Air Transport Services (ATSG) Q1 profit tops mark, up year-over-year

Air Transport Services GroupFirst-quarter 2022 ATSG earnings (excluding 1 cent of one-time items) of 56 cents per share beat Zacks’ consensus estimate of 45 cents. Net income jumped more than 100% year-over-year on the back of an impressive revenue performance. Revenue not only grew 29.2% year-over-year to $485.9 million, but also topped Zacks’ consensus estimate of $458.7 million.

Revenue was driven by higher revenue from both segments, ACMI (aircraft, crew, maintenance and insurance) and Cargo Aircraft Management (CAM) services. Prior to the eliminations, revenue for the ACMI services unit increased 34% year-over-year to $330 million. Revenues from the CAM segment increased by 28.4% to $106.9 million, while those from other businesses increased by 9.4% to $102.53 million.

CAM segment revenues in the reported quarter were boosted by a larger fleet of externally leased Boeing 767s compared to the prior year level. Aircraft leasing and related revenue from external customers increased 26% year over year in the March quarter. ACMI services unit revenue benefited from better airline operations. Revenue block hours were up 21% year-over-year in the quarter.

ATSG’s total fleet included 119 aircraft (19 passenger and 100 freighter) in service at the end of the March quarter 2022, compared to 117 at the end of the fourth quarter of 2021. ATSG plans to have a fleet (in service) comprising 18 passengers and 115 cargo aircraft by the end of 2022. Total operating expenses increased 30.3% in the March quarter to $416 million, with fuel expenses increasing 98.2% as the price of oil is soaring.

Outlook 2022

ATSG, which currently holds a No. 2 (buy) Zacks rank, expects 2022 adjusted EBITDA to be $640 million, nearly $100 million above 2021 levels. Capital expenditures for 2022 are expected to be $590 million ($390 million for growth and $200 million for sustaining capital).

You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Revenue Insights

In the broader transport sector, JB Hunt Transportation Services JBHT,CSX Corporation CSX and United Airlines UAL recently released its first quarter 2022 results.

J.B. Hunt announced better-than-expected results for the first quarter of 2022. Quarterly earnings of $2.29 per share beat Zacks’ consensus estimate of $1.91. Net income jumped 67.2% year-over-year on higher revenue across all segments.

Total operating revenue of $3,488.6 million also topped Zacks’ consensus estimate of $3,260.5 million. Revenue jumped 33.3% year-over-year.

CSX Corp.First-quarter 2022 earnings of 39 cents a share beat Zacks’ consensus estimate by a penny despite lower overall volumes as supply chain issues continued to hurt results. Net income improved 25.81% year over year on higher revenue, helped by increased shipping rates.

Total revenue of $3,413 million topped Zacks’ consensus estimate of $3,291.2 million. Revenue increased by 21.33% year-on-year.

United Airlines suffered a loss of $4.24 per share in the first quarter of 2022, higher than the Zacks consensus estimate of a loss of $4.19. It is the ninth consecutive quarterly loss suffered by UAL as coronavirus concerns continue to reduce demand for air travel.

Operating revenue of $7,566 million was also below Zacks’ consensus estimate of $7,657.2 million.

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