Air T Stock Rises Post Q2 Earnings on Higher Revenue, Operating Income

Core Insights - Air T, Inc. (AIRT) shares have increased by 23.1% since the earnings report for the quarter ended September 30, 2024, outperforming the S&P 500 index, which saw a decline of 0.3% during the same period [1] - The company reported a revenue of $81.2 million for the second quarter of fiscal 2025, reflecting a year-over-year increase of 2.9% from $78.9 million [2] - Operating income surged to $3.9 million, a significant increase of 412.4% compared to the previous year's quarter, driven by strong performance in commercial jet engines and parts [2] Financial Performance - Net income attributable to shareholders reached $2.5 million in the second quarter of fiscal 2025, a turnaround from a net loss of $1.6 million in the same quarter last year [3] - Earnings per share for the quarter were $0.91, compared to a loss of $0.57 per share in the previous year [3] Segment Performance - The Overnight Air Cargo segment, supporting FedEx operations, saw a revenue increase of 10.6% to $31.2 million, attributed to an expanded fleet of 105 aircraft [4] - Ground Equipment Sales (GGS) revenue rose by 18% year-over-year to $14.5 million, driven by increased sales of de-icing trucks, with an adjusted EBITDA of $0.5 million [5] - The Commercial Jet Engines and Parts segment reported a revenue decline of 9.7% to $32.9 million, but adjusted EBITDA improved by 209.3% to $4.1 million due to higher profit margins on component sales [6] Management Insights - CEO Nick Swenson highlighted the quarterly gains as a result of a rebound in aviation parts trading and effective navigation of post-COVID challenges [7] - The company is well-positioned in the GGS segment despite setbacks in demand for de-icing equipment due to warmer weather [7] Strategic Positioning - Air T did not provide explicit forward guidance but emphasized strengthening its aircraft asset management business through Crestone Asset Management (CAM), which saw assets under management grow to $410.4 million [8] - The company entered a new credit agreement with Alerus Financial, enhancing financial flexibility with a $14 million revolving credit line and secured term loans [9] - AAM 24-1, LLC, a subsidiary of Air T, added $15 million to its existing note with Honeywell, securing a total of $30 million at an 8.5% interest rate [9]