Genesis Lease up despite 3Q2009 loss, Spirit AeroSystems worried about narrowbody production

Genesis Lease reported a net loss of USD3 million for 3Q2009, as depreciation related to planned major maintenance costs ballooned out to USD3.2 million in the quarter and the company suffered USD2.5 million expense related to the proposed merger with AerCap. It also took a USD7.7 million non-cash charge related to its subsequent decision to reduce capacity under its revolving credit facility from USD1 billion to USD200 million.

Revenue was down from USD64.1 to USD60.2 million (-6.2% year-on-year). Rental revenues were down 3.6% year-on-year. 3Q2008 results were boosted by a non-recurring USD3.0 million credit. Without that credit in 2008, rental revenues would have increased by 1.7% during 3Q2009.

EBITDA was down 8.4% year-on-year, to USD47 million.

At the end of the quarter, 54 of the 55 of the aircraft in the company’s portfolio were in operation with 36 airlines in 21 countries. Two of three non-revenue generating aircraft were delivered to two new customers over the quarter and the remaining aircraft is expected to deliver in 4Q2009. Genesis has no further aircraft lease expirations in 2009 and has three scheduled lease expirations in 2010 yet to be contracted for new leases (two of which expire in the 4Q2010).

Spirit AeroSystems reports solid 3Q2009 profit

Spirit AeroSystems reported a 3Q2009 net profit of USD87 million, up 18% year-on-year, on a 3% increase in revenue, to USD1054 million. Much of the better year-on-year result was due to the effect of the Boeing machinists strike in 3Q2008, which dampened revenue.

The company is seeing more signs of stabilisation in the global economy, but has expressed concern that Airbus and Boeing could announced more cuts to production for late 2010, particularly for narrobody aircraft, which both manufacturers are producing at better than 30 per month. Lingering concerns over the B747-8 and B787 programmes also remain, although Spirit is preparing for production restart and ramp-up.

Spirit’s order backlog at the end of 3Q2009 was USd28.2 billion, flat from the end of the previous quarter.

Spirit updated its revenue guidance for full year 2009 to USD4.1-4.2 billion (8-11% year-on-year growth), based on deliveries of aircraft by Boeing of 480-485 and 483 by Airbus for the year. However, earnings per share are expected to decline by 19-24% to USD1.45-1.55 per share.

Net profit for the nine months to 30-Sep-2009 is down 42.2% year-on-year.

Selected Aviation suppliers’ daily share price movements (% change): 05-Nov-09

Yesterday, 5-Nov-2009, lessors, Aircastle (+9.6%), Air Partner (+6.9%), Aercap (+6.3%), among others, all rode the wave of a series of strong reports from leasing companies over recent days and of improved economic sentiment.

Only Aerocentury failed to impress, losing 2.4% of value.