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Airline Stock Roundup: Q2 Earnings Beat at HA & JBLU Amid Fuel Cost Woes
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In the past week, key airline players like JetBlue Airways Corp. (JBLU - Free Report) and Hawaiian Holdings, Inc. (HA - Free Report) unveiled their respective quarterly numbers. Although both the companies reported better-than-expected earnings per share, the metric contracted on a year-over-year basis mainly due to high fuel costs. Both the US-based carriers reported lower-than-expected revenues as well.
European low-cost carrier Ryanair Holdings plc (RYAAY - Free Report) revealed its first-quarter fiscal 2019 (ended Jun 30, 2018) financial numbers. High costs and low average air fares resulted in the carrier’s profit after tax declining 20%.
On the non-earnings front, the China-Taiwan controversy grabbed headlines with carriers like American Airlines Group Inc. (AAL - Free Report) and Delta Air Lines, Inc. (DAL - Free Report) planning to comply with China’s demands of changing their reference pertaining to Taiwan on the airlines’ websites.
1. JetBlue Airways’ second-quarter 2018 earnings per share (excluding 76 cents from non-recurring items) of 38 cents surpassed the Zacks Consensus Estimate of 36 cents. However, the bottom line decreased significantly on a year-over-year basis primarily due to high fuel costs (read more: JetBlue Tops Q2 Earnings Estimates, Declines Y/Y).
Apart from the earnings report, the carrier was in the news when it revealed its intention to trim the workforce in a bid to cut costs. The reductions will reportedly be through layoffs, buyouts and attrition.
2. Hawaiian Holdings’ second-quarter earnings (excluding 12 cents from non-recurring items) of $1.44 per share outpaced the Zacks Consensus Estimate of $1.26. However, quarterly revenues of $715.4 million fell short of the Zacks Consensus Estimate of $717.8 million. While earnings per share decreased, revenues increased on a year-over-year basis.
Operating revenue per available seat mile in the quarter climbed 0.7% year over year. The metric is projected to be down 1.5% to up 1.5% on a year-over-year basis in the third quarter of 2018. The same is expected to grow in the band of 1-3% for 2018.
Capacity is projected to grow between 7.5% and 9.5% in the third quarter. The metric is expected to increase in the band of 5.5-7.5% for 2018. CASM, excluding fuel, is also projected to rise significantly for the ongoing quarter primarily owing to rising labor costs. Fuel cost per gallon (economic) is anticipated to be in the band of $2.10-$2.20 in the third quarter. The metric is envisioned in the $2.05-$2.15 band for 2018.
3. Ryanair Holdings reported financial and operating numbers with net profit of €319 million for the first quarter of fiscal 2019, down 20% year over year due to a 4% decline in average airfares. The top line expanded 9% to €2,079 million on the back of a 7% rise in traffic. Moreover, load factor came in at 96%. During the quarter, the carrier returned €265 million to shareholders through buybacks.
The carrier expects airfares to rise only 1% in the second quarter of fiscal 2019 compared with a 4% rise predicted earlier. Profit after tax in fiscal 2019 is projected at €1.25 billion. The carrier remains concerned about a Brexit-related impact.
4. U.S. based carriers are likely to comply with China’s request pertaining to Taiwan in the next few days. China had requested the carriers to refer Taiwan in their respective websites as “China Taiwan” or the “China Taiwan region.” The request, made in April, had asked the carriers not to refer Taiwan in any other manner.
Price Performance
The following table shows the price movement of the major airline players over the last week and during the past six months.
Company
Past Week
Last 6 months
HA
7.6%
13.9%
UAL
0.7%
11.5%
GOL
17.8%
-18.1%
DAL
-2.7%
3%
JBLU
-13.2%
5.9%
AAL
-0.8%
-4.7%
SAVE
-1.2%
10.3%
LUV
-3.7%
5.1%
CPA
-3%
-12.1%
ALK
-7.1%
2.4%
The table above shows that all airline stocks traded in the red over the last week leading to a 1% decrease in the NYSE ARCA Airline Index. Over the course of six months, the sector tracker has increased 3.7%.
What's Next in the Airline Space?
