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Time to Buy Airlines ETF on Mixed-to-Upbeat Earnings?
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So far, the earnings season has been mixed-to-upbeat for the airlines industry. Most of the big airlines have beaten on both the lines while a few reported mixed results. Airline companies belong to a top-ranked Zacks industry (top 7%) and top-ranked Zacks sector (top 38%). Let’s delve a little deeper (read: Sector ETFs & Stocks to Bet On This Earnings Season).
Inside Q2 Numbers
Delta Airlines’ (DAL - Free Report) second-quarter earnings (excluding 14 cents from non-recurring items) of $2.35 per share surpassed the Zacks Consensus Estimate of $2.29. Moreover, the bottom line increased 32.8% on a year-over-year basis. Operating revenues of $12.54 million surpassed the Zacks Consensus Estimate of $12.5 million. Revenues improved from the year-ago number.
For 2019, Delta raised its earnings per share projection. It now expects full-year earnings per share between $6.75 and $7.25 (earlier view: $6-$7). The mid-point of the guided range ($7) is above the Zacks Consensus Estimate of $6.93. The stock has a Zacks Rank #1 (Strong Buy).
United Airlines Holdings’ (UAL - Free Report) second-quarter 2019 earnings per share (excluding 19 cents from non-recurring items) of $4.21 surpassed the Zacks Consensus Estimate of $4.07. The bottom line improved more than 30% year over year, mainly on lower fuel costs. Also, operating revenues increased 5.8% to $11.40 billion in the quarter and beat the Zacks Consensus Estimate of $11.36 billion as well. Higher passenger revenues drove the top line.
United Airlines now projects 2019 earnings between $10.5 and $12 per share (prior view: $10-$12). The mid-point — $11.25 — of the guided range is marginally above the Zacks Consensus Estimate of $11.2. The stock has a Zacks Rank #2 (Buy).
JetBlue Airways (JBLU - Free Report) reported better-than-expected earnings and revenues in the second quarter of 2019. The bottom line (excluding 1 cent from non-recurring items) came in at 60 cents per share, which outpaced the Zacks Consensus Estimate of 57 cents. Moreover, quarterly earnings increased 57.9% on a year-over-year basis on prudent cost management. Operating revenues totaled $2.11 billion, which surpassed the Zacks Consensus Estimate of $2.10 billion. The stock has a Zacks Rank #1.
American Airlines Group’s (AAL - Free Report) second-quarter 2019 earnings (excluding 33 cents from non-recurring items) of $1.82 per share surpassed the Zacks Consensus Estimate by 5 cents. Moreover, the bottom line increased on a year-over-year basis. Revenues totaled $11.96 billion, in line with the Zacks Consensus Estimate. However, the top line improved 2.7% on a year-over-year basis. The stock has a Zacks Rank #3 (Hold).
Low-cost carrier Southwest Airlines Co. (LUV - Free Report) delivered second-quarter 2019 earnings per share of $1.37, beating the Zacks Consensus Estimate of $1.35. Moreover, the bottom-line improved year over year despite higher costs from the MAX groundings. Operating revenues of $5.91 billion lagged the Zacks Consensus Estimate of $5.93 billion. However, the top line rose 2.9% year over year. The stock has a Zacks Rank #3.
Alaska Air Group Inc. (ALK - Free Report) delivered second-quarter 2019 adjusted earnings per share (excluding 6 cents from non-recurring items) of $2.17, beating the Zacks Consensus Estimate of $2.11. Moreover, the bottom line improved substantially year over year on higher revenues. Revenues came in at $2.29 billion, above the Zacks Consensus Estimate of $2.28 billion. The top line also rose year over year. The stock has a Zacks Rank #2.
The $58-million fund holds more than 30 stocks in its portfolio and is concentrated on a few individual securities. United Airlines (12.77%), Delta Airlines (12.7%), American Airlines (11.99%) and Southwest Airlines (11.83%) take the first four positions in the fund.
Alaska Air and JetBlue hold the fifth and eighth position in the fund with a 3.97% and 3.73% weight, respectively. The product charges 60 bps in fees (see all industrials ETFs).
