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WLFC Q3 Earnings Dip Y/Y Amid High Operating Costs, Revenues Up 25%
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Shares of Willis Lease Finance Corporation (WLFC - Free Report) have declined 4.6% since the company reported its earnings for the quarter ended Sept. 30, 2025. This compares to the S&P 500 index’s 1.8% decline over the same time frame. Over the past month, the stock has declined 8.3% compared with the S&P 500’s 1.6% growth.
In the third quarter of 2025, WLFC reported earnings per share (EPS) of $3.25, down from $3.37 in the year-ago quarter.
The company posted total revenues of $183.4 million, marking a robust 25.4% increase from $146.2 million in the prior-year period. This growth was underpinned by strong performance in both lease rent and maintenance reserve revenues. Lease rent revenues reached a record $76.6 million, up 17.9% year over year, while maintenance reserve revenue soared 52.8% to $76.1 million.
The company reported income from operations of $38 million, an increase of 12.8%, and pre-tax income of $43.2 million, up 25.4% compared to the same quarter last year.
Despite the higher revenues, net income attributable to common shareholders edged down slightly to $22.9 million from $23.1 million, a decline of 1.1%, due to higher expenses, including a significant income tax charge and increased general and administrative costs.
Willis Lease Finance Corporation Price, Consensus and EPS Surprise
The third quarter showcased WLFC's continued operational strength, as evidenced by a portfolio utilization rate of 86%, up from 82.9% a year earlier. Notably, the company recorded long-term maintenance revenues of $29.5 million, a sharp rise from $1.2 million in the third quarter of 2024. This figure is recognized when lease periods end and associated liabilities are released, reflecting the ongoing monetization of maintenance reserves.
Gains on the sale of leased equipment totaled $16.1 million during the quarter, driven by the sale of 10 engines, one airframe and other parts. This represents a significant increase over the $9.5 million gain recorded in the same period last year.
Management Commentary
CEO Austin Willis highlighted the resilience and adaptability of WLFC’s business model, especially amid a year marked by “multiple one-time events.” He attributed the quarter’s success to strong demand for WLFC’s leasing services, supported by high engine utilization rates and customer efforts to avoid costly engine shop visits. The company’s decision to raise its quarterly dividend from 25 cents to 40 cents per share was framed as a vote of confidence in its cash-generative business model.
Executive VP and CFO Scott Flaherty underscored the firm’s high-quality recurring revenue base, driven by core lease and maintenance activities. He also emphasized improvements in the company’s asset base, citing a total lease portfolio of $2.9 billion.
Factors Influencing Results
Higher revenues were partially offset by increased costs across several categories. General and administrative (G&A) expenses rose 22.9% to $49.2 million, primarily due to expanded headcount, higher consultant fees, and elevated stock-based compensation costs. Additionally, write-downs of equipment surged to $10.2 million from just $0.6 million a year ago, largely due to impairments of off-lease assets, many of which were repositioned for sale.
Technical expenses and depreciation also increased notably, reflecting the growth in WLFC’s lease portfolio and a rise in the number of engines entering their depreciation cycle. Interest expense rose 22.9% to $34.2 million, driven by higher debt levels and rates.
The company’s effective tax rate stood at a notably high 43.7%, up from 30.1% in Q3 2024. Management attributed this to recent tax law changes, including the Section 162(m) limitation on compensation deductibility, which led to an $18.9 million tax expense for the quarter.
Other Developments
During the quarter, WLFC completed several asset purchases, acquiring 16 engines and one aircraft, including eight CF6-80s, two LEAP-1Bs, and one aircraft from Porter Aircraft Leasing Corp. Additionally, the company sold 10 engines, one airframe, and various parts, contributing to the $16.1 million gain on asset sales.
On the personnel front, WLFC appointed Pascal Picano as Senior Vice President of Aircraft Leasing and Trading, signaling an intent to further expand and professionalize its leasing operations. The company also highlighted future capital deployment plans, including investments in SAF production and additional aircraft leasing ventures.
