Air Lease Tops Q3 Earnings On Growth In Fleet & Sales Activity, Boosts Dividend By 5%

Air Lease Corp AL reported Q3 FY23 revenue of 17.5% Y/Y to $659.4 million, beating the consensus of $657.7 million. 

Revenue was driven by the continued growth in the fleet and increased sales activity. 

The company witnessed increased aircraft sales, trading, and other revenue led by the sale of eight aircraft and one sales-type lease transaction, which generated about $43.9 million in gains.

The company took delivery of eight aircraft from its order book in Q3, representing aircraft investments worth around $450 million, ending the period with around $30 billion in total assets. 

AL divested eight aircraft for about $350 million in sales proceeds in the quarter.

As of September 30, 2023, the net book value of the fleet increased to $25.6 billion (vs. $24.5 billion as of December 31, 2022), and owned 448 aircraft in the aircraft portfolio, comprising 331 narrowbody aircraft and 117 widebody aircraft, and managed 79 aircraft. 

As of November 6, 2023, the company had 40 aircraft with a carrying value of about $1.8 billion in the sales pipeline, which includes the 13 aircraft with a carrying value of around $670 million classified as flight equipment held for sale as of September 30, 2023, and 27 aircraft with a carrying value of $1.1 billion subject to letters of intent.

Adjusted EPS of $1.59 (+20.5% Y/Y), beating the consensus of $1.03.

"ALC's healthy third quarter performance reflects continued strength in the underlying fundamentals of our business. Aircraft demand remains very strong, while supply chain and other OEM challenges will continue to constrain the supply of commercial aircraft. We are also pleased by the attractive valuations that we are seeing in the aircraft sales market and are optimistic about the prospects for our own sizable aircraft sales pipeline," said John L. Plueger, CEO and President, and Steven F. Udvar-Házy, Executive Chairman of the Board.

As of September 30, cash and cash equivalents stood at $515.7 million.

Dividend: The board of directors increased the quarterly cash dividend per share by 5% to $0.21, payable on January 10, 2024, to shareholders of record as of December 15, 2023.

Also Read: Air Lease Pens $300M Deal For Five 737 Aircraft With Royal Air Maroc

Price Action: AL shares are trading higher by 2.25% at $37.66 on the last check Monday.