Air Lease's (AL) Earnings Beat Estimates in Q4, Down Y/Y

Air Lease Corporation’s AL fourth-quarter 2019 earnings of $1.42 per share   surpassed the Zacks Consensus Estimate by 4 cents. However, the bottom line declined 13.9% on a year-over-year basis due to increase in operating costs. However, quarterly revenues of $548.6 million not only surpassed the Zacks Consensus Estimate of $539.2 million, but also increased 21.9% on a year-over-year basis.

This year-over-year uptick in top line can be primarily attributed to 15.4% increase in revenues from the rental of flight equipment.  Notably, rental of flight equipment revenues contributed 91.9% to the top line.

Other Statistics

Revenues from aircraft sales, trading activity and other sources surged more than 100% to $44.2 million in the reported quarter. Total expenses rose 23.1% to $342.1 million due to higher interest expenses, selling, general and administrative costs as well as other factors.

During the December-end quarter, the carrier received delivery of 11 aircraft in its fleet and purchased one aircraft from the secondary market, which represented $825 million in aircraft investments. As of Dec 31, 2019, Air Lease owned 292 aircraft in the operating lease portfolio, with a net book value of $18.7 billion. Total fleet size at the end of 2019 was 858 (including owned fleet of 292) compared with 758 (including owned fleet of 275) at 2018-end.

In sync with its fleet-modernization efforts, this Los Angeles, CA-based company finalized deals to purchase an additional 102 aircraft (25 Airbus A321neo aircraft, 27 Airbus A321neo XLR and 50 Airbus A220 aircraft) with purchase option for an additional 25 Airbus A220 jets.

In 2020, the company expects to deliver 46 aircraft that represents roughly 4.1 billion in aircraft investment.

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 #4 (Sell), exited the year with cash and cash equivalents of $317.5 million compared with $300.1 million at 2018 end. As of December end quarter, the company has $13.6 billion of debt financing, net of discount and issuance costs, compared with $11.66 billion as of Dec 31, 2018.

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

Upcoming Releases

Investors interested in the broader Transportation sector are awaiting fourth-quarter 2019 earnings reports from key players like Gol Linhas GOL, Hertz Global Holdings HTZ and Azul SA AZUL.

Gol and Hertz will release fourth-quarter numbers on Feb 20 and Feb 24 respectively, whereas Azul will release on Mar 12.

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