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WLFC Q3 Earnings Dip Y/Y Amid High Operating Costs, Revenues Up 25%
Shares of Willis Lease Finance Corporation (WLFC - Free Report) have declined 4.6% since the company reported its earnings for the quarter ended Sept. 30, 2025. This compares to the S&P 500 index’s 1.8% decline over the same time frame. Over the past month, the stock has declined 8.3% compared with the S&P 500’s 1.6% growth.
In the third quarter of 2025, WLFC reported earnings per share (EPS) of $3.25, down from $3.37 in the year-ago quarter.
The company posted total revenues of $183.4 million, marking a robust 25.4% increase from $146.2 million in the prior-year period. This growth was underpinned by strong performance in both lease rent and maintenance reserve revenues. Lease rent revenues reached a record $76.6 million, up 17.9% year over year, while maintenance reserve revenue soared 52.8% to $76.1 million.
The company reported income from operations of $38 million, an increase of 12.8%, and pre-tax income of $43.2 million, up 25.4% compared to the same quarter last year.
Despite the higher revenues, net income attributable to common shareholders edged down slightly to $22.9 million from $23.1 million, a decline of 1.1%, due to higher expenses, including a significant income tax charge and increased general and administrative costs.
Willis Lease Finance Corporation Price, Consensus and EPS Surprise
Willis Lease Finance Corporation price-consensus-eps-surprise-chart | Willis Lease Finance Corporation Quote
Business Metrics Reflect Core Strength
The third quarter showcased WLFC's continued operational strength, as evidenced by a portfolio utilization rate of 86%, up from 82.9% a year earlier. Notably, the company recorded long-term maintenance revenues of $29.5 million, a sharp rise from $1.2 million in the third quarter of 2024. This figure is recognized when lease periods end and associated liabilities are released, reflecting the ongoing monetization of maintenance reserves.
Gains on the sale of leased equipment totaled $16.1 million during the quarter, driven by the sale of 10 engines, one airframe and other parts. This represents a significant increase over the $9.5 million gain recorded in the same period last year.
Management Commentary
CEO Austin Willis highlighted the resilience and adaptability of WLFC’s business model, especially amid a year marked by “multiple one-time events.” He attributed the quarter’s success to strong demand for WLFC’s leasing services, supported by high engine utilization rates and customer efforts to avoid costly engine shop visits. The company’s decision to raise its quarterly dividend from 25 cents to 40 cents per share was framed as a vote of confidence in its cash-generative business model.
Executive VP and CFO Scott Flaherty underscored the firm’s high-quality recurring revenue base, driven by core lease and maintenance activities. He also emphasized improvements in the company’s asset base, citing a total lease portfolio of $2.9 billion.
Factors Influencing Results
Higher revenues were partially offset by increased costs across several categories. General and administrative (G&A) expenses rose 22.9% to $49.2 million, primarily due to expanded headcount, higher consultant fees, and elevated stock-based compensation costs. Additionally, write-downs of equipment surged to $10.2 million from just $0.6 million a year ago, largely due to impairments of off-lease assets, many of which were repositioned for sale.
Technical expenses and depreciation also increased notably, reflecting the growth in WLFC’s lease portfolio and a rise in the number of engines entering their depreciation cycle. Interest expense rose 22.9% to $34.2 million, driven by higher debt levels and rates.
The company’s effective tax rate stood at a notably high 43.7%, up from 30.1% in Q3 2024. Management attributed this to recent tax law changes, including the Section 162(m) limitation on compensation deductibility, which led to an $18.9 million tax expense for the quarter.
Other Developments
During the quarter, WLFC completed several asset purchases, acquiring 16 engines and one aircraft, including eight CF6-80s, two LEAP-1Bs, and one aircraft from Porter Aircraft Leasing Corp. Additionally, the company sold 10 engines, one airframe, and various parts, contributing to the $16.1 million gain on asset sales.
On the personnel front, WLFC appointed Pascal Picano as Senior Vice President of Aircraft Leasing and Trading, signaling an intent to further expand and professionalize its leasing operations. The company also highlighted future capital deployment plans, including investments in SAF production and additional aircraft leasing ventures.