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Air Transport Services (ATSG) Q2 Earnings & Revenues Beat

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Air Transport Services Group’s (ATSG - Free Report) second-quarter 2021 earnings (excluding 39 cents from non-recurring items) of 35 cents per share surpassed the Zacks Consensus Estimate of 26 cents. The bottom line declined year over year.

Total revenues of $409.9 million outperformed the Zacks Consensus Estimate of $386.6 million and also increased 8.5% year over year, driven by higher revenues from the Cargo Aircraft Management (“CAM”) segment and other operations. Shares of the company gained more than 5% in after-market trading on Aug 5.

Before eliminations, revenues from the ACMI (aircraft, crew, maintenance & insurance) services unit declined approximately 5% year over year to $273.30 million. CAM segment revenues jumped 18.3% year over year to $88.59 million, while revenues from other operations rose 26.2% to $97.24 million.


ACMI Services revenues were affected by ramped-down charter passenger operations for the commercial customers of Omni Air and lower 757 combi operations for the military, besides the retirement of four Boeing 757 freighters (operated by the company for DHL) in 2020. Total revenue block hours climbed 18% year over year primarily due to 26% increase in block hours for air cargo operations. Revenues from the CAM segment in the reported quarter were bumped up by leases of 17 more 767 freighters. Segmental revenues from external customers rose 33% in the June quarter.

As of Jun 30, 2021, the company’s total in-service fleet consisted of 110 Boeing aircraft (19 passenger and 91 freighter), compared with 94 at the end of second-quarter 2020. The fleet also includes aircraft not owned by CAM. Meanwhile, 80 CAM-owned Boeing 767 freighter aircraft were leased to external customers.

Total operating expenses dipped 8.3% in the June quarter to $325.25 million. Capital expenditure was $300.2 million, up 12.9% in the first half of 2021. The amount included $200.1 million for the acquisition and modification of passenger aircraft for freighter conversion.

Outlook

Air Transport Services, currently carrying a Zacks Rank #2 (Buy), expects 2021 adjusted EBITDA to be at least $525 million, indicating an improvement of 6% from the 2020 reported figure of $497 million. Capital expenditures for 2021 are estimated to be approximately $550 million compared with the previous expectation of $500 million. The increase in guidance is due to the company’s commitment to acquire five more passenger aircraft (four Boeing 767-300s and one Airbus A321-200) for conversion. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Sectorial Snapshots

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

Knight-Swift Transportation Holdings (KNX - Free Report) , carrying a Zacks Rank #2, reported second-quarter 2021 earnings (excluding 6 cents from non-recurring items) of 98 cents per share, surpassing the Zacks Consensus Estimate of 87 cents. Total revenues of $1,315.7 million also outperformed the Zacks Consensus Estimate of $1,300.8 million.

United Parcel Service (UPS - Free Report) , carrying a Zacks Rank #3 (Hold), reported second-quarter 2021 earnings (excluding a penny from non-recurring items) of $3.06 per share, beating the Zacks Consensus Estimate of $2.75. Quarterly revenues of $23,424 million also outperformed the Zacks Consensus Estimate of $23,085.4 million.

Ryanair Holdings (RYAAY - Free Report) , carrying a Zacks Rank #4 (Sell), incurred a loss of $1.46 per share in the first quarter of fiscal 2022 (ended Jun 30, 2021), narrower than the Zacks Consensus Estimate of a loss of $1.50. Quarterly revenues of $446.4 million fell short of the Zacks Consensus Estimate of $459 million.