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Air Lease's (AL) Q1 Earnings Miss Estimates, Decline Y/Y

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Air Lease Corporation‘s (AL - Free Report) first-quarter 2020 earnings of $1.17 per share missed the Zacks Consensus Estimate by 11 cents. Also, the bottom line declined 4.9% on a year-over-year basis due to increase in operating costs. Quarterly revenues of $511.4 million missed the Zacks Consensus Estimate of $545.2 million, but increased 9.73% on a year-over-year basis.

This year-over-year uptick can be primarily attributed to 9% increase in revenues from the rental of flight equipment.  Notably, rental of flight equipment revenues contributed 97% to the top line.

Other Statistics

Revenues from aircraft sales, trading activity and other sources surged 42.5% to $14.7 million in the reported quarter. Total expenses rose 16.7% to $339.7 million due to higher interest expenses, selling, general and administrative costs as well as other factors.

During the March-end quarter, the carrier received delivery of eight aircraft in its fleet and purchased one aircraft from the secondary market, which represented $709 million in aircraft investments. As of Mar 31, Air Lease owned 300 aircraft in the operating lease portfolio, with a net book value of $19.2 billion. Total fleet size at the end of first quarter was 806 (including owned fleet of 300) compared with 858 (including owned fleet of 292) at 2019-end.

Thanks to the COVID-19 outbreak, the company reduced its capital expenditures in aircraft investments and is expecting to minimize aircraft sales for the rest of 2020.

In order to counter the COVID-19 impact in the financial market, Air Lease is maintaining a significant liquid position with $6.3 billion as of Mar 31, 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 quarter with cash and cash equivalents of $732.7 million compared with $317.4 million at 2019 end. As of March end, the company had $14.4 billion of debt financing, net of discount and issuance costs compared with $13.6 billion as of Dec 31, 2019.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Air Lease cleared a quarterly cash dividend of 15 cents per share (annualized 60 cents). The amount will be paid on Jul 9, 2020 to its shareholders on record as on Jun 5.

Sectorial Snapshot

Unlike Air Lease, there are a few companies in the Zacks Transportation sector like Werner Enterprises, Inc. (WERN - Free Report) , Union Pacific Corporation (UNP - Free Report) and Canadian Pacific Railway Limited (CP - Free Report) that have surpassed earnings estimates this time around.

Werner Enterprises reported first-quarter 2020 earnings per share (excluding 7 cents from non-recurring items) of 40 cents, which surpassed the Zacks Consensus Estimate of 35 cents. However, the bottom line declined 23.1% year over year.

Union Pacific’s first-quarter 2020 earnings of $2.15 per share surpassed the Zacks Consensus Estimate of $1.86. Moreover, the bottom line increased 11.4% on a year-over-year basis.

Canadian Pacific’s first-quarter 2020 earnings (excluding $1.08 from non-recurring items) of $3.3 (C$4.42) per share surpassed the Zacks Consensus Estimate of $2.86. Quarterly earnings surged more than 55% year over year.

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