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It has been about a month since the last earnings report for Air Lease Corporation AL. Shares have added about 1.2% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is AL due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Air Lease reported impressive first-quarter 2018 results. The company’s earnings per share (excluding 38 cents from non-recurring items) of $1.38 beat the Zacks Consensus Estimate of $1.10. Moreover, the bottom line soared significantly year over year. The metric was boosted by the reduced tax rate. Notably, effective tax rate in the period under discussion was 21.7% compared with 36.6% in the first quarter of 2017.
The company’s first-quarter revenues of $381.2 million also surpassed the Zacks Consensus Estimate of $379.6 million. The top line increased 5.8% year over year, driven by higher revenues from rental of flight equipment, which climbed 6.5% year over year to $377.86 million. Meanwhile, revenues from aircraft sales, trading and other sources plunged 39.5% to $3.35 million.
Total expenses (as reported) in the first quarter rose 6% to $239.89 million. During the quarter, the company purchased 9 aircrafts, thus concluding the quarter with 253 aircrafts in its portfolio. The average fleet net book value came in at $13.6 billion compared with $13.3 billion in December 2017.
The company inked a firm order with Boeing for eight new aircrafts. Deliveries are estimated to begin in 2020 and will continue until 2022.
The company’s board approved a quarterly cash dividend of 10 cents per share, payable Jul 10, 2018 to shareholders of record as of Jun 5.
Air Lease exited the quarter with cash and cash equivalents of $252.49 million compared with $292.2 million at the end of 2017. As of Mar 31, 2018, the company totaled $9.89 billion in debt financing, net of discounts and issuance costs, compared with $9.7 billion as of Dec, 31, 2017.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter compared to one lower. In the past month, the consensus estimate has shifted by 5.6% due to these changes.
Air Lease Corporation Price and Consensus
Air Lease Corporation Price and Consensus | Air Lease Corporation Quote
At this time, AL has an average Growth Score of C, however its Momentum is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for momentum investors while also being suitable for those looking for value and to a lesser degree growth.
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Interestingly, AL has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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