Atlas Air Expects Each Boeing 747-8F To Add 4 Cents/Mo To EPS
February 14 2011 - 1:15PM
Dow Jones News
Cargo carrier Atlas Air Worldwide Holdings Inc. (AAWW) said
Monday it expects new Boeing 747-8F aircraft it has on order to
boost its earnings growth, but it also cautioned that it isn't
certain when it will start getting the new jets.
"We have not agreed on a definitive schedule" for deliveries of
the long-delayed aircraft from Boeing Co. (BA), Atlas Air Chief
Executive William Flynn said during a post-earnings conference
call.
Flynn said Atlas Air's 2011 guidance anticipates having three of
the aircraft in service for the entire fourth quarter, although he
described the forecast as merely "a projection."
When Atlas does start to receive the aircraft, however, Flynn
said each 747-8F will add 4 cents a share per month to Atlas Air's
diluted per-share earnings, or 48 cents a share per full year.
The figure includes the impact of a "maintenance holiday," in
which Atlas won't have to pay for major maintenance, during the
first five to six years of ownership.
Atlas, which provides outsourced air-cargo services to
commercial carriers and the U.S. military, has 12 747-8Fs on
order.
Prior to Boeing's delivery delays, Atlas was to receive six of
the aircraft in February 2010 and six this year. Design problems
and other issues pushed deliveries off schedule.
Flynn on Monday declined to discuss potential deliveries beyond
the three he has forecast for the fourth quarter.
"Boeing has proposed a revised delivery schedule" but Atlas
hasn't agreed to it yet, he said.
Early Monday, Atlas Air said fourth-quarter profit rose a
better-than-expected 47%, driven by surging demand in its main
leasing division.
The air-freight company also issued an upbeat earnings forecast
for the year, projecting a per-share profit above $5.30. Analysts
polled by Thomson Reuters expected earnings of $5.24 a share.
Cargo haulers of all types have benefited from increased freight
traffic in the wake of the economic downturn, and the company said
in August that global air-freight traffic had risen above
pre-recession levels, further boosting Atlas Air's top line.
Flynn noted Monday that the traditional cargo slowdown around
Lunar New Year was shorter than normal this year, signaling
continued strong demand. The slowdown can last up to two weeks, he
said.
Factories in China typically shut down for a week or more around
the holiday, which fell in early February this year. The break can
cause an anticipatory buildup in imports from Asia, as well as an
increase afterward as inventories are replenished.
Shares of Atlas Air were up 16.4%, or $9.28, at $65.73 in recent
trading. Earlier, they climbed to $66.88, a 52-week high.
Atlas Air posted fourth-quarter earnings of $41.6 million, or
$1.58 a share, up from $28.3 million, or $1.17 a share, a year
earlier. The prior-year quarter included 21 cents a share in
charges. Revenue climbed 12% to $359.7 million.
Analysts polled by Thomson Reuters forecast per-share earnings
of $1.34 on $340 million in revenue.
-By Bob Sechler, Dow Jones Newswires; 512-258-1690;
bob.sechler@dowjones.com
--Drew FitzGerald contributed to this article.
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