Atlas Air Worldwide Holdings (AAWW) Tops Q4 EPS by 18c

Atlas Air Worldwide Holdings (NASDAQ: AAWW) reported Q4 EPS of $3.12, $0.18 better than the analyst estimate of $2.94. Revenue for the quarter came in at $765 million versus the consensus estimate of $755.3 million.

2019 Outlook*

We expect continued solid business and earnings growth in 2019.

In addition to the essential building blocks we have set in place, we will have a full year of flying by the aircraft we added to our fleet in 2018. We also see opportunities to grow with existing customers, such as the incremental flying we will begin to do for Nippon Cargo Airlines, and to add new ones.

Global economic activity and airfreight demand are expected to expand at a moderate pace, while airfreight tonnage continues to grow from record levels.

As a result, we expect to generate higher volumes, revenue, adjusted EBITDA and adjusted net income in 2019. We see volumes rising to around 340,000 block hours (with over 75% in ACMI and the balance in Charter), revenue of approximately $3.0 billion, and adjusted EBITDA of about $600 million.

We also anticipate that our adjusted net income will grow by a mid- to upper-single-digit percentage compared with 2018. We expect our full-year 2019 adjusted income tax rate to be approximately 20%.

Similar to historical patterns, we anticipate over three-quarters of our adjusted net income in 2019 occurring in the second half.

In addition, we expect to fly approximately 75,000 block hours (over 75% in ACMI) in the first quarter of 2019, with revenue of approximately $680 million, adjusted EBITDA of about $110 million, and adjusted net income similar to our adjusted net income of $23.8 million in the first quarter of 2018. Our first-quarter 2019 outlook includes revenue in our Dry Leasing segment from maintenance payments related to the scheduled return of a 777-200 cargo aircraft, which we expect to receive late in the quarter, partially offset by higher heavy maintenance expense compared with the year-ago first quarter.

Aircraft maintenance expense in 2019 is expected to total approximately $420 million. The increase from 2018 mainly reflects an increase in daily line maintenance driven by the growth of our fleet and the anticipated growth in our block hours this year. Similar to 2018, we expect line maintenance to comprise about two-thirds of our total maintenance expense for the year.

Depreciation and amortization is expected to total approximately $260 million. In addition, core capital expenditures, which exclude aircraft and engine purchases, are expected to total approximately $135 to $145 million, mainly for parts and components for our fleet.

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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