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Time to Buy Airlines ETF on Mixed-to-Upbeat Earnings?
So far, the earnings season has been mixed-to-upbeat for the airlines industry. Most of the big airlines have beaten on both the lines while a few reported mixed results. Airline companies belong to a top-ranked Zacks industry (top 7%) and top-ranked Zacks sector (top 38%). Let’s delve a little deeper (read: Sector ETFs & Stocks to Bet On This Earnings Season).
Inside Q2 Numbers
Delta Airlines’ (DAL - Free Report) second-quarter earnings (excluding 14 cents from non-recurring items) of $2.35 per share surpassed the Zacks Consensus Estimate of $2.29. Moreover, the bottom line increased 32.8% on a year-over-year basis. Operating revenues of $12.54 million surpassed the Zacks Consensus Estimate of $12.5 million. Revenues improved from the year-ago number.
For 2019, Delta raised its earnings per share projection. It now expects full-year earnings per share between $6.75 and $7.25 (earlier view: $6-$7). The mid-point of the guided range ($7) is above the Zacks Consensus Estimate of $6.93. The stock has a Zacks Rank #1 (Strong Buy).
United Airlines Holdings’ (UAL - Free Report) second-quarter 2019 earnings per share (excluding 19 cents from non-recurring items) of $4.21 surpassed the Zacks Consensus Estimate of $4.07. The bottom line improved more than 30% year over year, mainly on lower fuel costs. Also, operating revenues increased 5.8% to $11.40 billion in the quarter and beat the Zacks Consensus Estimate of $11.36 billion as well. Higher passenger revenues drove the top line.
United Airlines now projects 2019 earnings between $10.5 and $12 per share (prior view: $10-$12). The mid-point — $11.25 — of the guided range is marginally above the Zacks Consensus Estimate of $11.2. The stock has a Zacks Rank #2 (Buy).
JetBlue Airways (JBLU - Free Report) reported better-than-expected earnings and revenues in the second quarter of 2019. The bottom line (excluding 1 cent from non-recurring items) came in at 60 cents per share, which outpaced the Zacks Consensus Estimate of 57 cents. Moreover, quarterly earnings increased 57.9% on a year-over-year basis on prudent cost management. Operating revenues totaled $2.11 billion, which surpassed the Zacks Consensus Estimate of $2.10 billion. The stock has a Zacks Rank #1.
American Airlines Group’s (AAL - Free Report) second-quarter 2019 earnings (excluding 33 cents from non-recurring items) of $1.82 per share surpassed the Zacks Consensus Estimate by 5 cents. Moreover, the bottom line increased on a year-over-year basis. Revenues totaled $11.96 billion, in line with the Zacks Consensus Estimate. However, the top line improved 2.7% on a year-over-year basis. The stock has a Zacks Rank #3 (Hold).
Low-cost carrier Southwest Airlines Co. (LUV - Free Report) delivered second-quarter 2019 earnings per share of $1.37, beating the Zacks Consensus Estimate of $1.35. Moreover, the bottom-line improved year over year despite higher costs from the MAX groundings. Operating revenues of $5.91 billion lagged the Zacks Consensus Estimate of $5.93 billion. However, the top line rose 2.9% year over year. The stock has a Zacks Rank #3.
Alaska Air Group Inc. (ALK - Free Report) delivered second-quarter 2019 adjusted earnings per share (excluding 6 cents from non-recurring items) of $2.17, beating the Zacks Consensus Estimate of $2.11. Moreover, the bottom line improved substantially year over year on higher revenues. Revenues came in at $2.29 billion, above the Zacks Consensus Estimate of $2.28 billion. The top line also rose year over year. The stock has a Zacks Rank #2.
U.S. Global Jets ETF (JETS - Free Report) in Focus
The $58-million fund holds more than 30 stocks in its portfolio and is concentrated on a few individual securities. United Airlines (12.77%), Delta Airlines (12.7%), American Airlines (11.99%) and Southwest Airlines (11.83%) take the first four positions in the fund.
Alaska Air and JetBlue hold the fifth and eighth position in the fund with a 3.97% and 3.73% weight, respectively. The product charges 60 bps in fees (see all industrials ETFs).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>