For Immediate Release
Chicago, IL – September 17, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include United Continental Holdings Inc. (UAL - Analyst Report), Delta Air Lines (DAL - Analyst Report), Southwest Airlines Co. (LUV - Analyst Report), JetBlue Airways Corporation (JBLU - Analyst Report) and Alaska Air Group Inc. (ALK - Analyst Report).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Friday’s Analyst Blog:
August Air Traffic Makes Paltry Gains
Airlines’ struggle with rising fuel costs and weak business travel demand are leading to lower traffic and profits. Though fare hikes helped the major U.S. air carriers to somewhat manage August traffic in green, the earnings estimates are still trending downwards on the back of numerous macroeconomic headwinds. Notably, some low cost carriers once again emerged as the winners in August based on their low fares.
Airline traffic is customarily measured in billions of revenue passenger miles (RPM), which imply revenue generated per mile per passenger.
Consolidated August traffic edged up 0.4% at the largest U.S. airline United Continental Holdings Inc. (UAL - Analyst Report), boosted by international traffic that negated the effect of weak domestic traffic. Capacity (or available seat miles) slid 0.6% year over year while load factor (percentage of seats filled with passengers) grew 90 basis points (bps) year over year to 86.6%. United Continental expects unit revenue to decline 0.5-1.5% year over year for the month of August, measured by passenger revenue per available seat mile (PRASM), a key metric in airlines.
These slight improvements do not offer any encouragement to the company's profitability projections. In the last one month, the Zacks Consensus estimates for UAL went down by 88 cents to $2.70 and 58 cents to $4.53 for 2012 and 2013, respectively. Notably, the Zacks Consensus estimates for this year and the next were $3.58 and $5.11 one month back.
The August traffic for the second largest U.S. airline Delta Air Lines (DAL - Analyst Report) grew only 0.2% year over year, as strong domestic traffic was offset by weak international traffic. Consolidated capacity fell 0.8% while the load factor improved a modest 90 bps to 87.8%. The company’s PRASM increased 4.0% year over year for August. Like UAL, earnings expectations for Delta have also been trending down. The current Zacks Consensus estimates of $2.03 and $2.63 for 2012 and 2013 are down from $2.14 and $2.85 a month ago, respectively.
Traffic for the low-cost carrier Southwest Airlines Co. (LUV - Analyst Report) also nudged up 0.1% year over year in August on the back of 160 bps rise in load factor that partially offset 1.8% drop in capacity. The company expects PRASM to increase 2-3% year over year for August. The Zacks Consensus estimates for this year and the next have decreased by 9 cents to 70 cents and 6 cents to $1.00, respectively, in the past one month.
The discounted U.S. airline JetBlue Airways Corporation (JBLU - Analyst Report) reported a 13.1% year-over-year traffic increase in August, the highest compared to its rivals. On a year-over-year basis, capacity rose 12.8% and load factor grew 30 bps to 87.6%. Despite the solid growth in traffic, earnings estimates for JetBlue are substantially down from the last month. The Zacks Consensus estimates fell by a nickel to 49 cents for 2012 and 4 cents to 63 cents for 2013.
Traffic at Alaska Air Group Inc. (ALK - Analyst Report) also climbed 7.8% year over year in the month of August. Both capacity and load factor witnessed yearly increase of 7.1% and 60 bps, respectively. Like other airlines, earnings estimates for the company dropped for 2012 and 2013 over the past one month. The earnings estimates for Alaska are pegged at $4.81 and $5.32 for this year and the next, respectively.
For the short term (1-3 months), United Continental and Delta hold a Zacks #5 (Strong Sell) Rank and Zacks #4 (Sell) Rank, respectively. The other airlines - Southwest, JetBlue and Alaska retain a Zacks #3 (Hold) Rank.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339