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Spirit Airlines (SAVE) Makes Adjustments to Q1 Expectations
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Spirit Airlines (SAVE - Free Report) now expects first-quarter 2024 revenues to be $1.265 billion. The new guidance is at the mid-point of its previously guided range of $1.25-$1.28 billion. The revised projection is tad below the Zacks Consensus Estimate of $1.27 billion.
Adjusted operating margin is now suggested to be between (13.5%) and (14.5%) (earlier expectation was between (12%) and (15%). The guidance assumes that SAVE would recognize approximately $38 million of credits for AOG aircraft (aircraft on the ground). If the company had recognized all the AOG credits to be received for AOG aircraft in the first quarter of 2024 itself, its operating margin would have been between (11.5%) and (12.5%)
We remind investors that in March 2024, Spirit Airlines inked an agreement with International Aero Engines, or IAE, an affiliate of Pratt & Whitney. Per the deal, IAE will extend monthly credits to Spirit Airlines through the current-year end. Credit will be given to SAVE for each aircraft unavailable due to problems with geared turbofan (GTF) engines discovered in July 2023.
GTF engines are produced by Pratt & Whitney. The agreement, estimated to bolster Spirit Airlines’ liquidity by $150-$200 million, hinges on the number of days aircraft are grounded due to engine issues throughout 2024. SAVE has grappled with grounding its A320neo fleet for inspections and anticipates an escalation in the number of grounded aircraft, from an average of 13 in January to approximately 40 by December 2024.
Fuel gallons consumed in first-quarter 2024 are still expected to be $140 million. Fuel price per gallon is still anticipated to be $2.90. The effective tax rate is projected to be 22.6%.
Available seat miles are anticipated to increase 2.1% from first-quarter 2023 actuals. The earlier expectation was for a rise of 1.5%.
Zacks Rank
Spirit Airlines currently carries a Zacks Rank #3 (Hold).
Air Lease has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 20.15%.
The Zacks Consensus Estimate for 2024 earnings has been revised 5.8% upward over the past 60 days. AL has an expected earnings growth rate of 39.6% for 2024. Shares of AL have gained 31.7% in the past year.
KEX has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 5.75%.
KEX has an expected earnings growth rate of 42.6% for 2024. Shares of KEX have gained 41.6% in the past year.
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Spirit Airlines (SAVE) Makes Adjustments to Q1 Expectations
Spirit Airlines (SAVE - Free Report) now expects first-quarter 2024 revenues to be $1.265 billion. The new guidance is at the mid-point of its previously guided range of $1.25-$1.28 billion. The revised projection is tad below the Zacks Consensus Estimate of $1.27 billion.
Adjusted operating margin is now suggested to be between (13.5%) and (14.5%) (earlier expectation was between (12%) and (15%). The guidance assumes that SAVE would recognize approximately $38 million of credits for AOG aircraft (aircraft on the ground). If the company had recognized all the AOG credits to be received for AOG aircraft in the first quarter of 2024 itself, its operating margin would have been between (11.5%) and (12.5%)
We remind investors that in March 2024, Spirit Airlines inked an agreement with International Aero Engines, or IAE, an affiliate of Pratt & Whitney. Per the deal, IAE will extend monthly credits to Spirit Airlines through the current-year end. Credit will be given to SAVE for each aircraft unavailable due to problems with geared turbofan (GTF) engines discovered in July 2023.
GTF engines are produced by Pratt & Whitney. The agreement, estimated to bolster Spirit Airlines’ liquidity by $150-$200 million, hinges on the number of days aircraft are grounded due to engine issues throughout 2024. SAVE has grappled with grounding its A320neo fleet for inspections and anticipates an escalation in the number of grounded aircraft, from an average of 13 in January to approximately 40 by December 2024.
Fuel gallons consumed in first-quarter 2024 are still expected to be $140 million. Fuel price per gallon is still anticipated to be $2.90. The effective tax rate is projected to be 22.6%.
Available seat miles are anticipated to increase 2.1% from first-quarter 2023 actuals. The earlier expectation was for a rise of 1.5%.
Zacks Rank
Spirit Airlines currently carries a Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks from the Zacks Transportation sector are Air Lease Corporation (AL - Free Report) and Kirby Corporation (KEX - Free Report) . Each stock presently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Air Lease has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 20.15%.
The Zacks Consensus Estimate for 2024 earnings has been revised 5.8% upward over the past 60 days. AL has an expected earnings growth rate of 39.6% for 2024. Shares of AL have gained 31.7% in the past year.
KEX has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 5.75%.
KEX has an expected earnings growth rate of 42.6% for 2024. Shares of KEX have gained 41.6% in the past year.