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Airline Stock Roundup: Earnings Miss at DAL, Narrower Loss at UAL & More
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On Apr 13, Delta Air Lines (DAL - Free Report) initiated the first-quarter 2023 earnings season for the airline space. This Atlanta-based carrier reported lower-than-expected earnings per share and revenues. However, investors were impressed by the upbeat outlook for second-quarter 2023. Backed by strong booking trends for summer, the company expects June quarter revenues (adjusted) to increase in the 15-17% band from second-quarter 2022 actuals.
Meanwhile, United Airlines (UAL - Free Report) reported a narrower-than-expected loss for first-quarter 2023. Riding on upbeat air-travel demand, UAL expects to be profitable in second-quarter 2023. Allegiant Travel Company (ALGT - Free Report) and Copa Holdings (CPA - Free Report) reported impressive traffic numbers for the month of March, driven by a buoyant air-travel demand scenario. Spirit Airlines (SAVE - Free Report) was also in the news, courtesy of an impressive labor-related update.
1 Delta’s first-quarter 2023 earnings (excluding 82 cents from non-recurring items) of 25 cents per share missed the Zacks Consensus Estimate of 29 cents. Volatile fuel price and unfavorable weather conditions led to this downtick. Revenues of $12,759 million missed the Zacks Consensus Estimate of $12,767.4 million. Driven by higher air-travel demand, total revenues increased 36.49% on a year-over-year basis.
For second-quarter 2023, DAL, currently carrying a Zacks Rank #2 (Buy), expects capacity to increase 17% from second-quarter 2022 actuals. Fuel price per gallon is expected in the $2.55-$2.80 range. Non-fuel unit cost (adjusted) for the June quarter is expected to increase 1-3% year over year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
2. United Airlines incurred first-quarter 2023 loss (excluding 4 cents from non-recurring items) of 63 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 73 cents. In the year-ago quarter, UAL had incurred a loss of $4.24 per share when air-travel demand was not as buoyant as in the current scenario. Operating revenues of $11,429 million beat the Zacks Consensus Estimate of $11,420.9 million. UAL’s revenues increased 51.1% year over year owing to upbeat air-travel demand.
For the second quarter of 2023, United Airlines expects capacity to improve 18.5% from the year-ago reported figure. Revenues for the June quarter are anticipated to grow 14-16% year over year. UAL expects second-quarter earnings per share in the $3.5-$4 band. UAL forecasts the average aircraft fuel price per gallon in the $2.8-$3 band in the second quarter.
For 2023, United Airlines still expects CASM, excluding fuel, third-party business expenses, profit-sharing and special charges, to remain flat year over year. Capacity is anticipated to grow in the high teens versus 2022 actuals. UAL still expects 2023 earnings per share in the $10-$12 band.
3. Driven by the improvement in air-travel demand, Copa Holdings reported a 9.5% increase in traffic in March 2023 from March 2019 levels. Capacity expanded 4.6% in March. With traffic growth outpacing capacity expansion, the load factor (% of seats filled by passengers) in March 2023 improved to 87.2% from 83.3% in March 2019.
4. At ALGT, revenue passenger miles, a measure of traffic, increased 10.3% in the January-March period. Available seat miles (a measure of capacity) expanded 1.4%. Load factor (% of seats filled by passengers) improved 6.9 points to 85.8%. Departures increased 2.3%. For March, scheduled load factor improved 1.7 points to 88.2%. In the same month, 0.6% more passengers availed ALGT’s scheduled flights than a year ago.
5. Spirit Airlines received encouraging tidings on the labor front when the union representing its flight attendants ratified a new pay-related contract. The approval of the contract makes the concerned employees (6,000 flight attendants) eligible for base wage hikes between 10% and 27% with immediate effect. The company's flight attendants are represented by Association of Flight Attendants-CWA. The duration of the contract is two years and eight months.
Performance
The following table shows the price movement of the major airline players over the past week and during the last six months.
Image Source: Zacks Investment Research
The table above shows that airline stocks exhibited a mixed trend with respect to price over the last five trading days. The NYSE ARCA Airline Index remained roughly flat at $58.89. Over the past six months, the NYSE ARCA Airline Index has gained 9.6%.
What's Next in the Airline Space?
Stay tuned for first-quarter 2023 earnings reports of various other airlines.
