Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of aircraft leasing company Atlas Air Worldwide (AAWW) fell 20% today after adjusting guidance.
So what: Management now expects third-quarter earnings of $1.13 per share and full-year earnings of $3.40-$3.80 per share. Analysts had expected earnings of $1.37 per share in the most recent quarter and $4.73 per share for the full year so this was far below what investors had priced into the stock.
Now what: The airfreight peak season is weaker than expected and military cargo volumes are down as well. This has caught investors off guard but I don't think it's as bad as the market's reaction. Shares are now trading at 10 times the top end of earnings and there's clearly upside if the market improves. I think this could present a buying opportunity for investors with an eye on the long term.
