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Atlas Air Worldwide Holdings (AAWW) Tops Q2 EPS by 53c

August 2, 2018 8:04 AM EDT

Atlas Air Worldwide Holdings (NASDAQ: AAWW) reported Q2 EPS of $1.75, $0.53 better than the analyst estimate of $1.22. Revenue for the quarter came in at $666.1 million versus the consensus estimate of $634.65 million.

Outlook:

We are raising our outlook for 2018 to reflect our strong first-half results and our continued expectation of significant volume, revenue, and earnings growth.

Globally, economic activity is expanding. The airfreight market is solid, and airfreight tonnage continues to grow from record levels.

As a result, we see volumes rising approximately 19% to around 300,000 block hours in 2018, with about 75% of the hours in ACMI and the balance in Charter.

For the full year, we expect our revenue to exceed $2.6 billion, our adjusted EBITDA to increase to more than $520 million, and our adjusted net income to grow by 45% to 50% compared with 2017.

Aircraft maintenance expense in 2018 is expected to total approximately $330 million, mainly reflecting an increase in daily line maintenance due to the anticipated growth in block hours. Depreciation and amortization is expected to total approximately $220 million. In addition, core capital expenditures, which exclude aircraft and engine purchases, are expected to total approximately $105 to $115 million, mainly for parts and components for our fleet.

We also expect our full-year 2018 adjusted effective income tax rate to be approximately 15%.

For the third quarter of 2018, we expect adjusted EBITDA to exceed $120 million, and adjusted net income to increase by an upper-30% to lower-40% level compared with third-quarter 2017 adjusted net income of $29.7 million.

During the third quarter, we expect our Titan dry-leasing subsidiary to renew its participation in an aircraft-leasing incentive program in Singapore. As a result, we expect to record a deferred income tax benefit of approximately $8.2 million in the third quarter and to benefit from a reduced income tax rate going forward.

Also in the third quarter, we anticipate a ratification bonus related to an interim agreement to enhance the terms and conditions of employment of our Southern Air, Inc. pilots. The agreement is subject to ratification by the Southern Air pilots in a process that we expect to be completed by mid-August.

We provide guidance on an adjusted basis because we are unable to predict, with reasonable certainty, the effects of outstanding warrants and other items that could be material to our reported results.

For earnings history and earnings-related data on Atlas Air Worldwide Holdings (AAWW) click here.



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