(Reuters) – Air Lease (NYSE:) Corp reported a lower-than-expected quarterly profit on Monday as it made higher interest payments on funds borrowed to finance aircraft purchases.
The California-based company’s results have gained in recent quarters as supply of aircraft from the world’s top two planemakers, Boeing (NYSE:) and Airbus, have been constrained mainly due to parts and labor shortages.
But Air Lease’s interest payments rose 19.8%, to $181.6 million in the first quarter, as the U.S. Federal Reserve kept interest rates high in a bid to tame inflation.
As a result, profit per share was 87 cents, below analysts’ average expectation of 91 cents, according to LSEG data.
Air Lease’s first-quarter revenue rose 4.3% to $663.3 million, but fell short of an expectation of $677.2 million.
The lessor, however, remained bullish on jet demand.
“With aircraft in short supply and values rising, we benefit from continued fleet expansion and sales activity in an industry backdrop that remains positive. We see this environment continuing for the near to medium term future,” Air Lease said in a statement.