ATSG reports adjusted third-quarter net income up 72%

Air Transport Services Group (ATSG) reported a third-quarter net loss of $33 million, as revenue increased 31.5% y-o-y to $254 million.

A bad quarter? Hardly.

As was the case with Atlas Air Worldwide Holdings, the main cause of the reported loss was a change in the value of warrants issued to Amazon as part of the agreement under which ATSG leases twenty 767 freighters to Amazon, and operates them for the e-commerce giant on a CMI basis. The success of that agreement has driven up ATSG’s share price, and, therefore, the value of the warrants. Adjusting for this mark-to-market re-evaluation (and a one-time non-cash pension settlement charge), ATSG’s net income was up 71.8% over 3Q16 to $15 million.

Details of the company’s financial performance in the quarter and for the first nine months of 2017 can be seen in the chart at right, but there are a couple of things not shown that are worth pointing out.

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