Spirit Airlines (SAVE) Q2 Earnings & Revenues Beat, Up Y/Y

Spirit Airlines, Inc. SAVE reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.

Quarterly loss (excluding 18 cents from non-recurring items) of 30 cents per share was narrower than the Zacks Consensus Estimate and the year-ago quarter’s loss of 34 cents.

In second-quarter 2022, operating revenues of $1,366.6 million surpassed the Zacks Consensus Estimate of $1353.6 million and improved 59% year over year on the back of improving air-travel demand and increased flight volume and higher operating yields.

In second-quarter 2022, passenger revenues, which accounted for the bulk of the top line (98.6%), increased 59.2% year over year to $1,347.87 million. Passenger revenues were up 35.5% from the second-quarter 2019 actuals. Other revenues surged 46.6% year over year to $18.77 million.

Spirit Airlines, Inc. Price, Consensus and EPS Surprise

 

Spirit Airlines, Inc. Price, Consensus and EPS Surprise

Spirit Airlines, Inc. price-consensus-eps-surprise-chart | Spirit Airlines, Inc. Quote

Following the termination of the deal between Spirit Airlines and Frontier Airlines, JBLU agreed to buy SAVE for $3.8 billion. The deal on materialization will create the fifth largest airline in the United States. Per the terms of the deal, JBLU will pay $33.5 in cash for each share of SAVE. If the deal becomes effective after clearing regulatory hurdles, JBLU’s management confirmed that the carrier will buy more planes, boost the pilot-hiring process and renovate SAVE planes by adding to the legroom and boosting in-flight entertainment. The deal is expected to close by first-half 2024.

All comparisons (in %) are presented below on a year-over-year basis.

Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) at Spirit soared 18% in the reported quarter. To cater to this increased demand, capacity (measured in available seat miles) expanded to 15.8%. Load factor increased 1.6 points to 86% in the second quarter of 2022. Total operating revenue per available seat miles (TRASM) jumped 37.4% to 11.54 cents in the reported quarter. The average yield surged 34.8% to 13.41 cents.

Adjusted operating expenses (excluding fuel) escalated 63.2% to $1,383.3 million. Average fuel cost per gallon in the reported quarter rose to $4.30, up 120% year over year. Fuel gallons consumed skyrocketed 17.9% to $129.97 million, reflecting the usage of more planes to cater to upbeat air-travel demand. Adjusted cost per available seat miles (CASM) excluding fuel increased 6.7% in the reported quarter.

Spirit took the delivery of four new A320neo aircraft during the reported quarter. The total number of aircraft in its fleet at the end of the reported quarter was 180, up 33.3% from second-quarter 2019.

The company exited the reported quarter with unrestricted cash, cash equivalents and short-term investments, and the liquidity available under the carrier’s revolving credit facility of $1.5 billion. Capital expenditures for the quarter were $60.4 million, primarily related to the purchase of spare parts.

Q3 Outlook

SAVE expected adjusted operating expenses for the third quarter in the range of $1,320-$1,330 million. Adjusted pre-tax margin is expected in the -1 to +1% range. Fuel gallons consumed are expected to be $134.6 million in the third quarter. Fuel price per gallon is anticipated in the $3.55-$3.60 range. Effective tax rate is expected to be 21%. Available seat miles are anticipated to increase roughly 14% from third-quarter 2019 actuals.

Currently, Spirit Airlines carries a Zacks Rank #4 (Sell).

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

Performance of Other Transportation Companies

Delta AirLines’ DAL second-quarter 2022 earnings (excluding 29 cents from non-recurring items) of $1.44 per share fell short of the Zacks Consensus Estimate of $1.71. Escalated operating expenses induced the earnings miss. Multiple flight cancellations in May and June also hurt results. The earnings miss disappointed investors, resulting in the stock shedding value in early trading. In the year-ago quarter, Delta incurred a loss of $1.07 per share when air-travel demand was not as buoyant as in the current scenario.

DAL’s revenues came in at $13,824 million, which not only beat the Zacks Consensus Estimate of $13,608.9 million and soared 94% from the year-ago quarter’s figure as air-travel demand rebounded from the pandemic lows. The uptick in air-travel demand in the United States can be gauged from the fact that 75.9% of second-quarter 2022 passenger revenues came from the domestic markets.

J.B. Hunt Transport Services, Inc. JBHTreported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.

JBHT’squarterly earnings of $2.42 per share surpassed the Zacks Consensus Estimate of $1.61 and improved 50.3% year over year.

JBHT’stotal operating revenues of $3,837.53 million also outperformed the Zacks Consensus Estimate of $2,908.37 million. The top line jumped 32% year over year on the back of strength across all segments. JBHT’s total operating revenues, excluding fuel surcharges, rose 21.2% year over year.

CSX Corporation (CSX)reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.

CSX’s quarterly earnings of 50 cents per share (excluding 4 cents from non-recurring items) beat the Zacks Consensus Estimate of 47 cents and improved 25% year over year.

CSX’s total revenues of $3,815 million outperformed the Zacks Consensus Estimate of $2,990 million. The top line increased 28% year over year on the back of higher revenues in almost all markets, driven by pricing gains, fuel surcharge, and contribution from the acquisition of Quality Carriers. CSX’s overall revenues per unit increased 27%.

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