Willis Lease Finance (NASDAQ:WLFC) Issues Earnings Results, Misses Estimates By $0.60 EPS

Willis Lease Finance (NASDAQ:WLFC) issued its earnings results on Tuesday. The transportation company reported $0.47 EPS for the quarter, missing analysts’ consensus estimates of $1.07 by ($0.60), Zacks reports. Willis Lease Finance had a return on equity of 14.11% and a net margin of 11.80%. The firm had revenue of $243.74 million for the quarter, compared to analysts’ expectations of $170.43 million.

Here are the key takeaways from Willis Lease Finance’s conference call:

• Platform and portfolio growth accelerated: Assets under management rose 10% sequentially to approximately $4.9 billion, while the on-balance-sheet portfolio surpassed $3 billion after the WNG acquisition. Management expects balance-sheet growth to contribute more directly now that the initial seeding of its third-party funds is largely complete.
• Core leasing demand remains strong: Record lease-rent revenue increased 10.2% year over year to $84.4 million, and contribution margin reached a record $25 million, up 18%. Demand remained robust across both legacy and newer engine technologies despite fuel-price, interest-rate and geopolitical pressures.
• Reported profitability declined year over year: Third-quarter EBT fell to $18.8 million from $43.2 million, while utilization decreased to 83.2% from 86%. Maintenance-reserve revenue also dropped substantially because more newer-generation engines are on long-term leases, deferring revenue recognition even as related cash collections increase.
• Services expansion broadens future growth opportunities: WLFC is developing an engine repair center in Malaysia and a consolidated South Florida campus, while maintenance-services revenue more than tripled to $11.2 million. The company also has roughly $3 billion of capital available for deployment across its balance sheet, funds and joint ventures.
• Shareholder returns increased: The quarterly dividend was raised 12.8% to $0.15 per share, and the share-repurchase authorization was expanded to $200 million through 2031. Management said it has no immediate repurchase plans but will compare buybacks, debt repayment and new asset investments based on expected returns.

Willis Lease Finance Stock Performance

Shares of NASDAQ WLFC traded down $0.85 during midday trading on Tuesday, hitting $43.11. 83,991 shares of the company’s stock were exchanged, compared to its average volume of 260,303. The company has a debt-to-equity ratio of 3.27, a current ratio of 1.63 and a quick ratio of 1.31. The stock’s 50 day moving average price is $48.08 and its 200-day moving average price is $60.82. The firm has a market cap of $911.00 million, a P/E ratio of 10.70, a PEG ratio of 3.26 and a beta of 0.76. Willis Lease Finance has a twelve month low of $36.39 and a twelve month high of $81.54.

Willis Lease Finance Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, November 25th. Stockholders of record on Monday, November 16th will be issued a dividend of $0.15 per share. This represents a $0.60 dividend on an annualized basis and a dividend yield of 1.4%. This is a boost from Willis Lease Finance’s previous quarterly dividend of $0.1330. The ex-dividend date of this dividend is Monday, November 16th. Willis Lease Finance’s dividend payout ratio is presently 13.28%.

Insider Activity at Willis Lease Finance

In other Willis Lease Finance news, EVP Scott Flaherty sold 8,326 shares of Willis Lease Finance stock in a transaction on Tuesday, September 15th. The stock was sold at an average price of $53.56, for a total transaction of $445,940.56. Following the sale, the executive vice president owned 214,324 shares of the company’s stock, valued at $11,479,193.44. The trade was a 3.74% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, CEO Austin Willis sold 15,000 shares of the business’s stock in a transaction on Tuesday, September 1st. The stock was sold at an average price of $53.90, for a total value of $808,500.00. Following the transaction, the chief executive officer owned 420,888 shares of the company’s stock, valued at $22,685,863.20. This trade represents a 3.44% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold a total of 196,700 shares of company stock worth $10,937,108 in the last three months. 53.32% of the stock is owned by company insiders.

Analysts Set New Price Targets

A number of equities research analysts have recently weighed in on the company. Weiss Ratings cut Willis Lease Finance from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Tuesday, August 11th. Freedom Capital raised Willis Lease Finance from a “hold” rating to a “strong-buy” rating in a report on Wednesday, August 12th. Zacks Research raised shares of Willis Lease Finance to a “hold” rating in a research note on Wednesday, September 9th. Deutsche Bank Aktiengesellschaft set a $80.00 price target on shares of Willis Lease Finance and gave the stock a “buy” rating in a research report on Tuesday, September 8th. Finally, UBS Group set a $71.00 price target on shares of Willis Lease Finance in a research report on Wednesday, August 12th. One research analyst has rated the stock with a Strong Buy rating, one has assigned a Buy rating and two have given a Hold rating to the stock. According to MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average target price of $75.50.

Willis Lease Finance Company Profile

Willis Lease Finance Corporation is a commercial aircraft engine lessor and aviation services company headquartered in Coconut Creek, Florida. Founded in 1985, the company provides engines and related aviation assets to airlines, aircraft lessors, maintenance providers and other customers worldwide.

Its principal business is leasing spare and in-service commercial aircraft engines, including engines used for narrow-body and wide-body aircraft. Willis Lease Finance also provides engine portfolio management, maintenance and asset management services, and sells or leases aircraft engine parts and related equipment.