Air Transport Services Group (ATSG) reported Q3 EPS of $0.60, $0.07 better than the analyst estimate of $0.53. Revenue for the quarter came in at $517 million versus the consensus estimate of $510.34 million.
2022 Outlook:
ATSG expects its Adjusted EBITDA for 2022 to meet or exceed $640 million, up nearly $100 million from 2021. The 2022 Adjusted EBITDA forecast assumes for the fourth quarter:
Delivery of the last three of eight dry leases of 767-300 newly converted freighters CAM will complete this year.
Addition of the last three of seven customer-provided 767 freighters that our airlines will operate under CMI arrangements.
Achieving projected levels of peak-season flying.
ATSG expects its capital spending for 2022 will be $625 million, including $195 million in sustaining capex and $430 million for growth. Growth capex will be funded primarily by the strong Adjusted Free Cash Flow ATSG is generating this year.
“We are on schedule to meet our targets, as demand for our express-package network assets and flight operations remains strong. We are ready to operate under expanded peak holiday-season flight schedules for our CMI customers, supporting fulfillment of higher e-commerce shopping spurred by special early-season promotions. We anticipate growth in ATSG’s cash flow through the current economic cycle and beyond," he said.
Corrado noted that ATSG expects to lease more than 20 freighters in 2023, including fourteen 767-300s and at least six A321-200s. By year-end 2022, CAM will own or hold rights to acquire all of the 767s and A321s it requires for lease deliveries in 2023. Those orders are backed by customer deposits or are from existing lease customers.
In 2024, CAM expects a similar pace of 767 and A321 lease deliveries, plus the first of twenty-nine Airbus A330-300 freighters it will purchase, convert and lease.
“We expect the Boeing 767-300 and the Airbus A330-300 to be the aircraft of choice for regional express air cargo networks for years to come,” Corrado said. “CAM has secured a sizeable portion of the conversion capacity for both aircraft types emerging from current sources through the middle of this decade. Customers have already placed orders for more than 20 of the 29 A330 freighters we expect to lease through 2027. All of those customers are based outside of North America, which will further diversify our revenue streams and expand our presence abroad.”