Shares of Air T, Inc. (AIRT Quick QuoteAIRT - Free Report) have gained 23.1% since the company reported its earnings for the quarter ended Sept. 30, 2024. This compares to the S&P 500 index’s -0.3% change over the same time frame. Over the past month, the stock gained 10.4% compared with the S&P 500’s 3.3% change.

In the second quarter of fiscal 2025, Air T reported revenues of $81.2 million, up 2.9% from $78.9 million in the year-ago period. Operating income surged to $3.9 million from $0.8 million, a 412.4% increase over the previous year’s comparable quarter, driven by strong performance in its commercial jet engines and parts segment, as well as improvements in other core business segments. 

Net income attributable to Air T’s shareholders reached $2.5 million in second-quarter fiscal 2025 against a net loss of $1.6 million in the year-ago quarter. Earnings per share for the quarter were $0.91 against a loss of $0.57 per share in the previous year.

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Other Key Business Metrics

Overnight Air Cargo: This segment, which supports FedEx operations, saw a 10.6% revenue increase to $31.2 million, attributed to an expanded fleet of 105 aircraft in second-quarter fiscal 2025 from 85 aircraft in the prior-year quarter and additional routes granted by FedEx. However, adjusted EBITDA for the segment was down 8.3%, totaling $1.9 million, reflecting the impact of higher administrative costs despite revenue gains.

Ground Equipment Sales (GGS): Revenue from ground equipment sales rose 18% year over year to $14.5 million in second-quarter fiscal 2025 from $12.2 million. The uptick is driven by an increase in the number of de-icing trucks sold. Adjusted EBITDA for this segment reached $0.5 million, improving from a breakeven position last year. Order backlog for this segment also showed strength, with $9.1 million in orders as of Sept. 30, 2024, up from $7 million in the same quarter last year.

Commercial Jet Engines and Parts: Despite a decline in total revenue to $32.9 million in second-quarter fiscal 2025, down 9.7% from last year due to fewer whole engine sales, the segment posted a significant improvement in adjusted EBITDA at $4.1 million, up 209.3% year over year. The increase in profitability stemmed from higher profit margins on Contrail's component sales compared with the prior year's comparable quarter.

Management Commentary

CEO Nick Swenson attributed the quarterly gains to a rebound in aviation parts trading and highlighted leadership efforts in navigating post-COVID challenges. He noted that while demand for de-icing equipment faced setbacks due to warmer weather and uncertain political conditions, GGS is well-positioned with new products expected to gain traction as market conditions stabilize.

Guidance and Strategic Positioning

Air T did not provide explicit forward guidance in its release. However, management pointed to efforts to strengthen the aircraft asset management business through Crestone Asset Management (CAM) and Crestone JV II, which manages a portfolio targeting current-generation narrow-body aircraft and engines. CAM’s assets under management grew to $410.4 million as of Sept. 30, 2024 from $215.1 million as of Dec. 31, 2023, underscoring strategic investments in aviation assets that aim to capture stable returns.

Other Developments

During the quarter, Air T entered a new credit agreement with Alerus Financial, which includes a $14 million revolving credit line and two secured term loans, enhancing the company’s financial flexibility for ongoing investments and operations. Additionally, on Oct. 16, 2024, Air T’s subsidiary AAM 24-1, LLC added $15 million to its existing $15 million note with Honeywell, securing a $30 million principal at an 8.5% interest rate due in 2031. This move demonstrates Air T's continued commitment to asset-backed financing for growth in its aviation business.