Atlas Air Worldwide Holdings (AAWW) Reports Q1 EPS of $1.15, Offers Outlook

Atlas Air Worldwide Holdings (NASDAQ: AAWW) reported Q1 EPS of $1.15, versus $0.98 reported last year. Revenue for the quarter came in at $643.5 million versus the consensus estimate of $627.68 million.

GUIDANCE:

Atlas Air Worldwide Holdings sees Q2 2020 revenue of $770 million, versus the consensus of $684.8 million.

• We expect the positive trends that we are currently experiencing to continue throughout the remainder of the year, and expect a majority of our earnings to occur in the second half of this year. The evolving and uncertain environment related to COVID-19 makes it difficult to accurately predict the future impact on our results. As such, we are providing an outlook for the second quarter of 2020, but our full-year 2020 guidance provided on February 20 of this year no longer applies, and we will provide updates as the year progresses.
• We expect to fly approximately 80,000 block hours in the second quarter of 2020, with revenue of approximately $770 million, and adjusted EBITDA of about $165 million. Excluding the benefit from a refund of excess aircraft rent paid in previous years of approximately $25.0 million (after tax), we anticipate adjusted net income to grow approximately 40% to 50% compared with adjusted net income of $29.9 million in the first quarter of 2020. Including the benefit from a refund of excess aircraft rent paid in previous years, we anticipate adjusted net income to more than double compared with the first quarter of 2020.*
• We expect that earnings in the second quarter will benefit from continued charter demand, including several long-term charter programs at higher yields, driven by a reduction of airfreight capacity, increased demand for transporting goods and the disruption of global supply chains related to COVID-19; a refund of excess aircraft rent paid in previous years; flying the incremental CMI aircraft added to our fleet during 2019; and improved operating efficiencies and cost savings.
• We also expect these benefits to be partially offset by higher heavy maintenance expense; lower AMC demand driven by the military’s stop-movement order related to COVID-19; additional costs driven by COVID-19, including crew premium pay; other operational costs, including costs for continuing to provide a safe working environment for our employees; and higher crew costs related to increased pay rates resulting from our recent interim agreement with the pilots.
• In addition, the availability of hotels and restaurants, evolving COVID-19-related travel restrictions and health screenings, and cancellations of passenger flights by other airlines or airport closures could further impact our ability to position pilots to operate our aircraft.
• The second-quarter outlook also reflects the reactivation of three of our 747 converted freighters that had been previously parked, and our operation of a 777F that was previously in our dry-leasing business driven by the continued strong airfreight demand.
• While we are not providing an earnings outlook for the full year of 2020 at this time, we expect a majority of our earnings to occur in the second half of the year. Aircraft maintenance expense in 2020 is expected to total approximately $390 million. Depreciation and amortization is expected to total about $250 million. In addition, core capital expenditures, which exclude aircraft and engine purchases, are projected to total approximately $85 to $95 million, mainly for parts and components for our fleet.
• We also expect our full-year 2020 adjusted effective income tax rate to be approximately 22.0%.
• We provide guidance on an adjusted basis because we are unable to predict, with reasonable certainty, the effects of our outstanding warrant liability 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.

You May Also Be Interested In

• Gilead Sciences (GILD) Misses Q1 EPS by 288c
• Business First Bancshares, Inc. (BFST) Misses Q1 EPS by 7c
• Allison Transmission (ALSN) Tops Q1 EPS by 2c, Beats on Revenue; Offers FY24 Revenue Guidance