Air Transport Services Group (NASDAQ: ATSG) reported Q1 EPS of $0.16, $0.05 better than the analyst estimate of $0.11. Revenue for the quarter came in at $485.5 million versus the consensus estimate of $485.92 million.

GUIDANCE:

Air Transport Services Group sees FY2024 EPS of $0.55-$0.80, versus the consensus of $0.70.

• Taking into account the flying opportunities from ten more Amazon 767 freighters, ATSG expects Adjusted EBITDA of approximately $516 million in 2024, an increase of $10 million from the outlook provided in February 2024. This forecast excludes any contribution from additional aircraft leases or flying opportunities not currently under contractual commitment. This projection assumes the startup of all ten Amazon-provided 767-300s prior to December 1, 2024, and costs associated with bringing them into service and adding over 50 additional pilots at ABX Air. The Company continues to see the potential for additional Adjusted EBITDA from new lease commitments for available aircraft and opportunities for additional flying.
• Capital spending expectations for 2024 remain unchanged at $410 million, down $380 million from 2023. ATSG's total projected capital spend includes growth capital of $245 million.
• The projection for Adjusted EPS remains unchanged at 55 cents to 80 cents diluted for 2024, assuming a stable share count at current levels.
• Hete concluded, “We have made significant progress toward achieving positive free cash flow in 2024. The expansion of our flying agreement with Amazon should only help reach that goal. Our amended agreement also provides opportunity for a combination of up to ten lease extensions and/or additional assigned aircraft, beyond the initial ten we will bring into service this year. Furthermore, CAM is well-positioned to lease additional freighters to other customers with minimal incremental capital investment as market demand improves. We look forward to further cash flow improvement next year, with increased Adjusted EBITDA and even lower capex."

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