Air Lease (AL) Q2 Earnings Miss Estimates, Revenues Down Y/Y

Core Viewpoint - Air Lease Corporation (AL) reported disappointing second-quarter 2024 earnings, missing consensus estimates for both earnings per share and total revenues, indicating challenges in the rental and sales segments of its business [1][2]. Financial Performance - AL's second-quarter earnings per share were $1.23, below the Zacks Consensus Estimate of $1.56 [1]. - Total revenues for the quarter were $667.3 million, missing the consensus estimate of $687.9 million and reflecting a 0.8% decline year over year [1]. - Revenues from the rental of flight equipment decreased by 0.4% year over year to $609.5 million, attributed to the sale of older aircraft with higher lease yields and the acquisition of new aircraft with lower initial lease yields [2]. - Lease revenues fell by nearly $13 million compared to the prior period due to fewer aircraft returns during the quarter [2]. - Revenues from aircraft sales and trading activities dropped 5.5% year over year to $57.78 million, with gains from aircraft sales decreasing from $45 million in Q2 2023 to $40 million in the reported quarter [2]. Operating Metrics - Operating expenses increased by 6% to $539.5 million [3]. - As of June 30, 2024, AL owned 474 aircraft with a net book value of $26.8 billion, and the total fleet size was 848, which includes 67 managed aircraft and 307 on order [3]. - Cash and cash equivalents at the end of the second quarter were $454.12 million, down from $554.4 million at the end of the previous quarter [3]. - Debt financing, net of discount and issuance costs, rose to $19.67 billion from $19.48 billion in the prior quarter [3]. Industry Context - Delta Air Lines reported second-quarter earnings of $2.36 per share, slightly missing estimates, with revenues of $16.65 billion exceeding expectations and increasing 6.9% year over year [4]. - J.B. Hunt Transport Services, Inc. reported earnings of $1.32 per share, missing estimates and reflecting a 27% year-over-year decline, with total operating revenues of $2.93 billion also falling short of expectations [5]. - United Airlines Holdings, Inc. reported earnings per share of $4.14, surpassing estimates, but total operating revenues of $14.98 billion missed expectations despite a year-over-year increase of 5.7% [6].