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Airline Stock Roundup: ALGT & JBLU Beat on Q2 Earnings, SAVE & GOL Miss
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In the past week, key players like JetBlue Airways (JBLU - Free Report) , Allegiant Travel Company (ALGT - Free Report) , Gol Linhas and Spirit Airlines (SAVE - Free Report) reported earnings for second-quarter 2023. Results were aided by upbeat air travel demand and lower fuel costs.
Despite reporting better-than-expected earnings per share, JetBlue shares declined following the earnings release. The downside was due to the bearish guidance issued by management for third quarter as well as full-year 2023. The bearish views are primarily due to management’s decision to end its alliance with American Airlines (AAL - Free Report) , following an adverse court ruling.
Recap of the Past Week’s Most Important Stories
1. JetBlue Airways’ second-quarter 2023 earnings (excluding 4 cents from non-recurring items) of 45 cents per share beat the Zacks Consensus Estimate of 40 cents. The results were aided by strong air travel demand. In the year-ago quarter, JBLU incurred a loss of 47 cents per share. Operating revenues of $2,610 million marginally missed the Zacks Consensus Estimate of $2,610.9 million. However, the top line increased 6.75% year over year on account of improving air travel demand. Passenger revenues, accounting for the bulk of the top line (94.25%), climbed to $2,460 million from $2,302 million a year ago when air travel demand was not so robust. Management expects third-quarter revenues to decrease year over year in the range of 4-8%. JBLU currently carries a Zacks Rank #4 (Sell).
2. Gol Linhas reported second-quarter 2023 loss of 41 cents per share, wider than the Zacks Consensus Estimate of a loss of 11 cents. In the year-ago quarter, GOL had incurred a loss of 43 cents. Net operating revenues of $837.7 million lagged the Zacks Consensus Estimate of $842.7 million. However, with people again taking to the skies, the top line improved year over year. Gol expects capacity to increase 15-20% year over year in 2023.
3. Spirit Airlines’ second-quarter 2023 earnings (excluding 31 cents from non-recurring items) of 29 cents per share missed the Zacks Consensus Estimate of 38 cents. In the year-ago quarter, SAVE had incurred a loss of 30 cents per share. Revenues of $1,432.5 million too missed the Zacks Consensus Estimate of $1,472.2 million. However, the top line improved 4.8% year over year on the back of increased flight volume. In second-quarter 2023, passenger revenues, which accounted for the bulk of the top line (98.4%), increased 4.6% year over year to $1,410.1 million. Other revenues increased 19.4% year over year to $22.4 million.
For third-quarter 2023, management expects total revenues in the $1.3-$1.32 billion range. Adjusted operating margin is expected to be between -5.5% and -7.5%. Fuel gallons consumed are expected to be $147 million. Fuel price per gallon is anticipated to be $2.80. The effective tax rate is projected to be 22.6%. Available seat miles are anticipated to increase 13.7% from third-quarter 2022 actuals.
4. Allegiant Travel reported second-quarter 2023 earnings (excluding 45 cents from non-recurring items) of $4.35 per share, surpassing the Zacks Consensus Estimate of $3.63. The company had reported earnings of 62 cents in the year-ago reported quarter. Operating revenues of $683.8 million beat the Zacks Consensus Estimate of $658.3 million and increased 3.9% on a year-over-year basis. Passenger revenues, which accounted for the bulk (94%) of the top line, increased by around 8.5% on a year-over-year basis. Upbeat air travel demand can be correlated with such an increase.
Management expects available seat miles or ASMs (for scheduled service) for 2023 to increase 0-3% on a year-over-year basis. Total system ASM is also expected to rise 0-3% on a year-over-year basis. Earnings per share (airline) are now expected in the $10.5-$13.00 (prior view: $9-$13) range. Fuel cost per gallon is expected to be $2.90 (prior view: $3). Interest expenses are now expected to be in the range of $145-$150 million (prior view: $150- $160 million).
For 2023, under airline capex, aircraft, engines, induction costs and pre-delivery deposits are now expected in the $490-$500 million range (prior view: $550-$570 million). Capitalized deferred heavy maintenance is expected to be in the range of $60-$70 million. Other airline capital expenditures are now expected to be between $140 million and $145 million (prior view: $130-$150 million). Total project spending (Sunseeker Resorts Project) for 2023 is still expected to be $695 million. The company expects to expand its fleet size to 127 at 2023-end.
The following table shows the price movement of the major airline players over the past week and during the past six months.
Image Source: Zacks Investment Research
The table above shows that all airline stocks traded in the red in the past week. The NYSE ARCA Airline Index declined 6.7% over the period to $68.92. Over the course of the past six months, the sector tracker has increased 7%.
What's Next in the Airline Space?
Investors will look forward to the second-quarter 2023 earnings report of Copa Holdings (CPA - Free Report) , scheduled to be out on Aug 9.
