Air Transport Services (ATSG) Q2 Earnings Beat Estimates

Zacks Equity Research
·4 min read

Air Transport Services Group’s ATSG second-year 2020 earnings (excluding $2.25 from non-recurring items) of 47 cents per share surpassed the Zacks Consensus Estimate by 16 cents. Moreover, the bottom line improved 74.1% year over year. Results were aided by a 12.9% increase in total revenues to $377.8 million. The top line also surpassed the Zacks Consensus Estimate of $359.4 million.

Higher revenues from both segments contributed to the top line. While revenues from the Cargo Aircraft Management (CAM) segment climbed 8.3% to $79.4 million, the same from aircraft, crew, maintenance & insurance (ACMI) services. ascended 12.8% to $287.6 million.

Notably, revenues from the CAM segment were bumped up by the deployment of seven 767 freighters since Jun 30, 2019. Meanwhile, the uptick in revenues from the ACMI unit was owing to incremental charter assignments for Omni Air from the federal government in the current scenario. More frequency in air express network flying following deployment of flights to bring back people stranded abroad to the United States during the onset of the pandemic also boosted segmental results. Meanwhile, external revenues from other activities inched up 1.2% to $40.2 million owing to growth in aviation fuel sales and ground handling services.

Total operating expenses flared up 19.4% in the June quarter to $354.6 million due to a 22.2% rise in costs on salaries, wages and benefits. Capital expenses in first-half 2020 increased 23% to $265.9 million.

Air Transport Services Group, Inc Price, Consensus and EPS Surprise

Air Transport Services Group, Inc Price, Consensus and EPS Surprise
Air Transport Services Group, Inc Price, Consensus and EPS Surprise

Air Transport Services Group, Inc price-consensus-eps-surprise-chart | Air Transport Services Group, Inc Quote

2020 Outlook

Courtesy of upbeat demand for its cargo aircraft and related airline services and better-than-expected demand from governmental agencies for passenger charter flights in the June quarter, this currently Zacks Rank #3 (Hold) air cargo company expects 2020 adjusted EBITDA to be at least $470 million, indicating an improvement from the 2019 reported figure of $452 million. Capital expenditures for the ongoing year are now projected at roughly $465 million (earlier guidance: $420 million).

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

Sectorial Snapshots

Let’s look into some other Zacks Transportation sector participants’ second-quarter earnings results.

Kirby Corporation’s KEX second-quarter earnings of 42 cents per share were in line with the Zacks Consensus Estimate. Meanwhile, the bottom line plunged 46.8% year over year. Further, the company’s total revenues of $541.2 million lagged the Zacks Consensus Estimate of $618.4 million and also declined 29.8% year over year.

United Parcel Service’s UPS second-quarter earnings (excluding 10 cents from non-recurring items) per share of $2.13 surpassed the Zacks Consensus Estimate of $1.04. The bottom line also improved 8.7% year over year. Additionally, the company’s revenues of $20,459 million in the June quarter outperformed the Zacks Consensus Estimate of $17,344.4 million. Moreover, the top line rose13.4% on a year-over-year basis.

Norfolk Southern Corporation’s NSC second-quarter earnings of $1.53 per share beat the Zacks Consensus Estimate of $1.39. However, the bottom line slumped 43% on a year-over-year basis. Railway operating revenues in the quarter came in at $2,085 million, edging past the Zacks Consensus Estimate of $2,061.5 million. The company’s top line, however, fell 29% year over year.
 

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