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Allegiant (ALGT) Posts Solid October Traffic, Load Factor Up
Allegiant Travel Company (ALGT - Free Report) posted impressive traffic figures for October 2018. Traffic for the total system (including scheduled service and fixed fee contract), measured in revenue passenger miles (RPMs), increased 5.2% on a year-over-year basis. System capacity, calculated in available seat miles (ASMs), expanded 4.6%.
Owing to traffic growth outpacing capacity expansion, load factor (percentage of seats filled with passengers) improved 40 basis points (bps) year over year to 80.5%. Allegiant’s passenger count rose 5.9% during the month. The company’s system-wide average fuel cost per gallon in October was approximately $2.56.
In spite of delivering impressive traffic figures, the company is struggling with escalating fuel costs. High fuel costs have dented bottom-line growth in third-quarter 2018 results. Average fuel cost per gallon (system-wide) rallied 33.1% to $2.41 in the quarter. The Las Vegas, NV-based company expects fuel cost per gallon of $2.38 for 2018.
Price Performance
Shares of Allegiant have performed disappointingly in the past six months, mainly due to high fuel costs. The stock has declined 23.6% compared with the industry’s decline of 4.6%.
Zacks Rank & Key Picks
Allegiant carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader Transportation sector are Matson, Inc. (MATX - Free Report) , CSX Corporation (CSX - Free Report) and Norfolk Southern Corporation (NSC - Free Report) . While Matson and Norfolk Southern carry a Zacks Rank #2 (Buy), CSX Corporation sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Matson, CSX Corporation and Norfolk Southern have gained 20.3%, 12.3% and 13.2% in the past six months, respectively.
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.
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