It has been about a month since the last earnings report for Air Lease (AL). Shares have added about 1.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Air Lease 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 Surpasses Earnings Estimates in Q1
Air Lease's earnings of $1.23 per share surpassed the Zacks Consensus Estimate of $1.21. Quarterly revenues came in at $466.1 million, outpacing the Zacks Consensus Estimate of $459.1 million. The top line also increased 22.3% year over year, primarily owing to consistent fleet growth.
Meanwhile, revenues from rental of flight equipment, which accounted for bulk of the top line, climbed 20.6% from the year-ago figure. Also, aircraft sales and trading activity revenues surged more than 200% to $10.31 million. Total expenses rose 21.3% to $291.11 million, thanks to higher interest expenses, and selling, general and administrative expenses.
During the reported quarter, the company received a delivery of 11 planes and sold six aircraft, thereby exiting the period with a fleet of 280 in its portfolio, up from 275 at the end of 2018. The average fleet net book value totaled $16.3 billion compared with $15.7 billion in December 2018.
Air Lease’s board cleared a quarterly cash dividend of 13 cents per share, payable Jul 11, 2019, to its shareholders of record as of Jun 5.
Air Lease exited the first quarter with cash and cash equivalents of $285.72 million compared with $300.13 million at the end of December 2018. As of Mar 31, 2019, the company had $11.87 billion of debt financing, net of discount and issuance costs compared with $11.54 billion as of Dec 31, 2018.
The company generated $261.25 million during the first quarter compared with $246.67 million in the first quarter of 2018.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
At this time, Air Lease has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile 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.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Air Lease has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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