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It has been about a month since the last earnings report for Hawaiian Holdings (HA). Shares have lost about 3.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Hawaiian Holdings due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Narrower-Than-Expected Loss in Q2
Hawaiian Holdings’ loss (excluding $1.32 from non-recurring items) of $1.44 per share was narrower than the Zacks Consensus Estimate of a loss of $1.79 and the year-ago loss of $3.81. Quarterly revenues of $410.8 million skyrocketed 584.6% year over year and beat the Zacks Consensus Estimate of $393.3 million.
Passenger revenues (contributing 86.7% to the top line) surged to $356.3 million from a mere $29.8 million a year ago as more people took to the skies following the ramp-up in vaccination. Airline traffic, measured in revenue passenger miles, surged in excess of 800% year over year to 1,723 million in the quarter under review. Capacity (measured in available seat miles) expanded even more to 3,546 million as the airline increases the same to meet the uptick in demand. Load factor expanded 54.8 percentage points to 78%. Passenger revenue per ASM (PRASM) ascended 38.2% to 10.05 cents. Average fuel cost per gallon (economic) rose to $1.89 from $1.26 a year-ago.
For the September quarter, capacity is anticipated to drop 20-23% from the third-quarter 2019 levels. Total revenues are anticipated to plunge 28-33% from the third-quarter 2019 actuals. Operating expenses (excluding non-recurring items) are expected to decline 10-14% from the third-quarter 2019 levels. Interest expense is expected to be at $30 million in the September quarter. Adjusted EBITDA is expected between -$20 and $20 million in the third quarter of 2021. Effective tax rate and fuel cost per gallon are anticipated to be 21% and $2.04, respectively, in the third quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -79.55% due to these changes.
At this time, Hawaiian Holdings has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Hawaiian Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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