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

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

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 Trading Down 2.1%

Shares of NASDAQ:WLFC opened at $43.05 on Wednesday. The stock has a market capitalization of $909.65 million, a price-to-earnings ratio of 10.36, a PEG ratio of 3.57 and a beta of 0.76. Willis Lease Finance has a 1-year low of $36.39 and a 1-year high of $81.54. The company has a debt-to-equity ratio of 3.27, a quick ratio of 1.31 and a current ratio of 1.63. The company has a 50 day moving average price of $47.84 and a 200 day moving average price of $60.76.

Willis Lease Finance Increases Dividend

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

Insiders Place Their Bets

In other Willis Lease Finance news, EVP Scott Flaherty sold 18,695 shares of the company’s stock in a transaction on Monday, September 14th. The stock was sold at an average price of $54.57, for a total value of $1,020,186.15. Following the transaction, the executive vice president owned 222,650 shares of the company’s stock, valued at approximately $12,150,010.50. This represents a 7.75% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, Chairman Charles Willis, IV sold 31,400 shares of the company’s stock in a transaction on Monday, August 17th. The shares were sold at an average price of $57.93, for a total value of $1,819,002.00. Following the completion of the transaction, the chairman directly owned 2,612,443 shares in the company, valued at $151,338,822.99. This represents a 1.19% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders have sold 196,700 shares of company stock worth $10,937,108. 53.32% of the stock is owned by insiders.

Wall Street Analysts Forecast Growth

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

Key Willis Lease Finance News

Here are the key news stories impacting Willis Lease Finance this week:

• Positive Sentiment: WLFC reported record quarterly revenue and income from investments. Revenue was $243.74 million, above analysts’ $170.43 million estimate. Willis Lease Finance Q3 results
• Positive Sentiment: The company outlined up to $200 million in share-repurchase flexibility through 2031, which could support shareholder returns. Buyback and expansion plans
• Neutral Sentiment: WLFC also plans to expand its Malaysia WERC and South Florida campus; the articles do not quantify the expected costs or returns from these projects. Buyback and expansion plans
• Negative Sentiment: Quarterly EPS was $0.47, missing the $1.07 consensus estimate by $0.60; reports also said diluted EPS fell. The earnings shortfall may outweigh the strong revenue figure for investors focused on profitability. Q3 diluted EPS and revenue

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.