Airline Stock Roundup: DAL & UAL's Q3 Earnings Beat, ALGT's Expansion Update
In the past week, sector heavyweights like Delta Air Lines DAL and United Airlines UAL reported earnings for third-quarter 2023. Results were aided by upbeat air travel demand. However, high costs hurt results.
Despite the earnings beat, shares of DAL and UAL fell due to tepid outlooks on fuel price increase. An expansion update was also available at Allegiant Travel Company ALGT in the past week.
Read the last Airline Roundup here.
Recap of the Past Week’s Most Important Stories
1. Delta reported third-quarter 2023 earnings (excluding 31 cents from non-recurring items) of $2.03 per share, which comfortably beat the Zacks Consensus Estimate of $1.92 and improved 35% on a year-over-year basis. Revenues of $15,488 million beat the Zacks Consensus Estimate of $15,290.4 million and increased 11% on a year-over-year basis, driven by higher air travel demand.
Management expects fourth-quarter 2023 earnings in the range of $1.05-$1.30 per share. DAL, currently carrying a Zacks Rank #5 (Strong Sell), now anticipates 2023 adjusted earnings in the range of $6.00-$6.25 per share (prior view: $6-$7).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2. United Airlines reported third-quarter 2023 earnings per share (excluding 23 cents from non-recurring items) of $3.65, which outpaced the Zacks Consensus Estimate of $3.40 and improved 29.9% year over year. Operating revenues of $14,484 million beat the Zacks Consensus Estimate of $14,441.8 million.
If flights to Tel Aviv remain suspended for October only, earnings in the fourth quarter are expected to be $1.80. However, if flights to Tel Aviv remain suspended through year-end, fourth-quarter earnings are expected to be $1.50 per share.
3. Allegiant announced that it would relocate its Nashville International Airport's operations from Concourse B to the brand-new Satellite Concourse in a bid to expand its operations at the airport.
The carrier will begin operations at the C Gate Satellite Concourse on Oct 21. This is a customer-friendly move. Following the expansion, passengers will be able to board and deplane in a new state-of-the-art facility, which will boost their overall travel experience.
Price Performance
The following table shows the price movement of the major airline players over the past week and during the past six months.
Image Source: Zacks Investment Research
The table above shows that most airline stocks traded in the red in the past week. As a result, the NYSE ARCA Airline Index declined 3.9% over the period to $49.59. Over the course of the past six months, the sector tracker declined 15%.
What's Next in the Airline Space?
Southwest Airlines LUV is scheduled to report its third-quarter earnings on Oct 26. While passenger revenues are likely to have been impressive, high costs are to have dented the bottom-line performance in the to-be-reported quarter.
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Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
Southwest Airlines Co. (LUV) : Free Stock Analysis Report
Allegiant Travel Company (ALGT) : Free Stock Analysis Report
