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Can Spirit Airlines (SAVE) Pull a Surprise in Q4 Earnings?
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Florida-based Spirit Airlines (SAVE - Free Report) is scheduled to report fourth-quarter 2016 results on Feb 7, before the opening bell.
Last quarter, the company posted a positive earnings surprise of 6.90%. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in each of the previous four quarters, with an average surprise of 4.71%.
Over the past three months, Spirit Airlines gained 13.35% but failed to beat the Zacks categorized Transportation-Airline industry’s growth of 15.38%.
Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Past Quarter
We are impressed with Spirit Airlines’ last reported 12.5% increase in its December traffic. Moreover, its constant efforts to expand its operations and modernize its fleet are encouraging. The launch of commercial flights to Havana – a favorite tourist spot – also bodes well. We also appreciate Spirit Airlines’ efforts to reward its shareholders through share buyback.
However, the carrier’s top line is under pressure. Unit revenue issues have been hurting the company significantly and the headwinds are expected to persist in the fourth quarter as well. Further, the company continues to operate in a highly competitive market where it faces tough competition from low-cost carriers like JetBlue Airways Corporation (JBLU - Free Report) and Southwest Airlines Co. (LUV - Free Report) . The stock may be significantly hurt if competition intensifies. Moreover, the surge in terror attacks has hurt airline stocks in general and Spirit Airlines is no exception.
Earnings Whispers
Our proven model does not conclusively show that Spirit Airlines is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Spirit Airlines has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 74 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Spirit Airlines has a Zacks Rank #2 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
The company’s earnings surpassed the Zacks Consensus Estimate in each of the previous four quarters, with an average beat of 38.55%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
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Can Spirit Airlines (SAVE) Pull a Surprise in Q4 Earnings?
Florida-based Spirit Airlines (SAVE - Free Report) is scheduled to report fourth-quarter 2016 results on Feb 7, before the opening bell.
Last quarter, the company posted a positive earnings surprise of 6.90%. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in each of the previous four quarters, with an average surprise of 4.71%.
Over the past three months, Spirit Airlines gained 13.35% but failed to beat the Zacks categorized Transportation-Airline industry’s growth of 15.38%.
Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Past Quarter
We are impressed with Spirit Airlines’ last reported 12.5% increase in its December traffic. Moreover, its constant efforts to expand its operations and modernize its fleet are encouraging. The launch of commercial flights to Havana – a favorite tourist spot – also bodes well. We also appreciate Spirit Airlines’ efforts to reward its shareholders through share buyback.
However, the carrier’s top line is under pressure. Unit revenue issues have been hurting the company significantly and the headwinds are expected to persist in the fourth quarter as well. Further, the company continues to operate in a highly competitive market where it faces tough competition from low-cost carriers like JetBlue Airways Corporation (JBLU - Free Report) and Southwest Airlines Co. (LUV - Free Report) . The stock may be significantly hurt if competition intensifies. Moreover, the surge in terror attacks has hurt airline stocks in general and Spirit Airlines is no exception.
Earnings Whispers
Our proven model does not conclusively show that Spirit Airlines is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Spirit Airlines has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 74 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Spirit Airlines has a Zacks Rank #2 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Spirit Airlines, Inc. Price and EPS Surprise
Spirit Airlines, Inc. Price and EPS Surprise | Spirit Airlines, Inc. Quote
Stock to Consider
Here is a company in the airline space that has the right combination of elements to post an earnings beat this quarter.
Copa Holdings, S.A. (CPA - Free Report) , with an Earnings ESP of +10.77% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company’s earnings surpassed the Zacks Consensus Estimate in each of the previous four quarters, with an average beat of 38.55%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>