Market MoversWe moved from one extreme to the other but clearly a few investors suddenly overreacted. GLTA
On the Rise Cargojet Inc. jumped after saying it earned $29.7-million in the third quarter, almost triple the $10.5-million it earned a year earlier.
The Mississauga-based air freight and plane leasing company says its revenues totalled $245.6-million, up 14.8 per cent from $214.0-million during the same quarter in 2023.
Diluted earnings per share were $1.78, up from 61 cents a year earlier.
Co-chief executive officer Jamie Porteous said the company benefitted from interest rate cuts and cooling inflation.
Mr. Porteous said these factors are helping foster a more stable and optimistic economic outlook for Canada.
However, he added that geopolitical uncertainty is affecting the entire transportation industry and that Cargojet is not immune to significant cost increases facing aviation companies and supply chains.
In a note, ATB Capital Markets analyst Chris Murray said: “Revenue from the domestic network/ACMI/Charter of $205.4mm (ATBe: $201.4mm) increased 15.5 per cent year-over-year, driven by outperformance in All-In Charter (up 60.2 per cent year-over-year) on new contracts and demand for ad hoc services. Margins were slightly below ATBe as CJT added block hours in Q3/24 in response to increasing demand conditions, incurring certain “one-time costs”, limiting operating leverage. Management confirmed that easing macro pressure remains supportive of domestic volumes heading into peak season, with demand for global air cargo service remaining intact. CJT announced that it has renewed its NCIB with leverage levels and improving FCF generation supportive of an outsized repurchase program, particularly with demand conditions strengthening. CJT delivered solid Q3/24 results reaffirming our view that demand conditions on the domestic network are normalizing and the impact of new charter contracts, which we expect to support the go-forward margin and FCF generation. We expect a neutral market response.”