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Airline Stocks Q4 Earnings Roster for Jan 24: LUV, AAL & ALK
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The fourth-quarter earnings season kicked off in the airline industry with bigwigs like Delta Air Lines (DAL - Free Report) and United Continental Holdings (UAL - Free Report) reporting earnings numbers on Jan 15. While Delta delivered better-than-expected earnings but lower-than-expected revenues, United Continental surpassed on both counts.
Despite its top-line miss in the quarterly results, Delta performed impressively with respect to passenger revenues and unit revenues. Meanwhile, United Continental provided an encouraging guidance for the first quarter of 2019 and the full year besides generating remarkable Q4 stats.
With a major chunk of airline companies yet to release fourth-quarter financial figures and in the wake of United Continental’s breakthrough show this reporting cycle, speculations are rife on other industry players’ performance. Notably, the Chicago, IL-based carrier’s earnings report not only drove its own shares but also handsomely benefited fellow players like American Airlines (AAL - Free Report) , SkyWest (SKYW - Free Report) , JetBlue Airways (JBLU - Free Report) and Alaska Air Group (ALK - Free Report) .
What’s in Store for Q4?
Although it is difficult to accurately predict whether the other industry participants will perform as impressively as United Continental, there are certain tailwinds that hold immense promise for the upcoming quarterly results.
Demand for air travel has been ever-increasing on the back of a thriving economy. This is a major catalyst for driving passenger revenues. With passenger revenues accounting for a bulk of the top line, improvement in this key revenue generating segment is likely to lift the top line in turn.
Additionally, the airline companies have been making relentless efforts to cut down non-fuel unit costs in order to streamline operations. This measure is expected to aid bottom-line growth.
It is a well-documented fact that oil prices are a key input cost for any airline company. Thus, low oil prices are a boon in the sense that reduced operating expenses could enhance the bottom line. In this regard, it is worth noting that oil prices declined nearly 40% in the fourth-quarter (October-December). Given that oil prices have been trending high since the beginning of 2018, this sharp drop will certainly benefit the impending quarterly results when being compared on a sequential basis. However, on a year-over-year basis, most companies’ fourth-quarter fuel price estimate remains at a pretty high level.
Given this backdrop, investors interested in the airline space will keenly await fourth-quarter reports from leading players, namely Southwest Airlines (LUV - Free Report) , American Airlines and Alaska Air Group on Jan 24.
Our quantitative model shows that a company needs the right combination of the following two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Southwest Airlines is a passenger carrier, providing scheduled air transportation in the United States. The company is likely to beat on earnings in the fourth quarter as it has a Zacks Rank #2 (Buy) and an Earnings ESP of +3.40%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In fact, our model predicted an earnings beat for the company when we issued our fourth-quarter earnings preview article. Back then, the stock had the same Earnings ESP but a Zacks Rank of 3.
American Airlines is a major airline headquartered in Fort Worth, TX. The company is not likely to surpass on fourth-quarter earnings despite carrying a Zacks Rank of 2 as it has an Earnings ESP of -2.56%. (Read more: Can American Airlines Beat High Costs in Q4 Earnings?)
American Airlines Group Inc. Price and EPS Surprise
Alaska Air Group is an airline company offering passenger and cargo services across 100 cities in North America. The stock has an Earnings ESP of +2.23% and is a Zacks #2 Ranked player, which buoy investors’ hopes on the company’s likely earnings surprise this season. (Read more: Will Passenger Revenues Aid Alaska Air's Q4 Earnings?)
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
Image: Bigstock
Airline Stocks Q4 Earnings Roster for Jan 24: LUV, AAL & ALK
The fourth-quarter earnings season kicked off in the airline industry with bigwigs like Delta Air Lines (DAL - Free Report) and United Continental Holdings (UAL - Free Report) reporting earnings numbers on Jan 15. While Delta delivered better-than-expected earnings but lower-than-expected revenues, United Continental surpassed on both counts.
Despite its top-line miss in the quarterly results, Delta performed impressively with respect to passenger revenues and unit revenues. Meanwhile, United Continental provided an encouraging guidance for the first quarter of 2019 and the full year besides generating remarkable Q4 stats.
With a major chunk of airline companies yet to release fourth-quarter financial figures and in the wake of United Continental’s breakthrough show this reporting cycle, speculations are rife on other industry players’ performance. Notably, the Chicago, IL-based carrier’s earnings report not only drove its own shares but also handsomely benefited fellow players like American Airlines (AAL - Free Report) , SkyWest (SKYW - Free Report) , JetBlue Airways (JBLU - Free Report) and Alaska Air Group (ALK - Free Report) .
What’s in Store for Q4?
Although it is difficult to accurately predict whether the other industry participants will perform as impressively as United Continental, there are certain tailwinds that hold immense promise for the upcoming quarterly results.
Demand for air travel has been ever-increasing on the back of a thriving economy. This is a major catalyst for driving passenger revenues. With passenger revenues accounting for a bulk of the top line, improvement in this key revenue generating segment is likely to lift the top line in turn.
Additionally, the airline companies have been making relentless efforts to cut down non-fuel unit costs in order to streamline operations. This measure is expected to aid bottom-line growth.
It is a well-documented fact that oil prices are a key input cost for any airline company. Thus, low oil prices are a boon in the sense that reduced operating expenses could enhance the bottom line. In this regard, it is worth noting that oil prices declined nearly 40% in the fourth-quarter (October-December). Given that oil prices have been trending high since the beginning of 2018, this sharp drop will certainly benefit the impending quarterly results when being compared on a sequential basis. However, on a year-over-year basis, most companies’ fourth-quarter fuel price estimate remains at a pretty high level.
Given this backdrop, investors interested in the airline space will keenly await fourth-quarter reports from leading players, namely Southwest Airlines (LUV - Free Report) , American Airlines and Alaska Air Group on Jan 24.
Our quantitative model shows that a company needs the right combination of the following two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Southwest Airlines is a passenger carrier, providing scheduled air transportation in the United States. The company is likely to beat on earnings in the fourth quarter as it has a Zacks Rank #2 (Buy) and an Earnings ESP of +3.40%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In fact, our model predicted an earnings beat for the company when we issued our fourth-quarter earnings preview article. Back then, the stock had the same Earnings ESP but a Zacks Rank of 3.
Southwest Airlines Co. Price and EPS Surprise
Southwest Airlines Co. Price and EPS Surprise | Southwest Airlines Co. Quote
American Airlines is a major airline headquartered in Fort Worth, TX. The company is not likely to surpass on fourth-quarter earnings despite carrying a Zacks Rank of 2 as it has an Earnings ESP of -2.56%. (Read more: Can American Airlines Beat High Costs in Q4 Earnings?)
American Airlines Group Inc. Price and EPS Surprise
American Airlines Group Inc. Price and EPS Surprise | American Airlines Group Inc. Quote
Alaska Air Group is an airline company offering passenger and cargo services across 100 cities in North America. The stock has an Earnings ESP of +2.23% and is a Zacks #2 Ranked player, which buoy investors’ hopes on the company’s likely earnings surprise this season. (Read more: Will Passenger Revenues Aid Alaska Air's Q4 Earnings?)
Alaska Air Group, Inc. Price and EPS Surprise
Alaska Air Group, Inc. Price and EPS Surprise | Alaska Air Group, Inc. Quote
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
See Stocks Today >>