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Airline Stock Roundup: ALGT & JBLU Beat on Q2 Earnings, SAVE & GOL Miss
In the past week, key players like JetBlue Airways (JBLU - Free Report) , Allegiant Travel Company (ALGT - Free Report) , Gol Linhas and Spirit Airlines (SAVE - Free Report) reported earnings for second-quarter 2023. Results were aided by upbeat air travel demand and lower fuel costs.
Despite reporting better-than-expected earnings per share, JetBlue shares declined following the earnings release. The downside was due to the bearish guidance issued by management for third quarter as well as full-year 2023. The bearish views are primarily due to management’s decision to end its alliance with American Airlines (AAL - Free Report) , following an adverse court ruling.
Recap of the Past Week’s Most Important Stories
1. JetBlue Airways’ second-quarter 2023 earnings (excluding 4 cents from non-recurring items) of 45 cents per share beat the Zacks Consensus Estimate of 40 cents. The results were aided by strong air travel demand. In the year-ago quarter, JBLU incurred a loss of 47 cents per share. Operating revenues of $2,610 million marginally missed the Zacks Consensus Estimate of $2,610.9 million. However, the top line increased 6.75% year over year on account of improving air travel demand. Passenger revenues, accounting for the bulk of the top line (94.25%), climbed to $2,460 million from $2,302 million a year ago when air travel demand was not so robust. Management expects third-quarter revenues to decrease year over year in the range of 4-8%. JBLU currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
2. Gol Linhas reported second-quarter 2023 loss of 41 cents per share, wider than the Zacks Consensus Estimate of a loss of 11 cents. In the year-ago quarter, GOL had incurred a loss of 43 cents. Net operating revenues of $837.7 million lagged the Zacks Consensus Estimate of $842.7 million. However, with people again taking to the skies, the top line improved year over year. Gol expects capacity to increase 15-20% year over year in 2023.
3. Spirit Airlines’ second-quarter 2023 earnings (excluding 31 cents from non-recurring items) of 29 cents per share missed the Zacks Consensus Estimate of 38 cents. In the year-ago quarter, SAVE had incurred a loss of 30 cents per share. Revenues of $1,432.5 million too missed the Zacks Consensus Estimate of $1,472.2 million. However, the top line improved 4.8% year over year on the back of increased flight volume. In second-quarter 2023, passenger revenues, which accounted for the bulk of the top line (98.4%), increased 4.6% year over year to $1,410.1 million. Other revenues increased 19.4% year over year to $22.4 million.
For third-quarter 2023, management expects total revenues in the $1.3-$1.32 billion range. Adjusted operating margin is expected to be between -5.5% and -7.5%. Fuel gallons consumed are expected to be $147 million. Fuel price per gallon is anticipated to be $2.80. The effective tax rate is projected to be 22.6%. Available seat miles are anticipated to increase 13.7% from third-quarter 2022 actuals.
4. Allegiant Travel reported second-quarter 2023 earnings (excluding 45 cents from non-recurring items) of $4.35 per share, surpassing the Zacks Consensus Estimate of $3.63. The company had reported earnings of 62 cents in the year-ago reported quarter. Operating revenues of $683.8 million beat the Zacks Consensus Estimate of $658.3 million and increased 3.9% on a year-over-year basis. Passenger revenues, which accounted for the bulk (94%) of the top line, increased by around 8.5% on a year-over-year basis. Upbeat air travel demand can be correlated with such an increase.
Management expects available seat miles or ASMs (for scheduled service) for 2023 to increase 0-3% on a year-over-year basis. Total system ASM is also expected to rise 0-3% on a year-over-year basis. Earnings per share (airline) are now expected in the $10.5-$13.00 (prior view: $9-$13) range. Fuel cost per gallon is expected to be $2.90 (prior view: $3). Interest expenses are now expected to be in the range of $145-$150 million (prior view: $150- $160 million).
For 2023, under airline capex, aircraft, engines, induction costs and pre-delivery deposits are now expected in the $490-$500 million range (prior view: $550-$570 million). Capitalized deferred heavy maintenance is expected to be in the range of $60-$70 million. Other airline capital expenditures are now expected to be between $140 million and $145 million (prior view: $130-$150 million). Total project spending (Sunseeker Resorts Project) for 2023 is still expected to be $695 million. The company expects to expand its fleet size to 127 at 2023-end.
More second-quarter 2023 earnings updates are available in the previous week’s write-up.
Price Performance
The following table shows the price movement of the major airline players over the past week and during the past six months.
Image Source: Zacks Investment Research
The table above shows that all airline stocks traded in the red in the past week. The NYSE ARCA Airline Index declined 6.7% over the period to $68.92. Over the course of the past six months, the sector tracker has increased 7%.
What's Next in the Airline Space?
Investors will look forward to the second-quarter 2023 earnings report of Copa Holdings (CPA - Free Report) , scheduled to be out on Aug 9.