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Atlas Air Worldwide Holdings, Inc. Reports Sharply Improved Second-Quarter Earnings
2Q09 Net Income Increases to $11.3 Million, $0.54 per Share; Pretax Income Rises to $17.8 Million
Continued Strong Operating Results Reflect Business Transformation; Company Reiterates Outlook for Solid Earnings Growth in 2009 Despite Smaller Fleet and Challenging Environment
Source: Atlas Air Worldwide Holdings, Inc.
On Wednesday August 5, 2009, 7:36 am EDT
PURCHASE, N.Y.--(BUSINESS WIRE)--Atlas Air Worldwide Holdings, Inc. (AAWW) (Nasdaq: AAWW - News), a leading provider of global air cargo assets and services, today announced sharply improved results for the second quarter of 2009, building on the Company’s record first-quarter earnings.
For the three months ended June 30, 2009, AAWW reported net income of $11.3 million, or $0.54 per diluted share, on pretax earnings of $17.8 million and revenues of $240.0 million. Strong operating and financial results for the quarter compared with net income of $1.5 million, or $0.07 per share, on pretax earnings of $6.4 million and revenues of $438.8 million for the three months ended June 30, 2008.
For the six months ended June 30, 2009, AAWW posted net income of $34.7 million, or $1.66 per diluted share, on pretax earnings of $56.3 million and revenues of $484.5 million. Results for the period contrasted with a six-month net loss of $3.8 million, or $0.18 per diluted share, on a pretax loss of $3.4 million and revenues of $811.8 million.
“Our strong second-quarter results, like our record first-quarter performance, reflect the actions we have taken to transform our business, improve efficiency and minimize our commercial risk,” said William J. Flynn, President and Chief Executive Officer of AAWW.
“Our focus on productivity gains and cost savings through Continuous Improvement, our proactive efforts to retire older 747-200 assets, and our transformation of the Polar scheduled service business have enabled us to produce higher earnings despite a difficult demand environment.”
The substantial increase in second quarter earnings was achieved despite a smaller fleet, an increase in heavy-maintenance expense on 747-400F aircraft, and a reduction in the AMC Charter “pegged” fuel price. Similar to the first quarter of 2009, AMC flying was significantly higher than the flying levels experienced in the fourth quarter of 2008.
Second-quarter 2009 results reflect both the deconsolidation of Polar Air Cargo Worldwide, Inc. from AAWW, for financial reporting purposes, in October 2008 and the consolidation of Global Supply Systems Limited (GSS), a private company in which AAWW holds a 49% interest, for financial reporting purposes, in April 2009. Results for the second quarter of 2009 included a pretax gain of $0.1 million on the consolidation of GSS, while results for the second quarter of 2008 included a pretax gain of $2.7 million on the disposal of aircraft.
Revenues and pretax earnings for the first six months of 2009 included the benefit of a $10.0 million fee for the effective early termination of a contract. In addition, pretax earnings for the period included gains of $2.7 million on the early extinguishment of debt purchased at a discount, $1.0 million on the sale of an aircraft and retired engines, and $0.1 million on the consolidation of GSS. Results for the first six months of 2008 included a gain of $2.7 million on the disposal of aircraft.
Mr. Flynn concluded: “While global airfreight traffic in the past few months is showing some signs of incremental improvement, there is still an imbalance between traffic and capacity that has put pressure on airfreight yields. It appears that business inventories have been reduced, but they also appear to remain relatively high in comparison to final sales, and the timing of the eventual recovery in business and end-user consumption is still uncertain.
“We are somewhat encouraged, however, by the rate of reduction of wide-body freight capacity that we see in the Asia-Pacific region. As the decline in airfreight demand has moderated in recent months, the rate of capacity reduction in this key airfreight market has begun to approach the rate of reduction in demand. Given continuing reductions in capacity, any improvement in demand could have an early and meaningful impact on AAWW.
“We continue to expect solid full-year earnings growth in 2009. We have improved our earnings visibility and our risk profile, and we are generating strong performance deep into a difficult cycle. We have improved the efficiency of our fleet, and our best-in-class 747-400 freighters position us to serve a high-credit-quality customer base under long-term contracts. We also continue to maintain a strong balance sheet with a high level of liquidity.”
"Cash and Cash Equivalents
At June 30, 2009, AAWW’s cash, cash equivalents and short-term investments totaled $468.2 million, an increase of $57.6 million, or 14.0%, compared with $410.5 million at December 31, 2008."