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3 Airline Stocks Set to Beat Q1 Earnings Estimates

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Shares of United (UAL - Free Report) surged nearly 5% on Wednesday, one day after the airline giant posted strong first quarter earnings results. Meanwhile, fellow U.S. airline companies also saw their stock prices climb, which might signal that investors are confident about the whole industry as first quarter earnings season really starts to take off.

United posted adjusted first quarter earnings of $0.50 per share, topping our Zacks Consensus Estimates of $0.49 per share. This bottom line beat helped lift United stock, which had sunk more than 13% over the last 12 weeks.

Investors who follow Zacks might have noticed that we pointed out that analysts bumped up their estimates for UAL directly ahead of earnings. Therefore, Zacks noted that United was likely to surpass Q1 earnings estimates, which can lead to an immediate surge in a company’s stock price.

With that said, investors might want to look ahead to see if other airlines are expected to beat earnings estimates soon. We can utilize our Earnings ESP Screener—normally reserved for Zacks Premium customers—in order to search for stocks that are expected to surprise.

This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.

A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.

Let’s check out three airline stocks that are set to report their financial results over the next week to see if an earnings beat might be in store.

1.     Hawaiian Holdings (HA - Free Report)

Shares of Hawaiian Holdings had climbed over 7% in the last month, prior to Wednesday’s 2.7% surge. However, Hawaiian’s stock price is still down more than 19% over the last year. Looking ahead, the company is projected to see its quarterly revenues climb by 6.2% to hit $652.42 million, based on our current Zacks Consensus Estimates. Meanwhile, Hawaiian’s Q1 earnings are expected to fall 21.2% to hit $0.82 per share. 

This projected year over year decline does not necessarily mean that investors will be disappointed, as earnings beats are often more important, especially in the near-term. Hawaiian is currently a Zacks Rank #3 (Hold) and sports an Earnings ESP of 1.27%. The company’s Most Accurate Estimate—the representation of the most recent analyst sentiment—calls for earnings of $0.83 per share, which comes in 1 cent above our current consensus estimate. Therefore, investors can reasonably expect Hawaiian to post a Q1 earnings beat when it reports its first quarter financial results after market close on Tuesday, April 24.

2.       Alaska Air (ALK - Free Report)

Similar to Hawaiian, the last year has been rough for Alaska Air, with its stock price down nearly 25%. Alaska Air stock has tried to recover over the last month and its stock price popped 1.5% on Wednesday. Furthermore, the struggling airline company is projected to see its Q1 revenues climb by 4.5% to hit $1.83 billion.

Investors might be less pleased to note that Alaska Air’s earnings are expected to plummet 95% from the year-ago period to $0.05 per share. With that said, Alaska Air is currently a Zacks Rank #3 (Hold) and rocks an Earnings ESP of 51.53%, with its Most Accurate Estimate coming in 3 cents above our current consensus estimate. This means that Alaska Air, despite its projected earnings decline, is a stock that could top earnings estimates when it reports before the opening bell on Monday, April 23.

3.       JetBlue Airways (JBLU - Free Report)

Shares of JetBlue popped on Wednesday morning as the company inches closer to the release of its first quarter earnings report on April 24. Prior to this surge, JBLU stock had been down more than 11% over the last month. But JetBlue has earned five upward earnings estimate revisions within the last seven days, and the company’s revenues are expected to climb by nearly 10% to reach $1.76 billion.

Investors might be less pleased to note that JetBlue’s Q1 earnings are expected slip 12% from the year-ago period to hit $0.22 per share. With that said, the company is currently a Zacks Rank #3 (Hold) and boasts an Earnings ESP of 1.02%. This means that JetBlue looks poised to top Q1 earnings estimates. 

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