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Airline Stock Roundup: DAL & GOL's Bullish Q2 Unit Revenue View, HA in Focus
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In the past week, Delta Air Lines (DAL - Free Report) and Gol Linhas Aereas Inteligentes issued upbeat second-quarter 2019 view with respect to unit revenues, highlighting solid demand for air travel. Delta and GOL Linhas are scheduled to report their respective second-quarter 2019 results on Jul 11 and Aug 1. Both the carriers also reported impressive traffic numbers for June.
Other key airline players like Hawaiian Holdings’ (HA - Free Report) subsidiary — Hawaiian Airlines — and LATAM Airlines too revealed their respective traffic reports for June. Load factor (% of seats filled by passengers) increased at both the carriers as traffic growth outweighed capacity expansion in the month.
1. At Delta, consolidated traffic for June, measured in revenue passenger miles (RPMs), came in at 22.77 billion, up 6.2% year over year. Consolidated capacity (or available seat miles/ASMs) climbed 4% to 25.19 billion on a year-over-year basis. Also, consolidated load factor improved 190 basis points to 90.4%.
For the second quarter, Delta anticipates earnings per share in the band of $2.25-$2.35 (previous view: $2.05-$2.35), indicating a surge of more than 25% year over year. Total revenues are expected to increase 8-8.5% (adjusted) year over year. Previously, the same was projected to grow 6-8%. Moreover, pre-tax margin is anticipated between 15% and 16% (earlier view: 14-16%). (Read more: Delta Up on Robust June Traffic & Upbeat Q2 Guidance)
2. GOL Linhas expects second-quarter passenger unit revenues (PRASK) to rise approximately 24% year over year. Moreover, unit revenue (RASK) is projected to jump nearly 23%. The EBITDA margin is expected between 22% and 24% in the upcoming quarterly release compared with 16.4% achieved in the year-ago period.
Moreover, the company’s consolidated traffic (measured in revenue passenger kilometers [RPK]), climbed 14.4% to 3.22 billion on account of strong demand for air travel. While international RPK surged in excess of 100%, domestic RPK grew 6.5% in June. (Read more: GOL Linhas Stock Skyrockets on Robust June Traffic Report)
3. Traffic at Hawaiian Airlines increased 1.6% to 1.53 billion in June. Available Seat Miles inched up 0.3% to 1.71 billion in the same month. During the first six months of 2019, the carrier recorded a 3.1% rise in RPMs while ASMs increased 2.6%. (Read more: Hawaiian Airlines' Traffic & Load Factor for June Increase)
4. At LATAM Airlines, consolidated traffic increased 7% to 9.56 billion driven by solid travel demand. Additionally, consolidated capacity expanded 3.5% to 11.52 billion. Consolidated load factor increased 3.4 percentage points to 85.9%. Additionally, passenger count climbed 8.8% in the month to 5.56 million.
5. Load factor at another Latin American carrier, Azul (AZUL - Free Report) , increased in June owing to significant growth in traffic. Notably, this key metric improved for the fifth successive month at Azul, supporting strong demand for air travel. On a year-to-date basis, traffic increased 18.4%, while capacity expanded 15.8%. (Read more: Azul's Load Factor in June Rises for the 5th Successive Time)
Performance
The following table shows the price movement of the major airline players over the past week and during the last six months.
The table above shows that most airline stocks traded in the green in the past week, leading to a 2.4% gain in the NYSE ARCA Airline Index. However, over the course of the last six months, the NYSE ARCA Airline Index declined 3.5% despite double-digit increase in shares of Latin American carriers — GOL Linhas and Copa Holdings (CPA - Free Report) .
What's Next in the Airline Space?
Investors keenly await second-quarter 2019 earnings reports of Delta and United Airlines Holdings (UAL - Free Report) due on Jul 11 and 16, respectively.
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Airline Stock Roundup: DAL & GOL's Bullish Q2 Unit Revenue View, HA in Focus
In the past week, Delta Air Lines (DAL - Free Report) and Gol Linhas Aereas Inteligentes issued upbeat second-quarter 2019 view with respect to unit revenues, highlighting solid demand for air travel. Delta and GOL Linhas are scheduled to report their respective second-quarter 2019 results on Jul 11 and Aug 1. Both the carriers also reported impressive traffic numbers for June.
Other key airline players like Hawaiian Holdings’ (HA - Free Report) subsidiary — Hawaiian Airlines — and LATAM Airlines too revealed their respective traffic reports for June. Load factor (% of seats filled by passengers) increased at both the carriers as traffic growth outweighed capacity expansion in the month.
(Read the last Airline Stock Roundup here)
Recap of Past Week’s Most Important Stories
1. At Delta, consolidated traffic for June, measured in revenue passenger miles (RPMs), came in at 22.77 billion, up 6.2% year over year. Consolidated capacity (or available seat miles/ASMs) climbed 4% to 25.19 billion on a year-over-year basis. Also, consolidated load factor improved 190 basis points to 90.4%.
For the second quarter, Delta anticipates earnings per share in the band of $2.25-$2.35 (previous view: $2.05-$2.35), indicating a surge of more than 25% year over year. Total revenues are expected to increase 8-8.5% (adjusted) year over year. Previously, the same was projected to grow 6-8%. Moreover, pre-tax margin is anticipated between 15% and 16% (earlier view: 14-16%). (Read more: Delta Up on Robust June Traffic & Upbeat Q2 Guidance)
Delta carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2. GOL Linhas expects second-quarter passenger unit revenues (PRASK) to rise approximately 24% year over year. Moreover, unit revenue (RASK) is projected to jump nearly 23%. The EBITDA margin is expected between 22% and 24% in the upcoming quarterly release compared with 16.4% achieved in the year-ago period.
Moreover, the company’s consolidated traffic (measured in revenue passenger kilometers [RPK]), climbed 14.4% to 3.22 billion on account of strong demand for air travel. While international RPK surged in excess of 100%, domestic RPK grew 6.5% in June. (Read more: GOL Linhas Stock Skyrockets on Robust June Traffic Report)
3. Traffic at Hawaiian Airlines increased 1.6% to 1.53 billion in June. Available Seat Miles inched up 0.3% to 1.71 billion in the same month. During the first six months of 2019, the carrier recorded a 3.1% rise in RPMs while ASMs increased 2.6%. (Read more: Hawaiian Airlines' Traffic & Load Factor for June Increase)
4. At LATAM Airlines, consolidated traffic increased 7% to 9.56 billion driven by solid travel demand. Additionally, consolidated capacity expanded 3.5% to 11.52 billion. Consolidated load factor increased 3.4 percentage points to 85.9%. Additionally, passenger count climbed 8.8% in the month to 5.56 million.
5. Load factor at another Latin American carrier, Azul (AZUL - Free Report) , increased in June owing to significant growth in traffic. Notably, this key metric improved for the fifth successive month at Azul, supporting strong demand for air travel. On a year-to-date basis, traffic increased 18.4%, while capacity expanded 15.8%. (Read more: Azul's Load Factor in June Rises for the 5th Successive Time)
Performance
The following table shows the price movement of the major airline players over the past week and during the last six months.
The table above shows that most airline stocks traded in the green in the past week, leading to a 2.4% gain in the NYSE ARCA Airline Index. However, over the course of the last six months, the NYSE ARCA Airline Index declined 3.5% despite double-digit increase in shares of Latin American carriers — GOL Linhas and Copa Holdings (CPA - Free Report) .
What's Next in the Airline Space?
Investors keenly await second-quarter 2019 earnings reports of Delta and United Airlines Holdings (UAL - Free Report) due on Jul 11 and 16, respectively.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
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