(FOOL
CONFERENCE CALL SYNOPSIS)*
By Greg Markus (MF
Boring)
ATLAS AIR INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: ATLS)") else Response.Write("(NASDAQ: ATLS)") end if %>
538 Commons Dr
Golden, CO 80401
(303) 526-5050
ALEXANDRIA, Va., July 25, 1996/FOOLWIRE/ --- Atlas Air, a U.S.-based
international air
cargo carrier, reported 2Q:96 earnings this morning.
For the quarter, the company made $0.47 per share on revenues of $72.6 million.
EPS was in line
with the consensus of analysts' projections -- which means that some folks
were pleased and
others were presumably less pleased.
Compared with the year-ago quarter, revenues were up 89% and EPS up 81%
(reflecting an
increased number of outstanding shares). Compared with 1Q:96, revenues increased
24% and
EPS was 47% higher. Gross margin stands at 31.3% and net margin at 13.8%;
the latter figure
compares favorably with 1Q:96's 10.6% and last year's 2Q:95's 10.2%.
Unit operating costs declined approximately 5% on a year-over-year basis,
primarily because the
company is able to make more efficient use of its fleet as its customer base
grows and routes
become less fragmented. The company experienced some higher than anticipated
costs associated
with readying for service a plane acquired from FedEx. (The FedEx plane uses
different engines
from those on the rest of Atlas Air's fleet.)
The company had 14 aircraft in operation throughout the quarter and will
be adding five by the
end of the year, with two of those five being added in the current quarter.
By the end of 1997, the
plan is to have 22 to 24 planes in service, depending upon availability.
In this morning's press release, the company announced a new customer, Fast
Air, which is South
America's only all-cargo airline and is associated with LAN Chile. Fast Air
joins Thai Airways
and Cargolux as the newest Atlas Air customers. In the follow-up teleconference,
the company
mentioned that it is currently negotiating with British Air, as well.
Beyond adding new customers, Atlas Air continues to expand business with
existing customers.
According to the company, they are seeing "very, very strong demand" from
current customers.
The company did not provide balance sheet and cash flow information this
morning but expects to
have that available tomorrow. They did say in the teleconference that they
ended the quarter with
$150 million in cash and that shareholder equity had increased to $190 million
and debt/equity
ratio had decreased as a result of a recent secondary offering.
The company declined to provide guidance on revenues or earnings for the
balance of the year
but did say that total block hours (i.e., the airline time booked by customers)
will be higher in July
than it was in June. Company revenues were $5,160 per block hour for 2Q:96
(with 14,073 total
block hours for the quarter), as compared with $5,076 per block hour (and
7,568 total block
hours) for the year-ago quarter. Sequentially, the number of block hours
increased (from 1Q:96's
11,125), but revenue per block hour declined somewhat (from $5,272) due to
normal seasonal
changes in the mix of business.
Looking forward, the company commented that current availability of additional
747-200s for
purchase is "spotty," but that Atlas Air is now the world's largest cargo
carrier using these planes
and so they know the market thoroughly. Competitors are trying to enter the
market, but they are
at a disadvantage to Atlas Air because the company's 747-200 fleet is "clearly
the best" for
long-haul cargo shipping, on the basis of payload, range, and overall operating
costs.
At least four large institutionally-based analysts participated in the call,
as well as representatives
of some smaller firms.
* A Fool conference call synopsis represents an effort to highlight
the salient points of a
conference call and should not be taken as an authoritative accounting or
transcription of
the entire event.
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Atlas Air
2Q