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Airline Stock Roundup: ALGT's Q3 Earnings Miss, GOL's Loss & More
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In the past week, Allegiant Travel Company (ALGT - Free Report) reported lower-than-expected earnings per share and revenues for third-quarter 2023. The results were hurt by the year-over-year decline in air traffic apart from the rise in fuel costs. Average fuel price per gallon increased 6.5% sequentially in third-quarter 2023. Latin American carrier, Gol Linhas reported a loss in the September quarter.
Fortunes were brighter for European low-cost carrier Ryanair Holdings (RYAAY - Free Report) , which reported better-than-expected earnings per share and revenues for second-quarter fiscal 2024 (ended Sep 30, 2023), driven by upbeat passenger volumes. Riding on the upbeat air-travel demand scenario, another Latin American carrier Azul (AZUL - Free Report) reported rosy traffic numbers for the month of October.
Recap of the Past Week’s Most Important Stories
1. Low-cost carrier Allegiant reported third-quarter 2023 earnings (excluding $1.53 from non-recurring items) of 9 cents per share, which fell short of the Zacks Consensus Estimate of 13 cents but surged more than 100% year over year. Operating revenues of $565.4 million also lagged the Zacks Consensus Estimate of $583.7 million but increased marginally on a year-over-year basis. Passenger revenues, which accounted for the bulk (91.3%) of the top line, remained flat on a year-over-year basis. Management now expects 2023 earnings per share (airline) in the $7.75-$8.50 (prior view: $10.50 - $13.00) range.
Updates on the third-quarter earnings report of another low-cost carrier, JetBlue Airways (JBLU - Free Report) , are available in the previous week’s write-up.
2. Gol Linhas incurred third-quarter 2023 loss of 25 cents per share against the Zacks Consensus Estimate of earnings per share of 4 cents. In the year-ago quarter, GOL had incurred a loss of 75 cents. Net operating revenues of $956 million lagged the Zacks Consensus Estimate of $974.4 million. Management now expects capacity to increase 10%-15% year over year in 2023.
3. Ryanair reported second-quarter fiscal 2024 earnings per share of $7.21, which outpaced the Zacks Consensus Estimate of $7.13 and improved year over year. Revenues of $5,361.3 million beat the Zacks Consensus Estimate of $5,137.7 million. Average airfare, which rose 24% in the first half of fiscal 2024, is expected to rise year over year by mid-teens percentage in the fiscal third quarter. Management expects fiscal 2024 traffic to be 183.5 million. Profit after tax is anticipated in the range of €1.85 billion and €2.05 billion for fiscal 2024.
4. For the month of October, Azul’s consolidated traffic increased 13.7% year over year. To match the increased demand situation, AZUL is expanding its capacity. In the same period, capacity grew 8.4% year over year. Since traffic growth was more than capacity expansion, the load factor (% of seats filled by passengers) increased 3.9 percentage points to 81.1% last month.
Price Performance
The following table shows the price movement of the major airline players over the past week and during the past six months.
Image Source: Zacks Investment Research
The table above shows that the majority of the airline stocks traded in the green over the past week. Consequently, the NYSE ARCA Airline Index gained 1% to $48.68 over the past week. Over the course of six months, the sector tracker decreased 18.3%.
What's Next in the Airline Space?
Investors will look forward to the third-quarter 2023 earnings report of Azul, scheduled to be out on Nov 14.
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Airline Stock Roundup: ALGT's Q3 Earnings Miss, GOL's Loss & More
In the past week, Allegiant Travel Company (ALGT - Free Report) reported lower-than-expected earnings per share and revenues for third-quarter 2023. The results were hurt by the year-over-year decline in air traffic apart from the rise in fuel costs. Average fuel price per gallon increased 6.5% sequentially in third-quarter 2023. Latin American carrier, Gol Linhas reported a loss in the September quarter.
Fortunes were brighter for European low-cost carrier Ryanair Holdings (RYAAY - Free Report) , which reported better-than-expected earnings per share and revenues for second-quarter fiscal 2024 (ended Sep 30, 2023), driven by upbeat passenger volumes. Riding on the upbeat air-travel demand scenario, another Latin American carrier Azul (AZUL - Free Report) reported rosy traffic numbers for the month of October.
Recap of the Past Week’s Most Important Stories
1. Low-cost carrier Allegiant reported third-quarter 2023 earnings (excluding $1.53 from non-recurring items) of 9 cents per share, which fell short of the Zacks Consensus Estimate of 13 cents but surged more than 100% year over year. Operating revenues of $565.4 million also lagged the Zacks Consensus Estimate of $583.7 million but increased marginally on a year-over-year basis. Passenger revenues, which accounted for the bulk (91.3%) of the top line, remained flat on a year-over-year basis. Management now expects 2023 earnings per share (airline) in the $7.75-$8.50 (prior view: $10.50 - $13.00) range.
Updates on the third-quarter earnings report of another low-cost carrier, JetBlue Airways (JBLU - Free Report) , are available in the previous week’s write-up.
2. Gol Linhas incurred third-quarter 2023 loss of 25 cents per share against the Zacks Consensus Estimate of earnings per share of 4 cents. In the year-ago quarter, GOL had incurred a loss of 75 cents. Net operating revenues of $956 million lagged the Zacks Consensus Estimate of $974.4 million. Management now expects capacity to increase 10%-15% year over year in 2023.
Currently, Gol Linhas carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3. Ryanair reported second-quarter fiscal 2024 earnings per share of $7.21, which outpaced the Zacks Consensus Estimate of $7.13 and improved year over year. Revenues of $5,361.3 million beat the Zacks Consensus Estimate of $5,137.7 million. Average airfare, which rose 24% in the first half of fiscal 2024, is expected to rise year over year by mid-teens percentage in the fiscal third quarter. Management expects fiscal 2024 traffic to be 183.5 million. Profit after tax is anticipated in the range of €1.85 billion and €2.05 billion for fiscal 2024.
4. For the month of October, Azul’s consolidated traffic increased 13.7% year over year. To match the increased demand situation, AZUL is expanding its capacity. In the same period, capacity grew 8.4% year over year. Since traffic growth was more than capacity expansion, the load factor (% of seats filled by passengers) increased 3.9 percentage points to 81.1% last month.
Price Performance
The following table shows the price movement of the major airline players over the past week and during the past six months.
Image Source: Zacks Investment Research
The table above shows that the majority of the airline stocks traded in the green over the past week. Consequently, the NYSE ARCA Airline Index gained 1% to $48.68 over the past week. Over the course of six months, the sector tracker decreased 18.3%.
What's Next in the Airline Space?
Investors will look forward to the third-quarter 2023 earnings report of Azul, scheduled to be out on Nov 14.