Investors will look forward to second-quarter earnings reports of the likes of American Airlines, Southwest Airlines Co. (LUV - Free Report) , Alaska Air Group Inc. (ALK - Free Report) and Spirit Airlines on Jul 26.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Airline Stock Roundup: Q2 Earnings Beat at HA & JBLU Amid Fuel Cost Woes
In the past week, key airline players like JetBlue Airways Corp. (JBLU - Free Report) and Hawaiian Holdings, Inc. (HA - Free Report) unveiled their respective quarterly numbers. Although both the companies reported better-than-expected earnings per share, the metric contracted on a year-over-year basis mainly due to high fuel costs. Both the US-based carriers reported lower-than-expected revenues as well.
European low-cost carrier Ryanair Holdings plc (RYAAY - Free Report) revealed its first-quarter fiscal 2019 (ended Jun 30, 2018) financial numbers. High costs and low average air fares resulted in the carrier’s profit after tax declining 20%.
On the non-earnings front, the China-Taiwan controversy grabbed headlines with carriers like American Airlines Group Inc. (AAL - Free Report) and Delta Air Lines, Inc. (DAL - Free Report) planning to comply with China’s demands of changing their reference pertaining to Taiwan on the airlines’ websites.
(Read the last Airline Stock Roundup for Jul 18, 2018)
Recap of the Past Week’s Most Important Stories
1. JetBlue Airways’ second-quarter 2018 earnings per share (excluding 76 cents from non-recurring items) of 38 cents surpassed the Zacks Consensus Estimate of 36 cents. However, the bottom line decreased significantly on a year-over-year basis primarily due to high fuel costs (read more: JetBlue Tops Q2 Earnings Estimates, Declines Y/Y).
Apart from the earnings report, the carrier was in the news when it revealed its intention to trim the workforce in a bid to cut costs. The reductions will reportedly be through layoffs, buyouts and attrition.
2. Hawaiian Holdings’ second-quarter earnings (excluding 12 cents from non-recurring items) of $1.44 per share outpaced the Zacks Consensus Estimate of $1.26. However, quarterly revenues of $715.4 million fell short of the Zacks Consensus Estimate of $717.8 million. While earnings per share decreased, revenues increased on a year-over-year basis.
Operating revenue per available seat mile in the quarter climbed 0.7% year over year. The metric is projected to be down 1.5% to up 1.5% on a year-over-year basis in the third quarter of 2018. The same is expected to grow in the band of 1-3% for 2018.
Capacity is projected to grow between 7.5% and 9.5% in the third quarter. The metric is expected to increase in the band of 5.5-7.5% for 2018. CASM, excluding fuel, is also projected to rise significantly for the ongoing quarter primarily owing to rising labor costs. Fuel cost per gallon (economic) is anticipated to be in the band of $2.10-$2.20 in the third quarter. The metric is envisioned in the $2.05-$2.15 band for 2018.
Hawaiian Holdings carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3. Ryanair Holdings reported financial and operating numbers with net profit of €319 million for the first quarter of fiscal 2019, down 20% year over year due to a 4% decline in average airfares. The top line expanded 9% to €2,079 million on the back of a 7% rise in traffic. Moreover, load factor came in at 96%. During the quarter, the carrier returned €265 million to shareholders through buybacks.
The carrier expects airfares to rise only 1% in the second quarter of fiscal 2019 compared with a 4% rise predicted earlier. Profit after tax in fiscal 2019 is projected at €1.25 billion. The carrier remains concerned about a Brexit-related impact.
4. U.S. based carriers are likely to comply with China’s request pertaining to Taiwan in the next few days. China had requested the carriers to refer Taiwan in their respective websites as “China Taiwan” or the “China Taiwan region.” The request, made in April, had asked the carriers not to refer Taiwan in any other manner.
Price Performance
The following table shows the price movement of the major airline players over the last week and during the past six months.
Company
Past Week
Last 6 months
HA
7.6%
13.9%
UAL
0.7%
11.5%
GOL
17.8%
-18.1%
DAL
-2.7%
3%
JBLU
-13.2%
5.9%
AAL
-0.8%
-4.7%
SAVE
-1.2%
10.3%
LUV
-3.7%
5.1%
CPA
-3%
-12.1%
ALK
-7.1%
2.4%
The table above shows that all airline stocks traded in the red over the last week leading to a 1% decrease in the NYSE ARCA Airline Index. Over the course of six months, the sector tracker has increased 3.7%.
What's Next in the Airline Space?
Investors will look forward to second-quarter earnings reports of the likes of American Airlines, Southwest Airlines Co. (LUV - Free Report) , Alaska Air Group Inc. (ALK - Free Report) and Spirit Airlines on Jul 26.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>