Air Transport Services Group [NASDAQ: ATSG] registered double-digit growth in both adjusted earnings and revenues in the second quarter due to strong performances across its business segments.
The Wilmington, Ohio-based cargo airline operator and leasing company reported on August 5 adjusted earnings from continuing operations of $18.7 million, up 10 percent from the same period last year, with adjusted earnings per share of $0.27 cents, up $0.02.
ATSG generated $335.6 million in revenues during the quarter, a 64 percent jump from the second quarter of 2018. Revenues from Omni Air International, which the company acquired in November 2018, were the largest contributor to the year-over-year revenue gain, according to the company.
Capital spending in the first half of 2019 was $216.8 million, up 44 percent from last year, and included $159 million to buy seven 767 aircraft from Boeing [NYSE: BA] including three in the second quarter, as well as for costs to modify freighters.
ATSG President and CEO Joe Hete said the company’s strong operating performance was bolstered by flight operations for the U.S. Department of Defense and Amazon [NASDAQ: AMZN], which increased compared with prior-year periods. He pointed out that ATSG had agreed to lease an additional 10 freighters to Amazon, anticipating five deliveries in each of the next two years.
However, “at Amazon’s request, we now expect to deliver them six 767 freighters this year, and the remaining four in 2020,” Hete said in commenting on the quarter. “The first of those six was delivered in June, the second in early July, and the third is due later this month. At the same time, we have agreed to lease four 767 freighters to United Parcel Service [NYSE: UPS] this year, starting in September.”
The company announced on May 28 that its lenders, led by SunTrust Bank, agreed to add one year to the airline’s secured credit line and to increase its revolving line of credit to $645 million, a $100 million bump.
Through its leasing and airline subsidiaries (including ABX Air), ATSG, which provides aircraft leasing and air cargo transportation services to domestic and foreign air carriers, is the world’s largest owner and operator of converted Boeing 767 freighter aircraft.