All:
Here is some of that Fool commentary I was talking about:
Atlas Air reported net earnings of $0.28 per share on revenues of $104.2 million. The earnings beat the Street's consensus number by four cents and topped the high-end estimate by a penny. It was also the first quarter ever for the company in which revenues exceeded $100 million. ATLS gained $1 3/8to $26 in active trading.
Beyond that -- and until I get the conference call summary written up -- I'll simply refer you to Atlas's press release and summarize a few points from the call.
First, Atlas enjoyed substantially lower maintenance costs and improved performance in the quarter from the five aircraft leased from FedEx. Atlas management said they expect this to continue in the current quarter; because of that, they upped their guidance for total block-hours to be flown in Q4 by approximately 1000 hours, to 21,000 to 21,500. Given Atlas's recent history of disappointing the Street, CFO Rick Shuyler emphasized that management would not upgrade their guidance unless they were very confident about the
numbers.
Second, delays at BOEING (NYSE: BA) (N) (S) could possibly push-out delivery of the four new 747-400s Atlas has on order. Management outlined their plans for filling any capacity gaps should that occur. Specifically, Boeing is working closely with Atlas to secure three aircraft for short-term lease, and Boeing will also compensate Atlas for losses due to delivery delays. In addition, Atlas is working on its own to secure early release of aircraft from
Philippine Airlines to Atlas.
Finally, in addressing concerns about possible effects of financial turbulence in Asia on Atlas's business, the company pointed out that all of their contracts are dollar-denominated and non-cancelable -- and that indeed nearly all aspects of the global air freight industry are conducted in U.S. dollars rather than in local currencies. Also, in the opinion of Atlas's management, devaluation of Asian currencies might well make goods from that continent even more attractive in world markets, thereby increasing rather than decreasing the need for air freight handlers. As it is, worldwide demand for lift capacity is exceptionally strong.
The will post a summary of ATLS conference call too. I'll try to get that posted here also...
Good luck!
Eric B. |
