Shares of Spirit Airlines (SAVE - Free Report) declined 6.25% on Sep 13, closing the trading session at $16.20. The downside was owing to the unfavorable guidance provided by SAVE for the third quarter of 2023 due to high fuel prices and promotional activity-related discounts. The discounts were for travel booked for the second half of the September quarter through the pre-Thanksgiving travel period.
For third-quarter 2023, fuel price per gallon is now anticipated to be $3.06 (prior view: $2.80). Fuel gallons consumed are still expected to be $147 million. The effective tax rate is still projected to be 22.6%.
Management expects total revenues in the range of $1,245-$1,255 million (prior view: $1,300-$1,320 million). Adjusted operating margin is expected to decline 14.5-15.5% from third-quarter 2022 actuals (earlier estimate was a 5.5-7.5% decline).
Available seat miles are anticipated to increase 13.4% from third-quarter 2022 actuals (prior view: 13.7%).
Spirit Airlines currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Spirit Airlinesis not the only airline to raise third-quarter 2023 guidance for fuel prices. United Airlines (UAL - Free Report) , Southwest Airlines (LUV - Free Report) , Alaska Air Group (ALK - Free Report) and American Airlines (AAL) increased their fuel cost per gallon projections for the third quarter of 2023. United Airlines now expects the fuel cost per gallon in the band of $2.95-$3.05 (the earlier guidance was in the $2.5-$2.8 range).
Southwest Airlines now expects the fuel cost per gallon in the $2.7-$2.8 band (the earlier guidance was in the $2.55-$2.65 range). Operating revenue per available seat mile for the third quarter of 2023 is now expected to decline in the 5-7% band from third-quarter 2022 actuals (the earlier projection was for a 3-7% decline).
Alaska Air now expects the fuel cost per gallon in the $3.15-$3.25 band (the earlier guidance was in the $2.7-$2.8 range). Due to high fuel costs, the third-quarter adjusted pre-tax margin is now expected in the 10-12% range (earlier guidance was 14-16%). Total revenues are now expected to increase in the range of 1-2% from third-quarter 2022 actuals (the earlier projection was for a 0-3% increase).
American Airlines now anticipates third-quarter 2023 average fuel cost per gallon in the band of $2.90-$3.00 (prior view: $2.55-$2.65). Apart from rising fuel expenses, AAL is also burdened with the retroactive pay expense of almost $230 million. Due to high fuel and labor expenses, the third-quarter adjusted operating margin is now anticipated in the range of 4%-5% (prior view: 8-10%). AAL now expects third-quarter 2023 earnings in the range of $0.20-$0.30 per share (prior view: $0.85-$0.95).
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Shares of Spirit Airlines (SAVE - Free Report) declined 6.25% on Sep 13, closing the trading session at $16.20. The downside was owing to the unfavorable guidance provided by SAVE for the third quarter of 2023 due to high fuel prices and promotional activity-related discounts. The discounts were for travel booked for the second half of the September quarter through the pre-Thanksgiving travel period.
For third-quarter 2023, fuel price per gallon is now anticipated to be $3.06 (prior view: $2.80). Fuel gallons consumed are still expected to be $147 million. The effective tax rate is still projected to be 22.6%.
Management expects total revenues in the range of $1,245-$1,255 million (prior view: $1,300-$1,320 million). Adjusted operating margin is expected to decline 14.5-15.5% from third-quarter 2022 actuals (earlier estimate was a 5.5-7.5% decline).
Available seat miles are anticipated to increase 13.4% from third-quarter 2022 actuals (prior view: 13.7%).
Spirit Airlines currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Spirit Airlinesis not the only airline to raise third-quarter 2023 guidance for fuel prices. United Airlines (UAL - Free Report) , Southwest Airlines (LUV - Free Report) , Alaska Air Group (ALK - Free Report) and American Airlines (AAL) increased their fuel cost per gallon projections for the third quarter of 2023. United Airlines now expects the fuel cost per gallon in the band of $2.95-$3.05 (the earlier guidance was in the $2.5-$2.8 range).
Southwest Airlines now expects the fuel cost per gallon in the $2.7-$2.8 band (the earlier guidance was in the $2.55-$2.65 range). Operating revenue per available seat mile for the third quarter of 2023 is now expected to decline in the 5-7% band from third-quarter 2022 actuals (the earlier projection was for a 3-7% decline).
Alaska Air now expects the fuel cost per gallon in the $3.15-$3.25 band (the earlier guidance was in the $2.7-$2.8 range). Due to high fuel costs, the third-quarter adjusted pre-tax margin is now expected in the 10-12% range (earlier guidance was 14-16%). Total revenues are now expected to increase in the range of 1-2% from third-quarter 2022 actuals (the earlier projection was for a 0-3% increase).
American Airlines now anticipates third-quarter 2023 average fuel cost per gallon in the band of $2.90-$3.00 (prior view: $2.55-$2.65). Apart from rising fuel expenses, AAL is also burdened with the retroactive pay expense of almost $230 million. Due to high fuel and labor expenses, the third-quarter adjusted operating margin is now anticipated in the range of 4%-5% (prior view: 8-10%). AAL now expects third-quarter 2023 earnings in the range of $0.20-$0.30 per share (prior view: $0.85-$0.95).
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
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