AerSale (NASDAQ:ASLE) Releases Quarterly Earnings Results, Misses Estimates By $0.15 EPS

Key Points

• AerSale missed quarterly expectations: The company reported a $0.09 loss per share versus the $0.06 consensus profit estimate, while revenue of $70.9 million fell short of estimates and declined from $107.4 million a year earlier.
• Cash flow and liquidity remain concerns: Adjusted EBITDA dropped to $2.2 million, year-to-date operating cash flow was negative $33.5 million, and available liquidity was approximately $34 million, including just $2.2 million in cash.
• Management expects a stronger second half: AerSale cited several anticipated engine and aircraft sales, including a $35 million 737 sale, while recurring leasing and Tech Ops revenue continued to grow. Analysts maintain a cautious outlook, with a consensus “Reduce” rating and a $7.17 average price target.

AerSale (NASDAQ:ASLE - Get Free Report) posted its earnings results on Thursday. The company reported ($0.09) EPS for the quarter, missing the consensus estimate of $0.06 by ($0.15), FiscalAI reports. The business had revenue of $70.93 million during the quarter, compared to analyst estimates of $81.24 million. AerSale had a net margin of 3.06% and a return on equity of 3.10%.

Here are the key takeaways from AerSale's conference call:

• Second-quarter results declined sharply: revenue fell to $70.9 million from $107.4 million and adjusted EBITDA dropped to $2.2 million from $18.3 million, primarily because there were no flight equipment sales versus $33.4 million of such sales a year earlier.
• Year-to-date operating cash flow was negative $33.5 million, while available liquidity stood at approximately $34 million, including only $2.2 million in cash; management attributed the cash use to inventory and make-ready investments ahead of asset sales and leases.
• Management expects a meaningfully stronger second half as several engines exit repair, a $35 million 737 sale to the U.S. Marshals Service and other engine sales close, and the remaining two 757 converted freighters are monetized or placed on lease.
• Recurring businesses continued to expand, with leasing revenue up roughly 50% year over year to $12.4 million and Tech Ops revenue up 8.7% to $33.8 million; the company also reported improving efficiency at its Millington and LandingGear facilities.
• AerSale is reallocating some USM material from piece-part sales into complete engines and other flight equipment, arguing this can produce higher margins and faster capital recovery, although it reduces near-term USM revenue and increases capital requirements.

AerSale Stock Performance

AerSale stock traded down $0.14 during trading hours on Thursday, hitting $6.30. The stock had a trading volume of 528,079 shares, compared to its average volume of 317,385. The company has a quick ratio of 0.89, a current ratio of 3.74 and a debt-to-equity ratio of 0.01. The company has a 50-day moving average of $6.31 and a two-hundred day moving average of $6.67. AerSale has a fifty-two week low of $5.56 and a fifty-two week high of $9.12. The company has a market cap of $297.69 million, a PE ratio of 28.64 and a beta of 0.28.

Wall Street Analyst Weigh In

A number of equities analysts have issued reports on the company. Zacks Research raised AerSale to a "hold" rating in a research note on Wednesday, July 1st. Weiss Ratings downgraded AerSale from a "hold (c-)" rating to a "sell (d)" rating in a research note on Friday, May 15th. Finally, B. Riley Financial initiated coverage on shares of AerSale in a report on Monday, June 29th. They set a "neutral" rating and a $7.50 price target for the company. Four equities research analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat, the stock currently has a consensus rating of "Reduce" and an average target price of $7.17.

Insider Transactions at AerSale

In other AerSale news, insider Gary Edmund Jones sold 7,491 shares of the firm's stock in a transaction dated Tuesday, June 9th. The shares were sold at an average price of $6.34, for a total value of $47,492.94. Following the completion of the sale, the insider owned 162,405 shares in the company, valued at approximately $1,029,647.70. This trade represents a 4.41% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Martin Garmendia sold 6,094 shares of AerSale stock in a transaction on Tuesday, June 9th. The stock was sold at an average price of $6.34, for a total value of $38,635.96. Following the sale, the insider directly owned 183,377 shares of the company's stock, valued at approximately $1,162,610.18. This trade represents a 3.22% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last quarter, insiders have sold 21,316 shares of company stock worth $135,160. Insiders own 20.10% of the company's stock.

Institutional Inflows and Outflows

Large investors have recently added to or reduced their stakes in the company. Coldstream Capital Management Inc. bought a new stake in shares of AerSale during the third quarter worth about $151,000. Prelude Capital Management LLC purchased a new stake in shares of AerSale in the third quarter valued at about $202,000. Schonfeld Strategic Advisors LLC purchased a new position in AerSale in the third quarter valued at approximately $169,000. Magnetar Financial LLC purchased a new stake in AerSale in the 3rd quarter worth approximately $152,000. Finally, Brevan Howard Capital Management LP purchased a new position in shares of AerSale in the 2nd quarter worth about $156,000. Institutional investors own 69.48% of the company's stock.

About AerSale

AerSale Inc is an integrated aftermarket solutions provider serving the global commercial, defense and business aviation markets. The company specializes in aircraft and engine maintenance, repair and overhaul (MRO), asset leasing and aviation parts distribution. Its key offerings include airframe heavy maintenance, engine tear‐down and component overhaul, used serviceable material programs and end‐of‐life aircraft disassembly. Through these services, AerSale supports operators seeking to optimize fleet availability, extend asset life cycles and reduce maintenance costs.

Founded in 2009 and headquartered in Coral Gables, Florida, AerSale has grown through strategic acquisitions and organic expansion.

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