint. Though its gross profit margin did fall 300 basis points year over year to 12.1% due to the lower commercial volumes, CEO John M. Holmes on a post-earnings call with investors said he believes AAR is well positioned to thrive once the pandemic is over. "While the timing of the recovery is unknown, we believe that the actions we have taken and are continuing to take to adjust our cost structure and reposition our portfolio, combined with the strength of our team, the airlines' need for lower cost solutions, and our balance sheet, uniquely position us to benefit from an eventual return of demand and to emerge an even stronger and more profitable company," Holmes said. Investors went into earnings expecting the worst, with AAR shares down more than 50% year to date. As Holmes said, the timing of an aerospace recovery is uncertain, but AAR, if nothing else, made its case that the company will be a survivor through the downturn. 10 stocks we like better than AARWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and AAR wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of September 24, 2020 Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source