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Air Transport Services (ATSG) Gains on E-Commerce, Costs Ail

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We recently issued an updated report on Air Transport Services Group, Inc. ATSG.

In this coronavirus-ravaged world, e-commerce is gaining momentum amid the pandemic-induced social-distancing protocols, quarantine and lockdowns. Despite the aforementioned disruptions, the company’s airline operations were strong in the first nine months of 2020.

Owing to higher demand for its cargo aircraft, the company expects 2020 adjusted EBITDA to be at least $490 million. The projection indicates an improvement from the 2019 reported figure of $452 million.

The company performed very well in the third quarter of 2020 reporting better-than-expected earnings per share and revenues. Moreover, both metrics improved year over year. While revenues from the Cargo Aircraft Management segment climbed 7.4%, the same from aircraft, crew, maintenance & insurance services increased 10.3%.

Meanwhile, rising capital expenses at Air Transport Services Group is limiting the company’s bottom-line growth. Notably, capital expenditures soared 17% to $394.3 million in the first nine months of 2020 mainly due to costs incurred for the purchase of five Boeing 767 aircraft apart from expenses related to freighter modification.

Zacks Rank & Stocks to Consider

Air Transport Services currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Transportation sector are Knight-Swift Transportation Holdings Inc. KNX, Landstar System, Inc. LSTR and Herc Holdings Inc. HRI. Landstar and Knight-Swift carry a Zacks Rank #2 (Buy), while Herc Holdings sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, Landstar and Herc Holdings is pegged at 15%, 12% and 12.6%, respectively.

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KnightSwift Transportation Holdings Inc. (KNX) : Free Stock Analysis Report
 
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Landstar System, Inc. (LSTR) : Free Stock Analysis Report
 
Herc Holdings Inc. (HRI) : Free Stock Analysis Report
 
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