Allegiant (ALGT) Reports Wider-Than-Expected Loss in Q1

Allegiant Travel Company ALGT incurred first-quarter 2021 loss (excluding $4.00 from non-recurring items) of $3.58 per share, wider than the Zacks Consensus Estimate of a loss of $3.17. Results were hurt by coronavirus-induced weakness in air-travel demand. However, sentiments were bullish in the year-ago quarter, when the company delivered earnings of $2.05 per share.

Moreover, operating revenues of $279.1 million plunged 31.8% year over year and missed the Zacks Consensus Estimate of $284.3 million. The downside was due to 32.3% fall in passenger revenues, which accounted for bulk (92%) of the top line.

Allegiant Travel Company Price, Consensus and EPS Surprise

Allegiant Travel Company Price, Consensus and EPS Surprise

Allegiant Travel Company price-consensus-eps-surprise-chart | Allegiant Travel Company Quote

Quarter in Details

Air traffic (measured in revenue passenger miles or RPMs) for scheduled service declined 25.9% in the quarter under review. Capacity (measured in available seat miles or ASMs) declined 1.1% year over year. Consequently, load factor (percentage of seats filled by passengers) deteriorated 1850 basis points to 55.3% in the reported quarter as traffic plunge outweighed capacity contraction.

Operating cost per available seat miles (CASM) excluding fuel dipped 60.3% year over year. Average fuel cost per gallon (scheduled) declined 0.5% to $1.86 in the quarter. Moreover, total scheduled service passenger revenue per available seat miles (TRASM) fell 30.8% to 6.89 cents.

Liquidity

As of Mar 31, 2021, Allegiant Travel’s unrestricted cash and investments totalled $301.6 million compared with $152.8 million at the end of December 2020. Long-term debt and finance lease obligations (net of current maturities and related costs) came in at $1,459.6 million, up 1.2% from 2020-end levels.

Q2 Expectations

For the second quarter, ASM (for scheduled service as well as total system) are expected to increase between 2% to 6%, compared to second-quarter 2019 figures.

Scheduled service revenue (excluding fixed fee and other revenue) are expected to go down 6-10%, from second-quarter 2019 figures.

Fuel cost per gallon is expected to be at $1.99.

2021 Expectations

For 2021, aircraft, engines and induction costs are kept unchanged from its previous expectation of $115-$125 million.

Capitalized airbus deferred heavy maintenance is kept unchanged from its previous expectation of $50-$60 million.

Other capital expenditures are now expected between $40 million to $50 million (previous expectation: $20 million to $30 million).

Interest expenses are now expected in the range of $65-$70 million (previous expectation: $50-$55 million).

Zacks Rank

Allegiant Travel currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Sectorial Snapshots

Let’s glance through some of the other recently-released earnings reports from companies within the Zacks Transportation sector.

Canadian National Railway Co. CNI reported first-quarter 2021 earnings (excluding 11 cents from non-recurring items) of 97 cents per share (C$1.23), missing the Zacks Consensus Estimate of 99 cents. Quarterly revenues of $2,791.6 million (C$3,535 million) lagged the Zacks Consensus Estimate of $2,813.1 million.

Landstar System LSTR reported first-quarter 2021 earnings of $2.01 per share, surpassing the Zacks Consensus Estimate of $1.61. Revenues of $1,287.5 million outperformed the Zacks Consensus Estimate of $1,142.5 million.

Southwest Airlines LUV incurred a loss of $1.72 per share (excluding $1.91 from non-recurring items) in the first quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $1.82. Moreover, operating revenues of $2,052 million surpassed the Zacks Consensus Estimate of $2,031.7 million.

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