ATW Daily News

Atlas continues to boost profitability

Tuesday October 27, 2009

Atlas Air Worldwide Holdings reported third-quarter net income of $14.7 million, a nearly threefold increase over $5.2 million earned in the year-ago period and its third quarter of strong earnings growth this year.

President and CEO William Flynn credited its 2009 earnings growth despite a weak air cargo market to its decision to retire 14 less efficient 747-200 freighters in 2007 and 2008 and turning former scheduled services subsidiary Polar Air Cargo into a DHL Express carrier in October 2008. Looking forward, he cited "ongoing improvement in both supply and demand in global airfreight since earlier this year. . .We expect to see improving trends continuing through the fourth quarter and expect our fourth-quarter net earnings to exceed $18 million on that basis."

He added that talks with Boeing continue regarding a revised delivery schedule for the 12 747-8 freighters AAWH has on order. It originally was supposed to receive six of the type in both 2010 and 2011. He said the company and Boeing have agreed to reschedule three deliveries to 2012 and 2013 but there is no agreement yet on the other nine.

With its fleet downsized (currently 28 aircraft) and the DHL deal in full effect, it generates less revenue compared to last year but its costs are much lower. Third-quarter revenue fell 44.5% to $255.5 million while expenses lowered 48.5% to $226.9 million, producing operating income of $28.6 million, up 41.6% from $20.2 million last year.

Separately, the 747 freighter specialist also announced that it plans to offer 5.25 million shares of common stock in an underwritten public offering and that it has extended for an undisclosed period its ACMI contract with freight forwarder Panalpina, for which it has provided airlift for 15 years.

by Aaron Karp

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