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Air Lease (AL) Q1 Earnings & Revenues Miss, Decline Y/Y

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Air Lease Corporation’s (AL - Free Report) first-quarter 2021 earnings of 70 cents per share missed the Zacks Consensus Estimate of $1.01. Moreover, the bottom line plunged 40.2% year over year due to lower revenues and increased costs. Results reflect the impact of coronavirus on the company’s operations.

Quarterly revenues of $474.8 million lagged the Zacks Consensus Estimate of $510.9 million and also declined 7.2% year over year due to 5.7% decrease in revenues from the rental of flight equipment. Notably, rental of flight equipment revenues contributed 98.6% to the top line.

Other Statistics

Revenues from aircraft sales, trading activity and other sources fell 54.2% to $6.73 million in the reported quarter. Total expenses rose 9.3% to $371.30 million due to higher interest expenses and depreciation of flight equipment costs. The company’s collection rate was 84% for the first quarter, compared with 88% in the fourth quarter of 2020.

As of Mar 31, 2021, Air Lease owned 342 aircraft with a net book value of $20.8 billion. Total fleet size at the end of the first quarter was 799 (including owned fleet of 342), flat compared with December 2020.

Air Lease Corporation Price, Consensus and EPS Surprise

 

Air Lease Corporation Price, Consensus and EPS Surprise

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

Liquidity

Air Lease, carrying a Zacks Rank #5 (Strong Sell), exited the first quarter with cash and cash equivalents of $1.33 billion compared with $1.73 billion at 2020-end. As of Mar 31, 2021, the company had $16.17 billion of debt financing, net of discount and issuance costs compared with $16.52 billion as of Dec 31, 2020.

At the end of the first quarter, Air Lease had a strong liquidity position of $7.5 billion, which should help the company tackle coronavirus-induced challenges efficiently.

Dividend Update

Air Lease’s board approved a quarterly cash dividend of 16 cents per share, payable to shareholders on Jul 9, of record as of Jun 8. Additionally, the company’s board extended its share-repurchase program, authorizing to buyback up to $100 million through Dec 31, 2021.

Outlook

Air Lease anticipates its collection rate to remain under pressure due to the effects of COVID-19. While the company expects aircraft sales activity to increase in 2021 compared with the year-ago levels, it does not expect the same to return to pre-pandemic levels in the year. Additionally, the company anticipates reduced capital expenditures to lower revenue growth in 2021.

Sectorial Snapshot

Let’s take a look at some of the other recently released earnings reports from companies within the Zacks Transportation sector.

Canadian National Railway Company (CNI - Free Report) , carrying a Zacks Rank #3 (Hold), reported first-quarter 2021 earnings (excluding 11 cents from non-recurring items) of 97 cents per share (C$1.23), missing the Zacks Consensus Estimate of 99 cents. Quarterly revenues of $2,791.6 million (C$3,535 million) lagged the Zacks Consensus Estimate of $2,813.1 million.

Landstar System (LSTR - Free Report) , sporting a Zacks Rank #1 (Strong Buy), reported first-quarter 2021 earnings of $2.01 per share, surpassing the Zacks Consensus estimate of $1.61. Additionally, revenues of $1,287.5 million outperformed the Zacks Consensus Estimate of $1,142.5 million. You can see the complete list of today's Zacks #1 Rank stocks here.

Southwest Airlines (LUV - Free Report) , carrying a Zacks Rank of 3, incurred a loss of $1.72 per share (excluding $1.91 from non-recurring items) in the first quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $1.82. Meanwhile, operating revenues of $2,052 million surpassed the Zacks Consensus Estimate of $2,031.7 million.

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