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Zacks Investment Ideas feature highlights: Delta Air Lines, United Airlines and American Airlines
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For Immediate Release
Chicago, IL – July 19, 2023 – Today, Zacks Investment Ideas feature highlights Delta Air Lines (DAL - Free Report) , United Airlines (UAL - Free Report) and American Airlines (AAL - Free Report) .
Previewing Airline Earnings: Is It Time to Buy?
Earnings season shifts into a higher gear this week, with a full slate of companies scheduled to unveil quarterly results. It’ll be a mighty important period, especially following the incredible first half for the market.
And soon, we’ll hear from United Airlines and American Airlines. United Airlines will report on Wednesday, July 19th, after the market’s close, whereas American Airlines will deliver its results on Thursday, July 20th, before the market’s open.
But how does each stack up heading into their respective release? We can use results from a peer, Delta Air Lines, as a small guide.
Delta Air Lines Q2
DAL’s results beat expectations thanks to continued strength in travel demand, exceeding the Zacks Consensus EPS estimate by 10% and delivering a positive 4% sales surprise. Earnings saw strong year-over-year growth, whereas quarterly revenue reflected a quarterly record.
The company’s top line has recovered nicely from the 2020 shock, with revenues now eclipsing pre-pandemic levels.
Delta was firing on all cylinders throughout Q2; adjusted operating income of $2.5 billion reflected a quarterly record, with an operating margin of 17.1%. In addition, operating cash flow totaled $2.6 billion, whereas free cash flow reached $1.1 billion.
International demand was scorching hot, with international passenger revenue reaching a quarterly record and improving 66% year-over-year on the back of record profitability. And domestic demand also remained strong, with revenues growing 8% from the year-ago period.
As we can see from these results, the company had a record-breaking quarter. To top it off, the company raised its full-year EPS guidance to $6-7 and reiterated its previous cash flow guidance of $3 billion.
Analysts have raised their expectations for the upcoming release following the robust results, with the $2.21 per share estimate being revised notably higher over the recent term.
Now, let’s take a closer look at how expectations stack up for UAL and AAL.
United Airlines
Analysts have also become bullish on UAL’s quarter to be released, with the $3.99 per share estimate up roughly 7% since the end of April. The company is forecasted to post big growth, with the estimate reflecting a 180% improvement from the year-ago period.
Our consensus revenue estimate stands at $13.9 billion, 15% higher year-over-year. It’s worth noting that the quarterly estimate has seen zero change over the last several months, with analysts primarily keeping their expectations muted throughout.
American Airlines
Like UAL, analysts have taken their estimates notably higher for the upcoming release over the last several months, with the current $1.58 per share estimate up 27%. The quarterly estimate implies an improvement of roughly 105% year-over-year.
The company is expected to post modest revenue growth, with the $13.7 billion consensus estimate reflecting 2% higher sales. In addition, the quarterly estimate has been modestly revised downward by 1% since the end of April.
Bottom Line
With earnings season shifting into a higher gear this week, investors will have plenty of quarterly prints to remain busy with for some time.
We’ve already heard from Delta Air Lines, with the company breaking multiple records and posting robust results on the back of continued strength in travel demand.
And soon, we’ll hear from United Airlines and American Airlines. Analysts have been bullish for both companies’ quarters to be reported, with positive earnings estimate revisions hitting the tape.
In addition, both companies currently have a positive Earnings ESP Score heading into their prints.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Delta Air Lines, United Airlines and American Airlines
For Immediate Release
Chicago, IL – July 19, 2023 – Today, Zacks Investment Ideas feature highlights Delta Air Lines (DAL - Free Report) , United Airlines (UAL - Free Report) and American Airlines (AAL - Free Report) .
Previewing Airline Earnings: Is It Time to Buy?
Earnings season shifts into a higher gear this week, with a full slate of companies scheduled to unveil quarterly results. It’ll be a mighty important period, especially following the incredible first half for the market.
And soon, we’ll hear from United Airlines and American Airlines. United Airlines will report on Wednesday, July 19th, after the market’s close, whereas American Airlines will deliver its results on Thursday, July 20th, before the market’s open.
But how does each stack up heading into their respective release? We can use results from a peer, Delta Air Lines, as a small guide.
Delta Air Lines Q2
DAL’s results beat expectations thanks to continued strength in travel demand, exceeding the Zacks Consensus EPS estimate by 10% and delivering a positive 4% sales surprise. Earnings saw strong year-over-year growth, whereas quarterly revenue reflected a quarterly record.
The company’s top line has recovered nicely from the 2020 shock, with revenues now eclipsing pre-pandemic levels.
Delta was firing on all cylinders throughout Q2; adjusted operating income of $2.5 billion reflected a quarterly record, with an operating margin of 17.1%. In addition, operating cash flow totaled $2.6 billion, whereas free cash flow reached $1.1 billion.
International demand was scorching hot, with international passenger revenue reaching a quarterly record and improving 66% year-over-year on the back of record profitability. And domestic demand also remained strong, with revenues growing 8% from the year-ago period.
As we can see from these results, the company had a record-breaking quarter. To top it off, the company raised its full-year EPS guidance to $6-7 and reiterated its previous cash flow guidance of $3 billion.
Analysts have raised their expectations for the upcoming release following the robust results, with the $2.21 per share estimate being revised notably higher over the recent term.
Now, let’s take a closer look at how expectations stack up for UAL and AAL.
United Airlines
Analysts have also become bullish on UAL’s quarter to be released, with the $3.99 per share estimate up roughly 7% since the end of April. The company is forecasted to post big growth, with the estimate reflecting a 180% improvement from the year-ago period.
Our consensus revenue estimate stands at $13.9 billion, 15% higher year-over-year. It’s worth noting that the quarterly estimate has seen zero change over the last several months, with analysts primarily keeping their expectations muted throughout.
American Airlines
Like UAL, analysts have taken their estimates notably higher for the upcoming release over the last several months, with the current $1.58 per share estimate up 27%. The quarterly estimate implies an improvement of roughly 105% year-over-year.
The company is expected to post modest revenue growth, with the $13.7 billion consensus estimate reflecting 2% higher sales. In addition, the quarterly estimate has been modestly revised downward by 1% since the end of April.
Bottom Line
With earnings season shifting into a higher gear this week, investors will have plenty of quarterly prints to remain busy with for some time.
We’ve already heard from Delta Air Lines, with the company breaking multiple records and posting robust results on the back of continued strength in travel demand.
And soon, we’ll hear from United Airlines and American Airlines. Analysts have been bullish for both companies’ quarters to be reported, with positive earnings estimate revisions hitting the tape.
In addition, both companies currently have a positive Earnings ESP Score heading into their prints.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.