Los Angeles-based Air Lease Corp (NYSE:AL) has issued a new series of preferred stock and made corresponding changes to its bylaws, as disclosed in a recent SEC Form 8-K filing. The company, which specializes in aircraft leasing, filed the Certificate of Designations on September 23, 2024, and completed the public offering of its 6.000% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series D, on September 24, 2024.
The newly issued Series D Preferred Stock, with a par value of $0.01 and a liquidation preference of $1,000 per share, ranks senior to Air Lease's common stock and any future junior stock. It is on par with the existing Series A, B, and C Preferred Stocks in terms of dividend payments and asset distribution upon liquidation.
The issuance of the Series D Preferred Stock introduces certain restrictions on the company's ability to declare dividends or repurchase shares of its common stock and other junior or parity stock if dividends on the Series D Preferred Stock have not been paid for the preceding dividend period.
Dividends on the Series D Preferred Stock will accrue at a rate of 6.000% per annum from the issuance date to December 15, 2029, and subsequently at a rate based on the Five-year U.S. Treasury Rate plus 2.560%, with a minimum rate of 6.000%. Dividends will be paid quarterly starting December 15, 2024, subject to declaration by the board and availability of funds. The Series D Preferred Stock is not subject to mandatory redemption or a sinking fund.
In the event of nonpayment of six quarterly dividends, whether consecutive or not, holders of Series D Preferred Stock, together with holders of any other similarly affected preferred stock, will gain the right to elect two additional members to Air Lease's board of directors.
In other recent news, Air Lease Corporation reported potential delays in Boeing aircraft deliveries due to a labor strike at The Boeing Company (NYSE:BA), as stated in its latest 8-K filing with the Securities and Exchange Commission.
The impact of this on the company's capital expenditures remains uncertain. Prior to the strike, Air Lease had taken delivery of two Boeing 737 MAX aircraft and three Boeing 787 aircraft during the third quarter of 2024.
In terms of earnings, Air Lease announced its second quarter 2024 earnings, reporting revenues of $667 million and diluted earnings per share of $0.81. The company maintains a 100% utilization rate despite challenges such as OEM delivery delays and lower end-of-lease revenues.
The company's forward order book is fully placed through 2025, and it anticipates full-year 2024 aircraft deliveries to be between $4.5 billion and $5.5 billion. Despite the potential impact of the Boeing strike on future delivery estimates, Air Lease remains committed to long-term growth.
InvestingPro Insights
As Air Lease Corporation (NYSE:AL) navigates the complexities of the aircraft leasing market, it's crucial for investors to consider the company's financial health and market performance. According to InvestingPro data, Air Lease boasts an impressive gross profit margin of 59.37% over the last twelve months as of Q2 2024, underscoring the company's ability to maintain profitability in its operations. Further bolstering investor confidence, the company has a track record of raising its dividend for 11 consecutive years, a testament to its commitment to shareholder returns despite its significant debt burden.
With a market capitalization of $5.01 billion and a P/E ratio that stands at 9.65, Air Lease appears to be trading at a low earnings multiple, which could indicate that the stock is undervalued compared to its earnings potential. This is further emphasized by the company's price to book ratio of 0.69, suggesting that the stock might be trading below its net asset value. Investors should note that while Air Lease has maintained dividend payments for 12 consecutive years, the company is also expected to experience a net income drop this year.
For those looking to delve deeper into Air Lease's financials and market prospects, InvestingPro offers additional insights and tips. Currently, there are 13 more InvestingPro Tips available, providing a comprehensive analysis for informed investment decisions. For more detailed guidance, visit https://www.investing.com/pro/AL.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.