Air Lease Corporation reports second quarter 2018 results

Eleanor Steed
By Eleanor Steed August 10, 2018 17:00

Air Lease Corporation reports second quarter 2018 results

Air Lease Corporation (ALC) has reported revenues of $398 million for the three months ended June 30, 2018, an increase of 4.4%; and $779 million revenue for the six months ended June 30, 2018, an increase of 5.1%.

The lessor reported diluted earnings per share of $1.04 for the three months ended June 30, 2018, an increase of 13.0%; and $2.04 for the six months ended June 30, 2018, an increase of 20.7%. On an adjusted basis, diluted earnings per share before income taxes were $1.44 for the three months ended June 30, 2018, a decrease of 4.6%; and $2.82 for the six months ended June 30, 2018, a decrease of 0.7%.

ALC’s pre-tax margin of 37.1% for the three months ended June 30, 2018 and 40.3% on an adjusted basis.

The lessor’s pre-tax return on equity of 15.4% for the trailing twelve months ended June 30, 2018, and 16.7% on an adjusted basis.

During the reporting period, ALC took delivery of 14 aircraft from its order book and four young incremental aircraft from the secondary market, representing $1.4 billion in capital expenditures, ending the quarter with $14.9 billion in aircraft with a weighted average age of 3.8 years and a weighted average lease term remaining of 6.8 years.

ALC reports that all of its aircraft on order are 100% placed through 2019, 87% placed through 2020 and 66% placed through 2021 on long term leases.

In August 2018, ALC signed an agreement to purchase up to 78 Boeing airplanes, including 75 737-8 MAX aircraft and three 787-9 aircraft at the 2018 Farnborough International Airshow.

Also in August 2018, ALC entered into an agreement to sell and continue to manage a fleet of 18 aircraft to Thunderbolt Aircraft Lease Limited II (“Thunderbolt II”). The lessor says that it expects a majority of the aircraft sales to be completed by the end of Q4 2018.

ALC ended the quarter with $25.0 billion in committed minimum future rental payments consisting of $11.3 billion in contracted minimum rental payments on the aircraft in our existing fleet and $13.7 billion in minimum future rental payments related to aircraft delivering in the future.

The lessor also completed a senior unsecured notes offering in June 2018, issuing $500 million at 3.875%, maturing in 2023.

ALC has declared a quarterly cash dividend of $0.10 per share on our outstanding common stock for the second quarter of 2018. The dividend will be paid on October 5, 2018 to holders of record of our common stock as of September 14, 2018.

“We enjoyed another great quarter with revenues and earnings right on track, and we continue to execute our plan to increase capital deployment by adding young aircraft incremental to our orderbook deliveries. And, with our orderbook 87% placed through 2020 and 66% placed through 2021, we finalized a major order with Boeing for 75 MAX8 plus three B787-9 aircraft. We also launched Thunderbolt II, a uniquely structured and highly successful portfolio sale of 18 aircraft, which priced and closed subsequent to quarter end,” said John L. Plueger, Chief Executive Officer and President.

“With now over $17 billion in total assets, ALC remains committed to its strategy of investing in the youngest, most fuel efficient, and technologically advanced commercial aircraft. We are seeing solid lease demand driven by passenger traffic growth globally and the continued need to replace aging aircraft. The order we placed at the Farnborough Air Show provides us with access to valuable delivery positions through 2024, allowing us to deliver continued growth for our shareholders,” said Steven F. Udvar-Házy, Executive Chairman of the Board.

Eleanor Steed
By Eleanor Steed August 10, 2018 17:00