Allegiant (ALGT) Barely Moves Since Q3 Earnings Miss Estimates
Allegiant Travel Company ALGT reported third-quarter 2023 earnings (excluding $1.53 from non-recurring items) of 9 cents per share, which fell short of the Zacks Consensus Estimate of 13 cents but surged more than 100% year over year. Operating revenues of $565.4 million also lagged the Zacks Consensus Estimate of $583.7 million but increased marginally on a year-over-year basis. Due to the earnings and revenue miss, the stock barely showed any movement since Nov 2.
Passenger revenues, which accounted for the bulk (91.3%) of the top line, have remained flat on a year-over-year basis. We estimated a rise of 6.5% from third-quarter 2022 figures.
Air traffic (measured in revenue passenger miles) for scheduled service fell 2% year over year in the quarter under review. We suggested an improvement of 12.1% from third-quarter 2022 levels.
Capacity (measured in available seat miles or ASMs) declined marginally from the year-ago number. We anticipated 5.7% growth from third-quarter 2022 actuals. Load factor (percentage of seats filled by passengers) inched down from 88.5% to 87.5% in the reported quarter, as traffic plunge outweighed capacity contraction.
Operating cost per available seat miles, excluding fuel, jumped 13.9% year over year to 8.83 cents. Average fuel cost per gallon (scheduled) decreased 19.7% to $3.09. Total scheduled service passenger revenue per available seat miles improved to 12.78 cents from 12.60 cents a year ago.
Allegiant Travel Company Price, Consensus and EPS Surprise
Allegiant Travel Company price-consensus-eps-surprise-chart | Allegiant Travel Company Quote
Liquidity
As of Sep 30, 2023, Allegiant’s total unrestricted cash and investments were $1,007 million compared with $1,018.4 million at the end of December 2022. Long-term debt and finance lease obligations (net of current maturities and related costs) totaled $2,020 million compared with $1,944.1 million at 2022 end. Debt, net of unrestricted cash and investments, was $1,279 million compared with $1,078.6 million at 2022 end.
2023 Expectations
ASM (for scheduled service) is now expected to increase by 1.5% (prior view: 0-3%) on a year-over-year basis. Total system ASM is now projected to rise by 1.8% (prior view: 0-3%) on a year-over-year basis.
Earnings per share (airline) are now anticipated in the $7.75-$8.50 (prior view: $10.50 - $13.00) range. Fuel cost per gallon is suggested to be $3.12 (prior view: $2.90).
Interest expenses are still forecast to be in the range of $145-$150 million.
Under Airline capex, aircraft, engines, induction costs and pre-delivery deposits are now expected in the $430-$440 million band (prior view: $490-$500 million). Capitalized deferred heavy maintenance is envisioned to be between $60 million and $70 million. Other airline capital expenditures are now expected to be between $150 million and $155 million (prior view: $140-$145 million).
Total project spending (Sunseeker Resorts Project) for 2023 is expected to be $720 million (prior view: $695 million). The company aims to expand its fleet size to 127 at 2023 end.
Allegiant presently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Transportation Companies
United Airlines UAL 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 outpaced the Zacks Consensus Estimate of $14,441.8 million. The top line increased 12.5% year over year due to upbeat air-travel demand.
J.B. Hunt Transport Services, Inc.’s JBHT third-quarter 2023 earnings per share of $1.80 fell short of the Zacks Consensus Estimate of $1.85 and declined 30% year over year.
Total operating revenues of $3,163.8 million also lagged the Zacks Consensus Estimate of $3,224 million and tumbled 18% year over year.
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