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Airline Stock Roundup: JBLU & SAVE Post Q1 Loss, CPA, SKYW, ALGT in Focus

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In the past week, low-cost carriers, namely JetBlue Airways (JBLU - Free Report) and Sprit Airlines (SAVE - Free Report) reported losses in first-quarter 2020 results. With air-travel demand on the wane due to the coronavirus pandemic, the carriers have been persistently incurring losses for the current earnings season. Notably, the likes of United Airlines (UAL - Free Report) and American Airlines (AAL - Free Report) too suffered losses for the March quarter, which they confirmed while announcing respective first-quarter financial numbers in the previous week.

However, offering some relief, the likes of Allegiant Travel Company (ALGT - Free Report) , Copa Holdings (CPA - Free Report) and SkyWest (SKYW - Free Report) managed to record earnings for the first quarter.

Wrap-Up on the Past Week’s Key Headlines

1. JetBlue’s first-quarter 2020 loss (excluding 55 cents from non-recurring items) of 42 cents per share, compared unfavorably with the Zacks Consensus Estimate of a loss of 41 cents. Results of this Zacks Rank #3 (Hold) carrier, were hurt by the coronavirus-induced weakness in air-travel demand. Moreover, operating revenues of $1,588 million decreased 15.1% year over year and also lagged the Zacks Consensus Estimate of $1,690 million. The year-over-year plunge was due to the 16.1% drop in passenger revenues.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

2. Spirit Airlines incurred a loss of 86 cents per share (excluding 45 cents from non-recurring items) in first-quarter 2020, wider than the Zacks Consensus Estimate of a loss of 60 cents. In the year-ago quarter, the company reported earnings of 84 cents. First-quarter results reflect the impact of the coronavirus crisis on domestic and international air travel in March. Operating revenues of $771.1 million missed the Zacks Consensus Estimate of $848.8 million and also declined 9.9% year over year. Passenger revenues fell 10.1% year over year.

3. Copa Holdings’ first-quarter 2020 earnings of $1.75 per share beat the Zacks Consensus Estimate by 19 cents. However, the bottom line was down17.1% year over year, primarily due to lower revenues. Quarterly revenues also declined 11.4% to $595.5 million but beat the Zacks Consensus Estimate of $592.8 million. The year-over-year deterioration was caused by an 11.4% weakness in passenger revenues. Notably, passenger revenues contributed to 96.5% of the top line.

4. SkyWest’s first-quarter 2020 earnings of 59 cents per share missed the Zacks Consensus Estimate of 88 cents. Also, the bottom line slumped 55.64% on a year-over-year basis, primarily due to tepid air-travel demand in March, stemming from the COVID-19 outbreak. Quarterly revenues came in at $729.9 million, beating the Zacks Consensus Estimate of $690 million. The company exited the first quarter with cash and marketable securities of $578 million, up 11.2% sequentially

5. Allegiant’s first-quarter 2020 earnings (excluding $4.13 from non-recurring items) of $2.05 per share surpassed the Zacks Consensus Estimate of 58 cents. However, the bottom line tanked 48.5% year over year due to softness in revenues, emanating from sinking demand for air travel. Quarterly revenues of $409.2 million beat the Zacks Consensus Estimate of $408.3 million. However, the top line decreased 9.39% year over year due to a 9.8% descent in passenger revenues.

Air traffic (measured in revenue passenger miles or RPMs) for scheduled service fell 8.3% in the quarter under review. Capacity (measured in available seat miles or ASMs) increased 4.3% year over year. Load factor (percentage of seats filled by passengers) was 73.8%, down 10.1 percentage points year over year as capacity expanded while traffic declined.

Price Performance

The following table shows the price movement of major airline players over the past week and during the past six months.  

The table above shows that all stocks traded in the red over the past week due to the coronavirus-led low demand scenario. Consequently, the NYSE ARCA Airline Index declined 4.6% over the past week. Over the course of six months, the sector tracker decreased 1.6%.


What's Next in the Airline Space?

Investors keenly await the first-quarter 2020 earnings report of Azul (AZUL - Free Report) on May 14.

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