Third-quarter airline services (ATSG) earnings beat, year-over-year increase

Air Transport Services GroupThird-quarter 2021 ATSG earnings (excluding 24 cents of one-time items) of 60 cents per share beat Zacks’ consensus estimate of 46 cents. Additionally, net income improved 36.4% year-over-year on the back of an impressive revenue performance. Revenue not only grew 15.3% year-over-year to $465 million, but also topped Zacks’ consensus estimate of $430 million.

Revenue was driven by higher revenues from both segments, namely ACMI (aircraft, crew, maintenance and insurance) and Cargo Aircraft Management (CAM) services. Prior to eliminations, ACMI services unit revenue increased 10.2% to $330.9 million. CAM segment revenue increased 21.8% to $92.9 million, while other business revenue increased 9.7% to $90.3 million.

CAM segment revenues in the reported quarter were boosted by the external leases of 13 more 767-300 freighters compared to the prior year level. External client segment revenue increased 38% in the September quarter. ACMI services unit revenue benefited from better airline operations. Block hours increased during the quarter due to evacuation missions in Afghanistan for the US government.

The company’s total fleet included 130 aircraft (19 passenger and 111 freighter) in service at the end of the September quarter 2021 compared to 112 at the end of the third quarter 2020. Of the 130 aircraft, 122 belonged to CAM.

Total operating expenses rose 10.3% in the September quarter to $366.2 million as fuel expenses rose 38.7% due to higher oil prices. Capital expenditures in the first nine months of 2021 increased 9% to $428.1 million.

Outlook

The company, which currently holds a Zacks No. 3 (Hold) ranking, now expects adjusted EBITDA for 2021 to be at least $535 million, indicating a 1.9% increase from compared to previous forecasts. Capital expenditures for 2021 are expected to be $530 million ($335 million for growth and $195 million for sustaining capital). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sector insights

Let’s take a look at some of the other company earnings releases from the Zacks Transportation industry.

Washington International Shippers EXPD reported Q3 2021 earnings of $2.09 per share, which beat Zacks’ consensus estimate of $1.67. Total revenue of $4,319.3 million also topped Zacks’ consensus estimate of $3,454.3 million.

Triton International Limited TRTN reported third-quarter 2021 earnings (excluding 60 cents of one-time items) of $2.43 per share, which beat Zacks’ consensus estimate of $2.21. Total rental revenue of $400.2 million also topped Zacks’ consensus estimate of $392.9 million.

Former Dominion Freight Line ODFL reported earnings per share of $2.47 in the third quarter of 2021, beating Zacks’ consensus estimate by 10 cents. Revenue of $1,400 million also topped Zacks’ consensus estimate of $1,360.3 million.

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