A month has gone by since the last earnings report for Spirit (SAVE Quick QuoteSAVE - Free Report) . Shares have lost about 8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Spirit due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Spirit Posts Narrower-Than-Expected Q2 Loss

Quarterly loss (excluding 18 cents from non-recurring items) of 30 cents per share was narrower than the Zacks Consensus Estimate and the year-ago quarter’s loss of 34 cents.

In second-quarter 2022, operating revenues of $1,366.6 million surpassed the Zacks Consensus Estimate of $1353.6 million and improved 59% year over year on the back of improving air-travel demand and increased flight volume and higher operating yields. In second-quarter 2022, passenger revenues, which accounted for the bulk of the top line (98.6%), increased 59.2% year over year to $1,347.87 million. Passenger revenues were up 35.5% from the second-quarter 2019 actuals. Other revenues surged 46.6% year over year to $18.77 million

Other Details of Q2

All comparisons (in %) are presented below on a year-over-year basis.

Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) at Spirit soared 18% in the reported quarter. To cater to this increased demand, capacity (measured in available seat miles) expanded to 15.8%. Load factor increased 1.6 points to 86% in the second quarter of 2022. Total operating revenue per available seat miles (TRASM) jumped 37.4% to 11.54 cents in the reported quarter. The average yield surged 34.8% to 13.41 cents.

Adjusted operating expenses (excluding fuel) escalated 63.2% to $1,383.3 million. Average fuel cost per gallon in the reported quarter rose to $4.30, up 120% year over year. Fuel gallons consumed skyrocketed 17.9% to $129.97 million, reflecting the usage of more planes to cater to upbeat air-travel demand. Adjusted cost per available seat miles (CASM) excluding fuel increased 6.7% in the reported quarter.

Spirit took the delivery of four new A320neo aircraft during the reported quarter. The total number of aircraft in its fleet at the end of the reported quarter was 180, up 33.3% from second-quarter 2019.

The company exited the reported quarter with unrestricted cash, cash equivalents and short-term investments, and the liquidity available under the carrier’s revolving credit facility of $1.5 billion. Capital expenditures for the quarter were $60.4 million, primarily related to the purchase of spare parts.

Outlook

SAVE expected adjusted operating expenses for the third quarter in the range of $1,320-$1,330 million. Adjusted pre-tax margin is expected in the -1 to +1% range. Fuel gallons consumed are expected to be $134.6 million in the third quarter. Fuel price per gallon is anticipated in the $3.55-$3.60 range. Effective tax rate is expected to be 21%. Available seat miles are anticipated to increase roughly 14% from third-quarter 2019 actuals.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

The consensus estimate has shifted 21.82% due to these changes.

VGM Scores

At this time, Spirit has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Spirit has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.