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Airline Stock Roundup: Earnings Miss at DAL, Narrower Loss at UAL & More
On Apr 13, Delta Air Lines (DAL - Free Report) initiated the first-quarter 2023 earnings season for the airline space. This Atlanta-based carrier reported lower-than-expected earnings per share and revenues. However, investors were impressed by the upbeat outlook for second-quarter 2023. Backed by strong booking trends for summer, the company expects June quarter revenues (adjusted) to increase in the 15-17% band from second-quarter 2022 actuals.
Meanwhile, United Airlines (UAL - Free Report) reported a narrower-than-expected loss for first-quarter 2023. Riding on upbeat air-travel demand, UAL expects to be profitable in second-quarter 2023. Allegiant Travel Company (ALGT - Free Report) and Copa Holdings (CPA - Free Report) reported impressive traffic numbers for the month of March, driven by a buoyant air-travel demand scenario. Spirit Airlines (SAVE - Free Report) was also in the news, courtesy of an impressive labor-related update.
Read the last Airline Roundup here.
Recap of the Latest Top Stories
1 Delta’s first-quarter 2023 earnings (excluding 82 cents from non-recurring items) of 25 cents per share missed the Zacks Consensus Estimate of 29 cents. Volatile fuel price and unfavorable weather conditions led to this downtick. Revenues of $12,759 million missed the Zacks Consensus Estimate of $12,767.4 million. Driven by higher air-travel demand, total revenues increased 36.49% on a year-over-year basis.
For second-quarter 2023, DAL, currently carrying a Zacks Rank #2 (Buy), expects capacity to increase 17% from second-quarter 2022 actuals. Fuel price per gallon is expected in the $2.55-$2.80 range. Non-fuel unit cost (adjusted) for the June quarter is expected to increase 1-3% year over year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
2. United Airlines incurred first-quarter 2023 loss (excluding 4 cents from non-recurring items) of 63 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 73 cents. In the year-ago quarter, UAL had incurred a loss of $4.24 per share when air-travel demand was not as buoyant as in the current scenario. Operating revenues of $11,429 million beat the Zacks Consensus Estimate of $11,420.9 million. UAL’s revenues increased 51.1% year over year owing to upbeat air-travel demand.
For the second quarter of 2023, United Airlines expects capacity to improve 18.5% from the year-ago reported figure. Revenues for the June quarter are anticipated to grow 14-16% year over year. UAL expects second-quarter earnings per share in the $3.5-$4 band. UAL forecasts the average aircraft fuel price per gallon in the $2.8-$3 band in the second quarter.
For 2023, United Airlines still expects CASM, excluding fuel, third-party business expenses, profit-sharing and special charges, to remain flat year over year. Capacity is anticipated to grow in the high teens versus 2022 actuals. UAL still expects 2023 earnings per share in the $10-$12 band.
3. Driven by the improvement in air-travel demand, Copa Holdings reported a 9.5% increase in traffic in March 2023 from March 2019 levels. Capacity expanded 4.6% in March. With traffic growth outpacing capacity expansion, the load factor (% of seats filled by passengers) in March 2023 improved to 87.2% from 83.3% in March 2019.
4. At ALGT, revenue passenger miles, a measure of traffic, increased 10.3% in the January-March period. Available seat miles (a measure of capacity) expanded 1.4%. Load factor (% of seats filled by passengers) improved 6.9 points to 85.8%. Departures increased 2.3%. For March, scheduled load factor improved 1.7 points to 88.2%. In the same month, 0.6% more passengers availed ALGT’s scheduled flights than a year ago.
5. Spirit Airlines received encouraging tidings on the labor front when the union representing its flight attendants ratified a new pay-related contract. The approval of the contract makes the concerned employees (6,000 flight attendants) eligible for base wage hikes between 10% and 27% with immediate effect. The company's flight attendants are represented by Association of Flight Attendants-CWA. The duration of the contract is two years and eight months.
Performance
The following table shows the price movement of the major airline players over the past week and during the last six months.
Image Source: Zacks Investment Research
The table above shows that airline stocks exhibited a mixed trend with respect to price over the last five trading days. The NYSE ARCA Airline Index remained roughly flat at $58.89. Over the past six months, the NYSE ARCA Airline Index has gained 9.6%.
What's Next in the Airline Space?
Stay tuned for first-quarter 2023 earnings reports of various other airlines.