Spirit Airlines (SAVE) Up on Q3 Earnings & Revenues Beat

Shares of Spirit Airlines SAVE have performed well of late. The stock has moved up 9.7% compared with its industry’s gain of 0.7% in a month.

 

 

The carrier performed impressively in the third quarter of 2017, despite disruptions caused by the recent hurricanes. Evidently, shares of this low-cost carrier have been on an uptrend, ever since its earnings release on Oct 26. This can be made out from the fact that the stock has gained 9.4% so far since its third-quarter outperformance.

Spirit Airlines’third-quarter earnings (excluding 7 cents from non-recurring items) came in at 94 cents per share, beating the Zacks Consensus Estimate of 90 cents. The bottom line however, plunged 24.2% on a year-over-year basis.

Spirit Airlines reported operating revenues of $687.2 million, marginally ahead of the Zacks Consensus Estimate $686.6 million. The top line improved 10.6% year over year owing to a 14% rise in non-ticket revenues.

In the reported quarter, total revenue per available seat mile decreased 6.3% due to low passenger yields from aggressive pricing action.Load factor (percentage of seats filled by passengers) decreased to 84% from 86% in the year-ago quarter. Load factor fell as traffic growth (15.2%) was outpaced by capacity expansion (18%) during the reported quarter.

Cost per available seat mile (CASM), excluding special items, and fuel slipped 1.1% on the back of lower maintenance and salaries, wages and benefits per available seat mile. Adjusted operating expense in the third quarter climbed 20.2% to $574.75 million.

The company’s board has recently authorized a share repurchase program worth up to $100 million in aggregate value. The date of expiration of the authorization is Oct 25, 2018.

Spirit Airlines, Inc. Price, Consensus and EPS Surprise

 

Spirit Airlines, Inc. Price, Consensus and EPS Surprise | Spirit Airlines, Inc. Quote

Q417 Guidance

The company expects capacity (available seat miles) to expand 17.5% year over year in the fourth quarter. Total revenue per available seat mile (TRASM) is expected to decline in the range of 4-6% in the fourth quarter. While Adjusted CASM ex-fuel is estimated to be down 3-4% in the final quarter of 2017.

2018 Guidance

For full-year 2018, the carrier expects capacity to rise between 22% and 25% year over year. While Adjusted CASM ex-fuel is predicted to be down in the band of 3-5%.

Zacks Rank & Key Picks

Spirit Airlines currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the airline space are Deutsche Lufthansa AG DLAKY, International Consolidated Airlines Group SA ICAGY and Cathay Pacific Airways Ltd. CPCAY. While Deutsche Lufthansa and International Consolidated Airlines sport a Zacks Rank #1 (Strong Buy), Cathay Pacific Airways carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Deutsche Lufthansa, International Consolidated Airlines and Cathay Pacific Airways have risen 11.9%, 4.5% and 11.2% over a month.

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Spirit Airlines, Inc. (SAVE) : Free Stock Analysis Report
 
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