Aircraft leasing company FTAI Aviation (NASDAQ:FTAI) reported Q4 CY2024 results exceeding the market’s revenue expectations, with sales up 59.5% year on year to $498.8 million. Its GAAP profit of $0.84 per share was 6.1% below analysts’ consensus estimates.
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FTAI Aviation (FTAI) Q4 CY2024 Highlights:
- Revenue: $498.8 million vs analyst estimates of $494.4 million (59.5% year-on-year growth, 0.9% beat)
- EPS (GAAP): $0.84 vs analyst expectations of $0.89 (6.1% miss)
- Adjusted EBITDA: $252 million vs analyst estimates of $240.3 million (50.5% margin, 4.9% beat)
- EBITDA guidance for the upcoming financial year 2025 is $1.13 billion at the midpoint, above analyst estimates of $1.11 billion
- Operating Margin: 31.7%, up from 28.1% in the same quarter last year
- Market Capitalization: $13.63 billion
“In the last quarter, we delivered outstanding financial performance across the board, and I am pleased to see the continued strength of our Aerospace Products and Aviation Leasing segments,” said Joe Adams, Chairman of the Board and CEO of FTAI.
Company Overview
With a focus on the CFM56 engine that powers Boeing and Airbus’s planes, FTAI Aviation (NASDAQ:FTAI) sells, leases, maintains, and repairs aircraft engines.
Vehicle Parts Distributors
Supply chain and inventory management are themes that grew in focus after COVID wreaked havoc on the global movement of raw materials and components. Transportation parts distributors that boast reliable selection in sometimes specialized areas combined and quickly deliver products to customers can benefit from this theme. Additionally, distributors who earn meaningful revenue streams from aftermarket products can enjoy more steady top-line trends and higher margins. But like the broader industrials sector, transportation parts distributors are also at the whim of economic cycles that impact capital spending, transportation volumes, and demand for discretionary parts and components.
Sales Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, FTAI Aviation grew its sales at an incredible 24.6% compounded annual growth rate. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. FTAI Aviation’s annualized revenue growth of 56.5% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
This quarter, FTAI Aviation reported magnificent year-on-year revenue growth of 59.5%, and its $498.8 million of revenue beat Wall Street’s estimates by 0.9%.
Looking ahead, sell-side analysts expect revenue to grow 33.4% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is admirable and suggests the market is baking in success for its products and services.
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Operating Margin
FTAI Aviation has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 14.5%. This result isn’t surprising as its high gross margin gives it a favorable starting point.
Looking at the trend in its profitability, FTAI Aviation’s operating margin rose by 12.6 percentage points over the last five years, as its sales growth gave it immense operating leverage.
This quarter, FTAI Aviation generated an operating profit margin of 31.7%, up 3.6 percentage points year on year. The increase was encouraging, and since its operating margin rose more than its gross margin, we can infer it was recently more efficient with expenses such as marketing, R&D, and administrative overhead.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Sadly for FTAI Aviation, its EPS declined by 17.1% annually over the last five years while its revenue grew by 24.6%. However, its operating margin actually expanded during this time, telling us that non-fundamental factors such as interest and taxes affected its ultimate earnings.
We can take a deeper look into FTAI Aviation’s earnings to better understand the drivers of its performance. A five-year view shows FTAI Aviation has diluted its shareholders, growing its share count by 20.3%. This dilution overshadowed its increased operating efficiency and has led to lower per share earnings. Taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals. 
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For FTAI Aviation, its two-year annual EPS growth of 54.5% was higher than its five-year trend. Its improving earnings are a great sign, but a caveat is that its EPS is still in the red.
In Q4, FTAI Aviation reported EPS at $0.84, down from $1.01 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast FTAI Aviation’s full-year EPS of negative $0.52 will flip to positive $5.24.
Key Takeaways from FTAI Aviation’s Q4 Results
FTAI Aviation beat analysts’ revenue expectations by a small amount this quarter. EBITDA also exceeded expectations this quarter. Looking ahead, full-year EBITDA guidance exceeded Wall Street’s estimates. Overall, it was a fine quarter, but the stock has been volatile following a short report last month and its aftermath. The stock traded down 2.9% to $136.10 immediately following the results.
Is FTAI Aviation an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
