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What's in the Offing for Air Lease (AL) in Q3 Earnings?

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Air Lease Corporation (AL - Free Report) is scheduled to report third-quarter 2020 results on Nov 9, after market close.

The Zacks Consensus Estimate for the company’s third-quarter earnings has been revised downward by 1.9% in the last 60 days. Let’s take a look at the factors that are expected to have influenced the company’s performance in the quarter.

Steady growth in Air Lease’s fleet is anticipated to have aided its top line in the third quarter. During the quarter, the company delivered seven new aircraft including one Airbus A320neo, four A321neos, one A350-900 and one A350-1000. Also, the company’s aircraft investment in the quarter totaled nearly $0.6 billion. Additionally, higher revenues from rentals of flight equipment are expected to get reflected in the top line.

However, with air-travel demand significantly suppressed due to coronavirus concerns, Air Lease is experiencing weakness in lease demand, which is expected to have hurt performance in the to-be-reported quarter. Airline companies’ deferral of aircraft deliveries to cope with the crisis is also anticipated to have weighed on the company’s performance in the third quarter. Moreover, rising operating expenses are expected to get reflected in the bottom line.

Air Lease Corporation Price and EPS Surprise

Air Lease Corporation Price and EPS Surprise

Air Lease Corporation price-eps-surprise | Air Lease Corporation Quote

What the Zacks Model Unveils

Our proven Zacks model does not conclusively predict a beat for Air Lease this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. However, that is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Air Lease has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate is pegged at $1.03.

Zacks Rank: Air Lease carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Highlights of Q2 Earnings

In the last-reported quarter, Air Lease delivered an earnings surprise of 23.5%. The bottom line also increased 14.5% on a year-over-year basis. Total revenues also surpassed the Zacks Consensus Estimate and improved 10.6% year over year owing to 7.3% rise in revenues from the rental of flight equipment.

Stocks to Consider

Investors interested in the broader Transportation sector may consider Golar LNG Limited (GLNG - Free Report) and Genco Shipping Trading Limited (GNK - Free Report) as these stocks possess the right combination of elements to beat on earnings this reporting cycle.

Golar LNG has an Earnings ESP of +2.10% and a Zacks Rank #3.

Genco Shipping has an Earnings ESP of +33.33% and a Zacks Rank of 3. The company will release third-quarter 2020 results on Nov 4.

A Sectoral Outperformer

Investors may also want to recapitulate the third-quarter results of a prominent sector participant, which surpassed earnings estimates. Below is one such company.

United Parcel Service (UPS - Free Report) , carrying a Zacks Rank #2, reported third-quarter 2020 earnings (excluding 4 cents from non-recurring items) of $2.28 per share, outperforming the Zacks Consensus Estimate of $1.86. The bottom line also improved 10.1% year over year. The company generated revenues of $21,238 million in the quarter, outpacing the Zacks Consensus Estimate of $20,079.6 million.

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