WILMINGTON, Ohio - Air Transport Services (NASDAQ:ATSG) Group, Inc. (NASDAQ:ATSG), a leading provider of medium wide-body freighter aircraft leasing and related services, reported a lower-than-expected performance for the fourth quarter ended December 31, 2023.
The company's adjusted earnings per share (EPS) of $0.18 fell short of analysts' estimates by $0.10, and revenues declined 3% to $517.04 million, missing the consensus forecast of $534.14 million.
The company's fourth-quarter results were impacted by reduced demand in its leasing segment and a decrease in flying for the U.S. military, contributing to a year-over-year decline in adjusted pretax earnings by 69% to $19.8 million and a 20% drop in adjusted EBITDA to $129.9 million.
For the full year 2023, ATSG reported a modest revenue increase of 1% to $2.1 billion, while adjusted EPS decreased by 36% to $1.46, and adjusted EBITDA was down 12% to $562 million.
Joe Hete, chairman and chief executive officer of ATSG, commented on the challenges faced in the second half of 2023 and the company's strategic response, including the conversion and leasing of thirteen aircraft and substantial reductions in capital spending plans for the upcoming year.
Looking ahead to 2024, ATSG provided guidance for adjusted EBITDA of approximately $506 million, which is a decrease of $56 million from the previous year.
The company also anticipates capital spending to be $410 million, a significant reduction from 2023's figure. These projections do not account for potential contributions from additional aircraft leases or flying opportunities that are not currently under contractual commitment.
In response to the earnings and revenue miss, coupled with the weak guidance for 2024, ATSG's shares fell 4% in market response. This decline reflects investors' concerns over the company's near-term growth prospects and profitability.
ATSG's financial statements on Form 10-K are expected to be filed by February 29, 2024, and will be made available on the company's website.
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