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Allegiant (ALGT) Q3 Earnings Miss Estimates, Increase Y/Y

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·4 min read
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Allegiant Travel Company ALGT reported third-quarter 2021 earnings (excluding $1.52 from non-recurring items) of 66 cents per share, missing the Zacks Consensus Estimate of 70 cents per share. However, the bottom line surged more than 100% on a year-over-year basis. Sentiments regarding air-travel demand are bullish now (due to increased inoculation programs) compared with the year-ago quarter, when the company reported a loss of $4.28 per share.

Operating revenues of $459.5 million beat the Zacks Consensus Estimate of $446.1 million and increased more than 100% on a year-over-year basis.

Allegiant Travel Company Price, Consensus and EPS Surprise

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

Passenger revenues, which accounted for a bulk (92.2%) of the top line, surged more than 100% on a year-over-year basis. The upside can be attributed to an improvement in air-travel demand.

Air traffic (measured in revenue passenger miles or RPMs) for scheduled service surged 92.6% in the quarter under review. Capacity (measured in available seat miles or ASMs) also increased 25% year over year. Consequently, load factor (percentage of seats filled by passengers) widened 2690 basis points to 76.6% in the reported quarter, as traffic surge outweighed capacity expansion.

Operating cost per available seat miles (CASM), excluding fuel, increased 20.2% year over year. Average fuel cost per gallon (scheduled) surged 66.7% to $2.20 in the quarter. Total scheduled service passenger revenue per available seat miles (TRASM) rose 85.7% to 10.4 cents. The carrier exited the quarter with a fleet size of 106. The same is expected to total 108 by the year-end.

Liquidity

As of Sep 30, 2021, Allegiant Travel’s total unrestricted cash and investments totaled $1,070.9 million compared with $685.3 million at the end of December 2020. Long-term debt and finance lease obligations (net of current maturities and related costs) came in at $1,434.6 million compared with $1,441.8 million reported at the end of 2020.

Q4 Expectations

For the fourth quarter, ASM (for scheduled service) is expected to increase 12-16% from fourth-quarter 2019 figures.

Total system ASM are expected to surge 10-14% from fourth-quarter 2019 figures.

Total operating revenues are expected to move up 0.5-4% from fourth-quarter 2019 actuals.

Fuel cost per gallon is expected to be at $2.55.

2021 Expectations

For 2021, the projection for aircraft, engines and induction costs is unchanged from the previous expectation of $115-$125 million.

The view for capitalized airbus deferred heavy maintenance is unchanged from the prior view of $50-$60 million.

Other airline capital expenditures are now expected between $60 million and $70 million (previous expectation: $40 million and $50 million).

Interest expenses are still expected in the range of $65-$70 million.

Project spending (Sunseeker Resorts Project) for 2021 is expected to be $50-$55 million.

Zacks Rank

Allegiant Travel currently carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Sectorial Snapshot

Within the broader Transportation sector, Delta Air Lines DAL, J.B. Hunt Transport Services JBHT and Kansas City Southern KSU recently reported third-quarter 2021 results.

Delta reported third-quarter earnings (excluding $1.59 from non-recurring items) of 30 cents per share, outpacing the Zacks Consensus Estimate of 15 cents. Revenues of $9,154 million beat the Zacks Consensus Estimate of $8,370.6 million.

J.B. Hunt reported third-quarter earnings of $1.88 per share, surpassing the Zacks Consensus Estimate of $1.77. Total operating revenues of $3144.8 million outperformed the Zacks Consensus Estimate of $3002.1 million.

Kansas City Southern reported third-quarter earnings (excluding 31 cents from non-recurring items) of $2.02 per share, missing the Zacks Consensus Estimate of $2.07. Quarterly revenues of $744 million surpassed the Zacks Consensus Estimate of $725.9 million.


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