Allegiant Travel Company (ALGT - Free Report) is scheduled to report second-quarter 2020 results on Jul 29, after market close.
Similar to the first quarter, second-quarter results are expected to reflect coronavirus-related adversities. In fact, travel-demand woes stemming from coronavirus are likely to have had a greater impact on Allegiant’s second-quarter performance than on its first. This is because air travel demand started slowing down mainly in March. Hence, the first quarter faced a limited impact while the second quarter bore the brunt of the meltdown in air travel demand.
With air travel demand significantly below year-ago levels amid coronavirus concerns, the company’s passenger revenues (accounting for approximately 90% of the top line) are expected to have taken a major hit. The Zacks Consensus Estimate for second-quarter passenger revenues indicates a 72.3% plunge from the year-ago reported number. The same for total revenues suggests a 74.4% decline from second-quarter 2019’s reported figure.
Due to suppressed travel demand, Allegiant reduced its second-quarter capacity significantly. The Zacks Consensus Estimate for second-quarter capacity (total system) hints at a 54.8% fall from second-quarter 2019’s reported figure.
With fuel costs accounting for a major chunk of airline expenditures, low fuel prices are anticipated to have partly mitigated the loss of revenues from coronavirus-related woes. Low fuel costs are expected to get reflected in the second-quarter bottom line. The Zacks Consensus Estimate for average fuel cost per gallon (total system) implies a 45.5% decline from the year-ago reported number.
The proven Zacks model predicts an earnings beat for Allegiant in the second quarter of 2020. This is because the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Allegiant has an Earnings ESP of +23.25% as the Most Accurate Estimate is pegged at a loss of $3.48 while the Zacks Consensus Estimate stands at a loss of $4.53. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Allegiant carries a Zacks Rank #3.
Highlights of Q1 Earnings
In the last-reported quarter, the company delivered an earnings surprise of 253.5%. Quarterly revenues also beat the Zacks Consensus Estimate. However, both the top and bottom lines declined year over year with passenger revenues falling 9.8% due to low travel demand.
Other Stocks to Consider
Investors interested in the broader Transportation sector may also consider Expeditors International of Washington, Inc. (EXPD - Free Report) , C.H. Robinson Worldwide, Inc. (CHRW - Free Report) and Hawaiian Holdings, Inc. (HA - Free Report) , as these stocks too possess the right combination of elements to beat on earnings this reporting cycle.
Expeditors has an Earnings ESP of +6.87% and a Zacks Rank of 3. The company will release second-quarter earnings numbers on Aug 4.
C.H. Robinson has an Earnings ESP of +6.02% and a Zacks Rank of 3. The company will announce second-quarter results on Jul 28.
Hawaiian Holdings has an Earnings ESP of +27.51% and a Zacks Rank #3. The company is set to announce second-quarter financial numbers on Jul 28.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>