Air Lease Corporation's first quarter adjusted net income before income taxes fell 12.3% year-on-year (YoY) to $146.3 million as its operating expenses jumped 10.5% to $528 million and revenues were up only 4.3% to $663.3 million. Its diluted earnings per share were 87 cents, down from $1.06 last year. The rise in expenses was primarily driven by its interest expense rising by approximately $30 million year-over-year, the company said in a press release.
The decline comes amid the continued supply chain issues impacting the delivery of new commercial aircraft. ""Supply chain constraints on new commercial aircraft are clearly not going away anytime soon,"" said Air Lease CEO and president John Plueger. He added: ""Aircraft manufacturing supply chain challenges are not easily resolvable and will take a number of years to finally overcome, and our view here remains firmly intact"".
Additionally, with the delivery delays, ""airline customers are eager to retain our aircraft for their operations,"" said Plueger. With this, he said the company believes its ""lease rates on extensions will remain strong.""
In a joint statement, Plueger and Air Lease executive chairman of the board Steven Udvar-Hazy said: ""With aircraft in short supply and values rising, we benefit from continued fleet expansion and sales activity in an industry backdrop that remains positive. We see this environment continuing for the near to medium term future.""
The company ended the first quarter with a total liquidity of $6.5bn, as well as an unencumbered asset base of $29bn. Its debt-to-equity ratio at the end of the first quarter was 2.7x.
The company declared a $0.21 quarterly dividend per share on its outstanding class A common stock. The next quarterly dividend of $0.21 per share will be paid on July 8, 2024, to holders of record of its class A stock as of June 4, 2024.
For the second quarter, the company expects to take delivery of approximately $1.5bn of aircraft. Pleuger added: ""Based on current indications, we would expect around $500 million in aircraft sales to close in the second quarter of 2024."" He said Air Lease continues to expect its full year deliveries to be between $4.5-5.5bn. In addition, for 2024, it has $1.4bn of aircraft in its sales pipeline for 2024, which includes $666 million in flight equipment held for sales and $698 million from letter of intent agreements for aircraft.