Why FTAI Aviation Stock Popped on Thursday
FTAI Aviation says it will buy back $1 billion in stock -- but with what cash?
Shares of FTAI Aviation (FTAI) soared 14.5% on Thursday following the release of their Q3 earnings. The aircraft and aircraft engine leasing company reported $977.7 million in revenue, a 46.6% increase compared to the same period last year. Profit for the quarter rose 28% to $150.6 million, with earnings per share growing an impressive 30% year-over-year to $1.43.
Wall Street and investors were taken aback by these results, as FTAI's stock had been on a downward trend this year, down 10% over the past year. To capitalize on the stock's weakness, FTAI has announced plans to double its share buyback authorization to $1 billion, which could retire more than 6% of outstanding shares if completed.
CEO Joe Adams claims the company has clear visibility into 2027 to support these buybacks, but there are concerns. FTAI's balance sheet shows less than $386 million in cash, with over $3.45 billion in long-term debt. Additionally, the company burned through nearly $516 million in negative free cash flow during the first half of the year.
This suggests that if FTAI aims to buy back its shares, it may need to take on further debt to do so.
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