In the past week, key players like JetBlue Airways (JBLU - Free Report) , Allegiant Travel Company (ALGT - Free Report) , Gol Linhas and Spirit Airlines (SAVE - Free Report) reported earnings for second-quarter 2023. Results were aided by upbeat air travel demand and lower fuel costs.
Despite reporting better-than-expected earnings per share, JetBlue shares declined following the earnings release. The downside was due to the bearish guidance issued by management for third quarter as well as full-year 2023. The bearish views are primarily due to management’s decision to end its alliance with American Airlines (AAL - Free Report) , following an adverse court ruling.
Recap of the Past Week’s Most Important Stories
1. JetBlue Airways’ second-quarter 2023 earnings (excluding 4 cents from non-recurring items) of 45 cents per share beat the Zacks Consensus Estimate of 40 cents. The results were aided by strong air travel demand. In the year-ago quarter, JBLU incurred a loss of 47 cents per share. Operating revenues of $2,610 million marginally missed the Zacks Consensus Estimate of $2,610.9 million. However, the top line increased 6.75% year over year on account of improving air travel demand. Passenger revenues, accounting for the bulk of the top line (94.25%), climbed to $2,460 million from $2,302 million a year ago when air travel demand was not so robust. Management expects third-quarter revenues to decrease year over year in the range of 4-8%. JBLU currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
2. Gol Linhas reported second-quarter 2023 loss of 41 cents per share, wider than the Zacks Consensus Estimate of a loss of 11 cents. In the year-ago quarter, GOL had incurred a loss of 43 cents. Net operating revenues of $837.7 million lagged the Zacks Consensus Estimate of $842.7 million. However, with people again taking to the skies, the top line improved year over year. Gol expects capacity to increase 15-20% year over year in 2023.
3. Spirit Airlines’ second-quarter 2023 earnings (excluding 31 cents from non-recurring items) of 29 cents per share missed the Zacks Consensus Estimate of 38 cents. In the year-ago quarter, SAVE had incurred a loss of 30 cents per share. Revenues of $1,432.5 million too missed the Zacks Consensus Estimate of $1,472.2 million. However, the top line improved 4.8% year over year on the back of increased flight volume. In second-quarter 2023, passenger revenues, which accounted for the bulk of the top line (98.4%), increased 4.6% year over year to $1,410.1 million. Other revenues increased 19.4% year over year to $22.4 million.
For third-quarter 2023, management expects total revenues in the $1.3-$1.32 billion range. Adjusted operating margin is expected to be between -5.5% and -7.5%. Fuel gallons consumed are expected to be $147 million. Fuel price per gallon is anticipated to be $2.80. The effective tax rate is projected to be 22.6%. Available seat miles are anticipated to increase 13.7% from third-quarter 2022 actuals.
4. Allegiant Travel reported second-quarter 2023 earnings (excluding 45 cents from non-recurring items) of $4.35 per share, surpassing the Zacks Consensus Estimate of $3.63. The company had reported earnings of 62 cents in the year-ago reported quarter. Operating revenues of $683.8 million beat the Zacks Consensus Estimate of $658.3 million and increased 3.9% on a year-over-year basis. Passenger revenues, which accounted for the bulk (94%) of the top line, increased by around 8.5% on a year-over-year basis. Upbeat air travel demand can be correlated with such an increase.
Management expects available seat miles or ASMs (for scheduled service) for 2023 to increase 0-3% on a year-over-year basis. Total system ASM is also expected to rise 0-3% on a year-over-year basis. Earnings per share (airline) are now expected in the $10.5-$13.00 (prior view: $9-$13) range. Fuel cost per gallon is expected to be $2.90 (prior view: $3). Interest expenses are now expected to be in the range of $145-$150 million (prior view: $150- $160 million).
For 2023, under airline capex, aircraft, engines, induction costs and pre-delivery deposits are now expected in the $490-$500 million range (prior view: $550-$570 million). Capitalized deferred heavy maintenance is expected to be in the range of $60-$70 million. Other airline capital expenditures are now expected to be between $140 million and $145 million (prior view: $130-$150 million). Total project spending (Sunseeker Resorts Project) for 2023 is still expected to be $695 million. The company expects to expand its fleet size to 127 at 2023-end.
More second-quarter 2023 earnings updates are available in the previous week’s write-up.
Price Performance
The following table shows the price movement of the major airline players over the past week and during the past six months.
The table above shows that all airline stocks traded in the red in the past week. The NYSE ARCA Airline Index declined 6.7% over the period to $68.92. Over the course of the past six months, the sector tracker has increased 7%.
What's Next in the Airline Space?
Investors will look forward to the second-quarter 2023 earnings report of Copa Holdings (CPA - Free Report) , scheduled to be out on Aug 9.
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In the past week, key players like JetBlue Airways (JBLU - Free Report) , Allegiant Travel Company (ALGT - Free Report) , Gol Linhas and Spirit Airlines (SAVE - Free Report) reported earnings for second-quarter 2023. Results were aided by upbeat air travel demand and lower fuel costs.
