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Air Lease (AL) Benefits From Fleet Growth Amid Rising Costs
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Air Lease Corporation’s (AL - Free Report) top line is benefiting from continuous growth in its fleet.
The company recently reported third-quarter 2022 earnings of 90 cents per share, which surpassed the Zacks Consensus Estimate of 89 cents and improved 3.4% year over year on the back of an increase in revenues. Total revenues of $561.3 million lagged the Zacks Consensus Estimate of $570 million. However, the top line jumped 7% year over year.
Air Lease Corporation Price, Consensus and EPS Surprise
Total revenues jumped 7% year over year in the third quarter of 2022, owing to the continuous growth in Air Lease’s fleet, lower lease restructuring losses and higher aircraft sales, trading and other revenues. During the third quarter of 2022, AL took delivery of a total of 14 aircrafts, representing approximately $843 million in aircraft investments. As of Sep 30, 2022, Air Lease’s fleet included 405 owned and 87 managed aircraft, with 412 new aircraft orders from Boeing and Airbus.
Revenues from the rental of flight equipment climbed 4.2% year over year to $541.39 million in the reported quarter. As of Sep 30, 2022, Air Lease owned 405 aircraft with a net book value of $23.9 billion. The total fleet size at the end of the third quarter was 904 (including the owned fleet of 405) compared with 911 at the end of June 2022.
Strong freight and cargo markets are supporting demand for the company’s wide-body passenger aircraft. Continued recovery in airline operations is further driving lease demand. Higher lease demand and rising interest rates and inflation indicate growing lease rate environment, which bodes well for Air Lease.
The company’s efforts to reward its shareholders are encouraging. Concurrent with the third quarter of 2022 earnings release, Air Lease’s board approved a dividend hike of almost 8.1%, raising the quarterly cash dividend from 18.5 cents per share to 20 cents. The raised dividend will be paid on Jan 10, 2023, to shareholders of record as of Dec 16, 2022.
However, rising operating expenses pose a threat to the company's bottom line. Total operating expenses jumped 8.6% year over year in third-quarter 2022. Depreciation of flight equipment costs rose 7.8%. Selling, general and administrative expenses increased 27.8% year over year in the period.
Some better-ranked stocks from the broader Zacks Transportation sector are Air Transport Services Group (ATSG - Free Report) , Ryder Systems (R - Free Report) and Teekay Tankers Ltd. (TNK - Free Report) ), each currently carrying a Zacks Rank #2 (Buy).
ATSG has an expected earnings growth rate of 34.94% for the current year. ATSG delivered a trailing four-quarter earnings surprise of 17.78%, on average.
The Zacks Consensus Estimate for ATSG’s current-year earnings has improved 5.2% over the past 90 days. Shares of ATSG have gained 5.6% over the past year.
Ryder has an expected earnings growth rate of 67.12% for the current year. R delivered a trailing four-quarter earnings surprise of 30.13%, on average.
The Zacks Consensus Estimate for R’s current-year earnings has improved 6.9% over the past 90 days. Shares of R have gained 5% over the past year.
Teekay Tankers has an expected earnings growth rate of 214.91% for the current year. TNK delivered a trailing four-quarter earnings surprise of 42.23%, on average. Teekay Tankers has a long-term expected growth rate of 3%.
The Zacks Consensus Estimate for TNK’s current-year earnings has improved 95% over the past 90 days. Shares of TNK have soared 142.9% over the past year.
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Air Lease (AL) Benefits From Fleet Growth Amid Rising Costs
Air Lease Corporation’s (AL - Free Report) top line is benefiting from continuous growth in its fleet.
The company recently reported third-quarter 2022 earnings of 90 cents per share, which surpassed the Zacks Consensus Estimate of 89 cents and improved 3.4% year over year on the back of an increase in revenues. Total revenues of $561.3 million lagged the Zacks Consensus Estimate of $570 million. However, the top line jumped 7% year over year.
Air Lease Corporation Price, Consensus and EPS Surprise
Air Lease Corporation price-consensus-eps-surprise-chart | Air Lease Corporation Quote
How is Air Lease Doing?
Total revenues jumped 7% year over year in the third quarter of 2022, owing to the continuous growth in Air Lease’s fleet, lower lease restructuring losses and higher aircraft sales, trading and other revenues. During the third quarter of 2022, AL took delivery of a total of 14 aircrafts, representing approximately $843 million in aircraft investments. As of Sep 30, 2022, Air Lease’s fleet included 405 owned and 87 managed aircraft, with 412 new aircraft orders from Boeing and Airbus.
Revenues from the rental of flight equipment climbed 4.2% year over year to $541.39 million in the reported quarter. As of Sep 30, 2022, Air Lease owned 405 aircraft with a net book value of $23.9 billion. The total fleet size at the end of the third quarter was 904 (including the owned fleet of 405) compared with 911 at the end of June 2022.
Strong freight and cargo markets are supporting demand for the company’s wide-body passenger aircraft. Continued recovery in airline operations is further driving lease demand. Higher lease demand and rising interest rates and inflation indicate growing lease rate environment, which bodes well for Air Lease.
The company’s efforts to reward its shareholders are encouraging. Concurrent with the third quarter of 2022 earnings release, Air Lease’s board approved a dividend hike of almost 8.1%, raising the quarterly cash dividend from 18.5 cents per share to 20 cents. The raised dividend will be paid on Jan 10, 2023, to shareholders of record as of Dec 16, 2022.
However, rising operating expenses pose a threat to the company's bottom line. Total operating expenses jumped 8.6% year over year in third-quarter 2022. Depreciation of flight equipment costs rose 7.8%. Selling, general and administrative expenses increased 27.8% year over year in the period.
Zacks Rank and Stocks to Consider
Air Lease currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks from the broader Zacks Transportation sector are Air Transport Services Group (ATSG - Free Report) , Ryder Systems (R - Free Report) and Teekay Tankers Ltd. (TNK - Free Report) ), each currently carrying a Zacks Rank #2 (Buy).
ATSG has an expected earnings growth rate of 34.94% for the current year. ATSG delivered a trailing four-quarter earnings surprise of 17.78%, on average.
The Zacks Consensus Estimate for ATSG’s current-year earnings has improved 5.2% over the past 90 days. Shares of ATSG have gained 5.6% over the past year.
Ryder has an expected earnings growth rate of 67.12% for the current year. R delivered a trailing four-quarter earnings surprise of 30.13%, on average.
The Zacks Consensus Estimate for R’s current-year earnings has improved 6.9% over the past 90 days. Shares of R have gained 5% over the past year.
Teekay Tankers has an expected earnings growth rate of 214.91% for the current year. TNK delivered a trailing four-quarter earnings surprise of 42.23%, on average. Teekay Tankers has a long-term expected growth rate of 3%.
The Zacks Consensus Estimate for TNK’s current-year earnings has improved 95% over the past 90 days. Shares of TNK have soared 142.9% over the past year.