Jet Engines Can Power AI Data Centers. FTAI Aviation Wants to Cash In.

FTAI Aviation says it initiated a $500 million accelerated share repurchase to be completed during the fourth quarter this year. (Courtesy Pratt & Whitney)

Key Points

FTAI Aviation initiates a $500 million accelerated share purchase with the Royal Bank of Canada to be completed in the fourth quarter.
FTAI Aviation says customers in the U.S. and Canada have signed contracts to buy over 100 power units, with deliveries scheduled for 2027 and 2028.
FTAI Aviation reports third-quarter total revenue of $977.7 million, missing analysts’ consensus estimates of $1 billion.

FTAI Aviation gave investors two key reasons to cheer Thursday after reporting third-quarter earnings, pairing a massive $500 million accelerated buyback with surging demand for its jet-engines-turned-power-plants for artificial-intelligence data centers.

What likely had investors buzzing Thursday was that FTAI Aviation said it doubled the share repurchase authorization to $1 billion and initiated a $500 million accelerated share purchase with the Royal Bank of Canada to be completed during the fourth quarter.

Shares of the aerospace company advanced 5.9% to $177 in premarket trading Thursday after closing up 5.3% during the previous session.

But the aerospace company hasn’t bet just on jets. A major growth driver has emerged in its power division, which converts jet engines into portable power generators. These units specifically target power-hungry data centers and factories that need a ton of fast power and can’t wait years to connect to local utility grids.

FTAI Aviation said customers in the U.S. and Canada already have signed contracts to buy over 100 power units, with deliveries scheduled for 2027 and 2028.

Management added that its “Mod-1” power unit has also passed key performance tests, management said. The product generated its target electrical capacity—25 megawatts at peak and 23 megawatts continuously—using either natural gas or liquid fuel.

FTAI Aviation’s aerospace products, a core part of the company’s business, saw strong growth in the third quarter. Revenue soared 76% to $910 million from a year ago, making up nearly 93% of FTAI Aviation’s total revenue.

The aerospace company’s total revenue for the third quarter totaled $977.7 million, missing analysts’ consensus estimates of $1 billion, according to FactSet. Though revenue may have fallen short of projections, that figure grew nearly 47% from $667.06 million in the same quarter last year. Adjusted earnings of $1.43 a share beat analysts’ consensus of $1.41.

Write to Mariapaula Gonzalez at mariapaula.gonzalez@barrons.com

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