Despite reporting better-than-expected earnings per share, JetBlue shares declined following the earnings release. The downside was due to the bearish guidance issued by management for third quarter as well as full-year 2023. The bearish views are primarily due to management’s decision to end its alliance with American Airlines (AAL - Free Report) , following an adverse court ruling.
Recap of the Past Week’s Most Important Stories
1. JetBlue Airways’ second-quarter 2023 earnings (excluding 4 cents from non-recurring items) of 45 cents per share beat the Zacks Consensus Estimate of 40 cents. The results were aided by strong air travel demand. In the year-ago quarter, JBLU incurred a loss of 47 cents per share. Operating revenues of $2,610 million marginally missed the Zacks Consensus Estimate of $2,610.9 million. However, the top line increased 6.75% year over year on account of improving air travel demand. Passenger revenues, accounting for the bulk of the top line (94.25%), climbed to $2,460 million from $2,302 million a year ago when air travel demand was not so robust. Management expects third-quarter revenues to decrease year over year in the range of 4-8%. JBLU currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
2. Gol Linhas reported second-quarter 2023 loss of 41 cents per share, wider than the Zacks Consensus Estimate of a loss of 11 cents. In the year-ago quarter, GOL had incurred a loss of 43 cents. Net operating revenues of $837.7 million lagged the Zacks Consensus Estimate of $842.7 million. However, with people again taking to the skies, the top line improved year over year. Gol expects capacity to increase 15-20% year over year in 2023.
3. Spirit Airlines’ second-quarter 2023 earnings (excluding 31 cents from non-recurring items) of 29 cents per share missed the Zacks Consensus Estimate of 38 cents. In the year-ago quarter, SAVE had incurred a loss of 30 cents per share. Revenues of $1,432.5 million too missed the Zacks Consensus Estimate of $1,472.2 million. However, the top line improved 4.8% year over year on the back of increased flight volume. In second-quarter 2023, passenger revenues, which accounted for the bulk of the top line (98.4%), increased 4.6% year over year to $1,410.1 million. Other revenues increased 19.4% year over year to $22.4 million.
For third-quarter 2023, management expects total revenues in the $1.3-$1.32 billion range. Adjusted operating margin is expected to be between -5.5% and -7.5%. Fuel gallons consumed are expected to be $147 million. Fuel price per gallon is anticipated to be $2.80. The effective tax rate is projected to be 22.6%. Available seat miles are anticipated to increase 13.7% from third-quarter 2022 actuals.
4. Allegiant Travel reported second-quarter 2023 earnings (excluding 45 cents from non-recurring items) of $4.35 per share, surpassing the Zacks Consensus Estimate of $3.63. The company had reported earnings of 62 cents in the year-ago reported quarter. Operating revenues of $683.8 million beat the Zacks Consensus Estimate of $658.3 million and increased 3.9% on a year-over-year basis. Passenger revenues, which accounted for the bulk (94%) of the top line, increased by around 8.5% on a year-over-year basis. Upbeat air travel demand can be correlated with such an increase.
Management expects available seat miles or ASMs (for scheduled service) for 2023 to increase 0-3% on a year-over-year basis. Total system ASM is also expected to rise 0-3% on a year-over-year basis. Earnings per share (airline) are now expected in the $10.5-$13.00 (prior view: $9-$13) range. Fuel cost per gallon is expected to be $2.90 (prior view: $3). Interest expenses are now expected to be in the range of $145-$150 million (prior view: $150- $160 million).
For 2023, under airline capex, aircraft, engines, induction costs and pre-delivery deposits are now expected in the $490-$500 million range (prior view: $550-$570 million). Capitalized deferred heavy maintenance is expected to be in the range of $60-$70 million. Other airline capital expenditures are now expected to be between $140 million and $145 million (prior view: $130-$150 million). Total project spending (Sunseeker Resorts Project) for 2023 is still expected to be $695 million. The company expects to expand its fleet size to 127 at 2023-end.
More second-quarter 2023 earnings updates are available in the previous week’s write-up.
Price Performance
The following table shows the price movement of the major airline players over the past week and during the past six months.
The table above shows that all airline stocks traded in the red in the past week. The NYSE ARCA Airline Index declined 6.7% over the period to $68.92. Over the course of the past six months, the sector tracker has increased 7%.
What's Next in the Airline Space?
Investors will look forward to the second-quarter 2023 earnings report of Copa Holdings (CPA - Free Report) , scheduled to be out on Aug 9.
Free – 5 Dividend Stocks to Fund Your Retirement
Zacks Investment Research has released a Special Report to help you prepare for retirement with 5 diverse stocks that pay whopping dividends. They cut across property management, upscale outlets, financial institutions, and a couple of strong energy producers.
5 Dividend Stocks to Include in Your Retirement Strategy is packed with unconventional wisdom and insights you won’t get from your neighborhood financial planner.
Download Now – Today It’s FREE >>
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