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Willis Lease Finance Corporation (WLFC - Free Report) reported earnings per share (EPS) of $6.21 in the second quarter of 2024, a significant increase from $2.02 in the prior-year quarter.
The company's total revenues reached $151.1 million, up 38.6% from $109 million in the same period last year.
In the quarter under review, WLFC experienced significant tailwinds, including record revenues driven by strong lease rent and maintenance reserve revenues, bolstered by heightened asset usage and strategic acquisitions of aircraft and engines. However, the company faced headwinds from rising general and administrative expenses, increased interest expenses due to higher debt levels, and the ongoing challenge of managing the costs associated with spare parts and equipment sales.
Despite these challenges, the company's strategic investments in leasing and maintenance services supported robust financial performance.
Willis Lease Finance Corporation Price, Consensus and EPS Surprise
Lease rent revenues were a record $55.9 million, up 2.7% from $54.4 million in the second quarter of 2023. This growth was driven by the acquisition of new assets, including three aircraft and 11 engines, enhancing the lease portfolio.
Maintenance reserve revenues increased significantly to $62.9 million, up 77.6% from $35.4 million in the second quarter of 2023. This spike was fueled by heightened asset usage by customers, generating substantial short-term maintenance revenues of $45.9 million and long-term maintenance revenues of $17 million.
Spare parts and equipment sales rose to $6.2 million from $4.6 million in the previous year, reflecting variations in sales timing and increased demand for spare parts.
The company recorded a gain of $14.4 million from the sale of seven engines and other leased equipment, a 223.4% increase compared to $4.5 million in the second quarter of 2023.
Income from operations surged to $54.1 million, up from $19.4 million in the year-ago quarter, reflecting improved operational efficiency and asset utilization. Pre-tax income reached a quarterly record of $57.9 million, up 205.3% from $19 million in the prior-year quarter. Net income increased to $42.6 million from $13.8 million in the second quarter of 2023.
Total expenses escalated to $97 million from $89.6 million. Depreciation and amortization slightly decreased to $22.2 million from $22.5 million in the year-ago quarter. The cost of spare parts and equipment sales rose to $5.4 million, up 77.8% year over year. The cost of maintenance services increased to $5.7 million from $4.8 million. General and administrative expenses grew by 9.3% to $34.7 million. Interest expense increased to $24.6 million, up 28.7% due to higher debt levels associated with asset acquisitions.
Book value per weighted average common share outstanding came in at $73.64 as of Jun 30, 2024, higher than $67.73 as of Dec 31, 2023.
Balance Sheet Position (as of Jun 30, 2024)
WLFC held $5 million in cash and cash equivalents, down from $7.1 million at 2023-end. Total assets were $2.9 billion, up from $2.7 billion at the end of 2023.
Total liabilities were $2.4 billion, with $2 billion in debt obligations. Debt obligations increased from $1.8 billion as of Dec 31, 2023. Shareholders' equity increased to $492.4 million from $439 million at the end of 2023.
Other Developments
During the second quarter of 2024, Willis Lease Finance expanded its lease portfolio through significant acquisitions. The company purchased three aircraft and eleven engines, along with other parts and equipment, totaling $258.8 million. This compares to $55.8 million spent in the year-ago quarter for nine engines and other parts.
The company declared its first regular quarterly dividend of 25 cents per share, payable on Aug 21, 2024, with a record date of Aug 12, 2024. Additionally, a special dividend of $1.00 per share was paid in the second quarter of 2024.
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Willis Lease (WLFC) Q2 Earnings Soar Y/Y on Lease Revenue Growth
Willis Lease Finance Corporation (WLFC - Free Report) reported earnings per share (EPS) of $6.21 in the second quarter of 2024, a significant increase from $2.02 in the prior-year quarter.
The company's total revenues reached $151.1 million, up 38.6% from $109 million in the same period last year.
In the quarter under review, WLFC experienced significant tailwinds, including record revenues driven by strong lease rent and maintenance reserve revenues, bolstered by heightened asset usage and strategic acquisitions of aircraft and engines. However, the company faced headwinds from rising general and administrative expenses, increased interest expenses due to higher debt levels, and the ongoing challenge of managing the costs associated with spare parts and equipment sales.
Despite these challenges, the company's strategic investments in leasing and maintenance services supported robust financial performance.
Willis Lease Finance Corporation Price, Consensus and EPS Surprise
Willis Lease Finance Corporation price-consensus-eps-surprise-chart | Willis Lease Finance Corporation Quote
Quarterly Operational Update
Lease rent revenues were a record $55.9 million, up 2.7% from $54.4 million in the second quarter of 2023. This growth was driven by the acquisition of new assets, including three aircraft and 11 engines, enhancing the lease portfolio.
Maintenance reserve revenues increased significantly to $62.9 million, up 77.6% from $35.4 million in the second quarter of 2023. This spike was fueled by heightened asset usage by customers, generating substantial short-term maintenance revenues of $45.9 million and long-term maintenance revenues of $17 million.
Spare parts and equipment sales rose to $6.2 million from $4.6 million in the previous year, reflecting variations in sales timing and increased demand for spare parts.
The company recorded a gain of $14.4 million from the sale of seven engines and other leased equipment, a 223.4% increase compared to $4.5 million in the second quarter of 2023.
Income from operations surged to $54.1 million, up from $19.4 million in the year-ago quarter, reflecting improved operational efficiency and asset utilization. Pre-tax income reached a quarterly record of $57.9 million, up 205.3% from $19 million in the prior-year quarter. Net income increased to $42.6 million from $13.8 million in the second quarter of 2023.
Total expenses escalated to $97 million from $89.6 million. Depreciation and amortization slightly decreased to $22.2 million from $22.5 million in the year-ago quarter. The cost of spare parts and equipment sales rose to $5.4 million, up 77.8% year over year. The cost of maintenance services increased to $5.7 million from $4.8 million. General and administrative expenses grew by 9.3% to $34.7 million. Interest expense increased to $24.6 million, up 28.7% due to higher debt levels associated with asset acquisitions.
Book value per weighted average common share outstanding came in at $73.64 as of Jun 30, 2024, higher than $67.73 as of Dec 31, 2023.
Balance Sheet Position (as of Jun 30, 2024)
WLFC held $5 million in cash and cash equivalents, down from $7.1 million at 2023-end. Total assets were $2.9 billion, up from $2.7 billion at the end of 2023.
Total liabilities were $2.4 billion, with $2 billion in debt obligations. Debt obligations increased from $1.8 billion as of Dec 31, 2023. Shareholders' equity increased to $492.4 million from $439 million at the end of 2023.
Other Developments
During the second quarter of 2024, Willis Lease Finance expanded its lease portfolio through significant acquisitions. The company purchased three aircraft and eleven engines, along with other parts and equipment, totaling $258.8 million. This compares to $55.8 million spent in the year-ago quarter for nine engines and other parts.
The company declared its first regular quarterly dividend of 25 cents per share, payable on Aug 21, 2024, with a record date of Aug 12, 2024. Additionally, a special dividend of $1.00 per share was paid in the second quarter of 2024.