Air Transport Services Group, Inc. (ATSG) reported solid fourth-quarter 2024 results wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Quarterly earnings per share (EPS) of 40 cents beat the Zacks Consensus Estimate of 35 cents and improved more than 100% year over year. 

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Customer revenues (derived after eliminating internal revenues from total revenues) of $516.8 million beat the Zacks Consensus Estimate of $512.8 million. The top line declined marginally by 0.1% year over year.

As previously announced on Nov. 3, 2024, ATSG has inked a deal with Stonepeak, a firm specializing in infrastructure and real assets, wherein ATSG will be purchased by the latter in an all-cash transaction with an enterprise value of $3.1 billion. The deal is anticipated to be completed by the first half of 2025. On Feb. 10, 2025, ATSG received shareholders' approval for the deal closure. ATSG is now working to obtain approval from the U.S. Department of Transportation. ATSG is constantly working toward completing all conditions to deal closure.

Mike Berger, chief executive officer of ATSG, stated, "I’m proud of the entire ATSG team for their focus and dedication as we delivered strong fourth quarter results, as well as safe and reliable service. We saw continued momentum in our CAM leasing business, placing our ninth converted 767-300 freighter this year with an external customer in November.

"In ACMI Services, we saw improved profitability in the quarter, operating all ten of the additional aircraft recently provided by Amazon with sequential quarter improvements in both passenger and freighter hours flown. We once again generated significant free cash flow, with a total of $228 million for the year. We remain excited about our future with Stonepeak, and we are on track for closing in the first half of this year. We are enthusiastic about the opportunities we see ahead of us in 2025, including the delivery of our first four converted A330 freighters."

ATSG Performance by Business Segment

ATSG primarily operates through the following reporting segments, namely Cargo Aircraft Management or CAM and ACMI (aircraft, crew, maintenance & insurance) Services. Revenues from CAM other operations fell 12.7% year over year to $111.56 million. Revenues from ACMI Services and other operations decreased 11.3% and 18.9% year over year to $372.06 million and $90.98 million, respectively.

At the end of 2024, Air Transport’s total fleet in service included 148 aircraft (20 passengers and 128 freighters).  

Total operating expenses decreased 1.1% year over year to $474.99 million. Adjusted EBITDA grew 24.9% year over year to $162.23 million.

ATSG ended the fourth quarter with cash, cash equivalents and restricted cash of $60.57 million compared with $44.87 million at the end of the prior quarter. As of Dec. 30, 2024, the company had a long-term debt of $1.54 billion compared with $1.56 billion at the end of the prior quarter.

ATSG generated $133.73 million of cash from operating activities. Adjusted free cash flow was $96.76 million.

ATSG’s Zacks Rank & Stock Price Performance

Currently, ATSG carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Over the past six months, shares of ATSG have gained 40.7%, outperforming the industry’s loss of 7.8%.

6-Month ATSG Stock Price Comparison

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Q4 Performances of Other Transportation Companies

Delta Air Lines

Delta Air Lines DAL reported fourth-quarter 2024 earnings (excluding 56 cents from non-recurring items) of $1.85 per share, which surpassed the Zacks Consensus Estimate of $1.76. Earnings increased 44.5% on a year-over-year basis due to low fuel costs.

DAL’s revenues of $15.56 billion surpassed the Zacks Consensus Estimate of $14.99 billion and increased 9.4% on a year-over-year basis, driven by strong holiday travel demand. Adjusted operating revenues (excluding third-party refinery sales) totaled $14.44 billion, up 5.7% year over year. Passenger revenues, which accounted for 82.4% of total revenues, increased 5% year over year at $12.82 billion.

J.B. Hunt Transport Services

J.B. Hunt Transport Services JBHT reported fourth-quarter 2024 earnings per share of $1.53, which fell short of the Zacks Consensus Estimate of $1.62. However, the bottom line increased 4.1% on a year-over-year basis.  

JBHT’s total operating revenues of $3.15 billion narrowly beat the Zacks Consensus Estimate of $3.13 billion but declined 4.8% year over year. The decline was mainly due to lower fuel surcharge revenues and yield pressure in its Intermodal segment.

JBHT’s fourth-quarter 2024 operating revenues of $2.78 billion, excluding fuel surcharge revenue, decreased 2% from the year-ago reported quarter. Total operating income for the reported quarter increased 2% year over year to $207 million.

Alaska Air Group

Alaska Air Group, Inc. ALK reported solid fourth-quarter 2024results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Quarterly earnings per share of 97 cents outpaced the Zacks Consensus Estimate of 47 cents and improved more than 100% on a year-over-year basis. The reported figure exceeded the guided range of 40-50 cents.

ALK’s bottom line benefitted from solid revenue growth, cost and operational performance throughout the quarter and holiday travel periods. ALK also benefitted from a renegotiation of certain interest payments and favorability in its fourth-quarter tax rate.

ALK’s operating revenues of $3.53 billion beat the Zacks Consensus Estimate of $3.51 billion. The top line jumped 38.4% year over year, with passenger revenues accounting for 89.9% of the top line and increasing 37% owing to continued recovery in air-travel demand.

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