Atlas Air Expects Each Boeing 747-8F To Add 4 Cents/Mo To EPS

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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