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Is a Beat in Store for Hawaiian Holdings (HA) in Q4 Earnings?

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Hawaiian Holdings Inc., (HA - Free Report) the parent company of Hawaiian Airlines, is scheduled to report fourth-quarter 2016 results on Jan 24, after the market closes.

Last quarter, the company had recorded a positive earnings surprise of 5.49%. Moreover, Hawaiian Holdings beat estimates in three of the last four quarters with an average earnings surprise at 4.58%. Let’s see how things are shaping up for this announcement.

Factors at Play this Quarter

The company posted good traffic results for December and the fourth quarter. Notably, the company transported a record 11 million passengers in 2016. In addition, the company revised the fourth-quarter guidance and now expects Operating Revenue per ASM to increase in the range of 3–6% from fourth quarter of 2015. Earlier, the company had anticipated an increase of 0.5–3.5% in the metric. Fuel cost per gallon is now expected in the range of $1.45–$1.55 instead of $1.50–$1.60 projected earlier.

However, the company expects certain charges to impact its fourth-quarter results. Hawaiian Holdings anticipates a non-cash loss of $5 million in non-operating expenses due to translation of its foreign currency-based bank accounts. It also expects to incur an additional financial charge of around $21 million related to third-party maintenance contract for its Boeing 767 aircraft. Furthermore, Hawaiian Holdings faces competition from peers like SkyWest Inc. (SKYW - Free Report) , and Southwest Airlines Co. (LUV - Free Report) .

We note that the company’s stock has underperformed the broader Zacks categorized Transportation-Airline industry over the last six months. Shares of the company appreciated 29.41%, while the industry gained 22.8% over the same period.

Earnings Whispers

Our proven model shows that Hawaiian Holdings is likely to beat earnings estimates this quarter because it has the perfect combination of two key ingredients.

Zacks ESP: The Most Accurate estimate stands at $1.27, while the Zacks Consensus Estimate is pegged at $1.25. Hence, it has an Earnings ESP is +1.60%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company sports a Zacks Rank #1 (Strong Buy). Please note that stocks with Zacks Rank #1, 2 (Buy) or 3 (Hold) have a significantly higher chance of beating earnings estimates.

Conversely, we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Hawaiian Holdings, Inc. Price and EPS Surprise


Hawaiian Holdings, Inc. Price and EPS Surprise | Hawaiian Holdings, Inc. Quote

A Stock That Warrants a Look

Hawaiian Holdingsis not the only company looking up this time around. Here is another stock from the airline sector that you may want to consider, as our model shows that it has the right combination for an earnings beat this quarter:

JetBlue Airways Corp. (JBLU - Free Report) , which is  scheduled to report fourth-quarter results on Jan 26, has a Zacks Rank #3 and an Earnings ESP of +2.08%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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