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Air Transport Services (ATSG) Q4 Earnings Top, Decrease Y/Y

Zacks Equity Research
·3-min read

Air Transport Services Group’s ATSG fourth-quarter 2020 earnings (excluding 31 cents from non-recurring items) of 38 cents per share surpassed the Zacks Consensus Estimate of 34 cents. However, the bottom line deteriorated 32.1% year over year due to the disappointing revenue performance. Further, revenues declined 1% year over year to $399.4 million. The top line also fell short of the Zacks Consensus Estimate of $414.7 million.

The top line was hurt by lower revenues from the ACMI (aircraft, crew, maintenance & insurance) services segment. Before eliminations, revenues from the ACMI services declined 6.1% to $275.32 million. Cargo Aircraft Management (CAM) segment climbed 11.6% to $83.36 million while revenues from other operations increased 7.5%.

Notably, revenues from the CAM segment in the reported quarter were bumped up by the deployment of 11 more 767-300 freighters. Segmental revenues from external customers rose 28% in the December quarter. However, the downside in revenues from the ACMI unit was due to the reduction in charter passenger operations for the commercial customers of Omni Air and lower 757 combi operations for the military. Due to the coronavirus-induced restrictions, Omni Air’s block hours for commercial passenger operations declined.

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

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The company’s total fleet included 106 aircraft (20 passenger and 86 cargo) in service at the end of the December quarter of 2020 compared with 98 at the end of the fourth quarter of 2019. Of the 106 planes, 100 were owned by CAM, four were leased to Omni Air by third parties and the remaining two were customer-provided.

Total operating expenses dipped 3.2% in the December quarter to $339.92 million, mainly owing to a 29.3% reduction in expenses on fuel. Capital expenditure flared up 11.1% to $510.4 million in 2020. The amount included $353.4 million on the purchase of 11 Boeing 767-300 jets.

Outlook

The company, currently carrying a Zacks Rank #4 (Sell), expects 2021 adjusted EBITDA to be at least $525 million, indicating an improvement of 6% from the 2020 reported figure of $497 million. Capital expenditures for 2021 are projected to be roughly identical to 2020 levels. 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 companies’ fourth-quarter earnings.

United Airlines UAL incurred a loss (excluding 6 cents from non-recurring items) of $7 per share in the fourth quarter of 2020, wider than the Zacks Consensus Estimate of a loss of $6.56. Moreover, operating revenues of $3,412 million lagged the Zacks Consensus Estimate of $3,420.4 million.

Delta Air Lines DAL incurred a loss (excluding $1.34 from non-recurring items) of $2.53 per share in the fourth quarter of 2020, wider than the Zacks Consensus Estimate of a loss of $2.43. However, total revenues of $3,973 million topped the Zacks Consensus Estimate of $3,754.5 million.

Southwest Airlines LUV incurred a loss of $1.29 per share (excluding 25 cents from non-recurring items) in the fourth quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of $1.69. Meanwhile, operating revenues of $2,013 million lagged the Zacks Consensus Estimate of $2,117.5 million.

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