) has delivered positive earnings surprises in four out of the last
five quarters, supported by its significant geographic
diversification that makes it less susceptible to economic
downturns in any particular region. This provider of aircraft
rental and leasing services outpaced the Zacks Consensus Estimate
by a remarkable 43.3% in the first-quarter 2012. With a forward P/E
multiple of just 8.6, this Zacks #1 Rank (Strong Buy) is an
attractive pick for value investors.
A Robust Beginning of 2012
On May 3, Aircastle reported first quarter adjusted net earnings
per share of 43 cents, beating the Zacks Consensus Estimate by 13
cents and the year-ago earnings by a penny. Total operating revenue
of $164.9 million surpassed the Zacks Consensus Estimate by 5.3%
and increased 4.4% year over year.
Segment wise, lease rental revenue (historically constituting 95%
-99% of total revenue) was up 5.4%, reflecting synergies from new
aircraft acquisitions. Other revenue was down 46.9%. First quarter
EBITDA was down 2% year over year to $150.6 million, reflecting
lower gain from the sale of older aircrafts along with lower
Upward Estimate Revisions
The Zacks Consensus Estimate for 2012 moved up 12.4% to $1.45 over
the last 90 days, while it increased 4.6% to $1.58 for 2013. The
current Zacks Consensus Estimate for 2012 indicates year-over-year
improvement of 9.5%, while the 2013 estimate implies a 9.4% jump.
Aircastle's shares took a dive beginning in February 2012. However,
the trend reversed in June with shares returning to a growth
trajectory. Going forward, there is an untapped potential locked in
the stock, evidenced by its current forward P/E multiple of 8.6 and
P/B multiple of 0.6 (a P/E ratio below 15.0 and a P/B ratio under
3.0 generally indicate value).
Also, the company has other solid fundamentals, including a PEG
ratio of 0.89, an 11% discount to the benchmark of 1.0 for a fairly
valued stock. This implies strong future growth potential.
Furthermore, Aircastle currently enjoys a dividend yield of 4.7%
compared with the industry average of a meager 0.6%. The
first-quarter of 2012 marked the company's 24th straight dividend
Therefore, in addition to a value stock in nature, Aircastle offers
a lucrative growth and income opportunity.
Headquartered in Stamford, Connecticut, Aircastle Limited was
founded in 2004 and was formerly known as Aircastle Investment
Limited. The company makes acquisitions, leasing and selling of
high-utility commercial jet aircraft to passenger and cargo
airlines globally. It has offices in the U.S., Ireland, and
Singapore. On March 31, 2012, Aircastle had 120 passenger aircrafts
and 25 freighter aircrafts, which were leased to 65 lessees located
in 34 countries.
AIRCASTLE LTD (AYR): Free Stock Analysis Report
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