Atlas Air Worldwide reports $7.5 million loss in Q3 2016
Nov 03, 2016: Atlas Air Worldwide Holdings today announced a loss from continuing operations, net of taxes, of $7.5 million, or $0.30 per diluted share, for the three months ended September 30, 2016. Results for the period were primarily due to the impact of non-deductible expenses triggered by shareholder approval of warrants granted to Amazon in connection withtheir long-term agreements to dry lease and operate 767-300 aircraft. Results compared with a loss from continuing operations, net of taxes, of $12.8 million, or $0.51 per diluted share, for the three months ended September 30, 2015.
On an adjusted basis, income from continuing operations, net of taxes, in the third quarter of 2016 totaled $27.4 million, or $1.09 per diluted share. That compared with $30.7 million, or$1.23 per diluted share, in the year-ago quarter, which included income tax benefits primarily from the favorable resolution of an IRS exam.
“During the third quarter, we continued to focus on increasing our alignment with the faster growing express and e-commerce markets,” said William J Flynn, President and Chief Executive Officer.
“We placed our first aircraft into service for Amazon in August, and we moved forward with preparations to ramp up to 20 by the end of 2018. We also made significant progress toward integrating Southern Air and the two new operating platforms that it adds. Thus far, the contributions and synergies from Southern Air and its express-focused 777 and 737 CMI services have exceeded our expectations.
“Reflecting our expanding business base and the ongoing development of our strategic platform, our third-quarter results were at the upper end of the range that we expected. In ACMI, we started flying for Amazon and benefited from accretion generated by Southern Air. In charter, our results reflected an increase in military cargo and passenger demand. And our Dry Leasing business maintained its steady, annuity-like performance. Despite publicity about the Hanjin Shipping bankruptcy during the quarter, we did not observe any noticeable impact on airfreight demand or rates.”
Flynn added, “We are looking forward to a strong fourth quarter, led by our superior fleet, the strength of our brand and our global market leadership in outsourced aircraft and services.
“We expect peak-season demand to be solid and accompanied by a seasonal improvement in commercial airfreight yields. Together with our additional seasonal flying for express operators and a lower level of maintenance expense, we expect both a sequential and a year-over-year improvement in our block-hour volumes, revenue, profitability and margins in the fourth quarter, which we anticipate will account for slightly more than 50% of our 2016 adjusted diluted EPS.”
Flynn concluded, “We continue to believe strongly in the future of airfreight, express and ecommerce, and we are shaping Atlas to make the most of that future – through the quality and scale of our fleet, through the efficiency of our operations, and through the strength of our business relationships.
“As we announced recently, we have entered into a five-year agreement with FedEx Express toprovide it with five 747-400 freighter aircraft for peak-season flying beginning in 2017 and lasting through 2021. We have worked closely and successfully with FedEx for many years, with an agreement to provide five aircraft for 2016 peak-season flying already in place. This new agreement will enable both of our companies to better plan for the longer term.”