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Allegiant (ALGT) Earnings Surpass Estimates in Q4, Up Y/Y

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Shares of Allegiant Travel Company (ALGT - Free Report) have gained 4.74% ever since it reported better-than-expected earnings per share and revenues in the fourth quarter of 2017, earlier this week.

Markedly, this travel company’s fourth-quarter earnings per share (excluding $2.42 from non-recurring items) came in at $2.71, well above the Zacks Consensus Estimate of $1.78. Also, the bottom line expanded 9.3% on a year-over-year basis. Results were aided by higher revenues.

Quarterly revenues increased 12.7% year over year to $378.6 million, outpacing the Zacks Consensus Estimate of $377.6 million. The top line was boosted primarily by the significant increase (14.2%) in ancillary revenues.

In 2017, Allegiant rewarded shareholders to the tune of $132 million through dividends and buybacks. As of Jan 31, 2018, the company had a share repurchase authorization of $100 million.

Systemwide air traffic (measured in revenue passenger miles) in the reported quarter rose 12.9% and capacity (measured in available seat miles) expanded 11.6% year over year. Load factor (percentage of seats filled by passengers) was 80.6%, up 80 basis points as capacity expansion was outweighed by traffic growth.

Cost per available seat miles (CASM), excluding fuel, increased 20.2% driven by the new pilot agreement among other factors. Total scheduled service revenue per available seat miles (TRASM) also improved 0.1% to 10.79 cents.

We are also impressed by the company's efforts to modernize its fleet.  It aims to maintain an all-Airbus fleet by year-end.

 

Allegiant Travel Company Price, Consensus and EPS Surprise

Allegiant Travel Company Price, Consensus and EPS Surprise | Allegiant Travel Company Quote

Guidance

For the first quarter of 2018, Allegiant expects average seat miles (scheduled and system) to increase year over year in the 10-14% band. Additionally, it expects ASMs (scheduled and system) to grow in the range of 11-15% year over year for the current year. The company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

For 2018, fuel cost per gallon is expected to be $2.17 per gallon. Effective tax rate is also anticipated to lie within the 24-25% range. Capital expenditure is projected at $290 million for the same time period.

Furthermore, the company raised its EPS guidance in the range of $10-$12 (old guidance: $8-$10) for the current year.

Upcoming Releases

Investors interested in the Zacks Transportation sector are keenly waiting for fourth-quarter earnings reports from the key players like Spirit Airlines (SAVE - Free Report) , Ryder System (R - Free Report) and Expeditors International of Washington (EXPD - Free Report) .

Spirit Airlines, Ryder System and Expeditors will report on Feb 6, Feb 16 and Feb 20, respectively.

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