Following the disclosure of its quarterly outcomes, Air Transport Services Group, Inc. (NASDAQ: ATSG) has observed a marked escalation in its shares today. At the latest assessment, ATSG stocks were seen trading up by 13.13% at $14.99.
Subsequent to the market’s closure yesterday, Air Transport (ATSG) unveiled its financial performance, with revenues totaling $486 million, marking a 3% decline, alongside Earnings per Share (diluted) from Continuing Operations at $0.13, a decrease of $0.12.
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Despite these contracted figures, a notable agreement is fueling the surge in stock price witnessed today. Air Transport (ATSG) has entered into a pact to manage an additional ten Boeing 767 freighters for Amazon.com Services LLC within the Amazon Air network by the culmination of 2024.
The operational agreement, under which ATSG’s airlines will oversee these aircraft, is slated for extension until May 2029, with the possibility of an additional five-year extension. This accord fortifies Air Transport’s prominent role within the Amazon Air network, which commenced in 2016.
ATSG is set to uphold Amazon’s customer-centric commitments through its operational capabilities for the foreseeable future. Commencing in the summer of 2024, Air Transport airlines will commence operations with the initial ten Boeing 767-300 freighters supplied by Amazon, with the potential addition of up to ten more aircraft.
The extension of the operating agreement is effective until May 2029, with an option for an additional five-year extension. Furthermore, ATSG has consented to prolong the exercise period for vested warrants concerning 21.8 million shares previously issued to Amazon, modify the vesting conditions, extend the exercise period for unvested existing warrants for 2.9 million shares, and issue new warrants for up to 2.9 million additional shares to Amazon.
Moreover, ATSG has attracted customer interest in other aircraft available for lease. Air Transport anticipates generating positive cash flow in 2024 and has commenced the year on a robust note, having generated $15 million in Free Cash Flow during the first quarter.
