Atlas Air Worldwide Holdings Inc. (AAWW) Wednesday reported a lower fourth-quarter profit compared to the prior year. The result was hurt mainly by higher expenses and a weak performance at commercial charter business, that was affected largely by rising fuel costs and lower volumes.
Meanwhile, both earnings and revenues for the quarter fell short of analysts' expectations. On the news, shares of Atlas Air lost over ten percent on the Nasdaq.
Chief Executive William Flynn said, "We performed well by historical standards, but global economic conditions, delivery delays for our new 747-8 freighters, delays in the ramp-up of CMI service for Boeing, and the impact of pre-operating costs for new initiatives all contributed to lower-than-anticipated earnings."
Atlas Air's profit for the quarter dropped to $33.51 million or $1.27 a share from $41.56 million or $1.58 a share last year. Excluding special items, earnings was $1.50 a share. On average, 12 analysts polled by Thomson Reuters estimated earnings of $1.89 a share. Such estimates exclude unusual gains and losses.
Revenue grew 8 percent to $388.16 million, but fell shy of analysts' estimate of $410.78 million. The slower revenue growth was largely due to the reduction in Commercial Charter business volumes and revenue per block hour.
Revenues at ACMI - the biggest revenue contributor - rose 2 percent, while AMC charter revenues increased 48 percent. Commercial charter revenues slipped 15 percent.
Total expenses for the quarter rose 12 percent, reflecting increases in aircraft fuel, labor expense, travel, aircraft rent and other operating expenses.
Aircraft fuel expenses for the quarter increased 42 percent from last year. Higher fuel expense reflects a 48 percent increase in the AMC charter pegged fuel price and a 29 percent increase in commercial charter fuel prices.
Moving ahead, the company expects "significant increase in earnings for 2012." Atlas Air expects earnings to be more than $5.10 per share, representing a growth of about 24 percent from 2011 adjusted earnings.
AAWW is currently trading at $45.15, down $5.31 or 10.52, on a volume of 1.5 million shares, above the three-month average volume of 0.3 million.
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