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Hawaiian Holdings (HA) Q2 Earnings Beat, Q3 RASM View Dull

Zacks Equity Research

Hawaiian Holdings, Inc.’s HA second-quarter 2019 earnings (excluding 2 cents from non-recurring items) of $1.23 per share outpaced the Zacks Consensus Estimate of $1.04. However, the bottom line declined 14.6% year over year. Although quarterly revenues of $712.2 million surpassed the Zacks Consensus Estimate of $707.5 million, it dipped marginally year over year.

Passenger revenues accounting for bulk (91.7%) of the top line slipped 0.3% year over year. Airline traffic, measured in revenue passenger miles, inched up 3.6% year over year to 4.49 billion in the quarter under review. Capacity or available seat miles (ASMs) expanded 2.7% to 5.15 billion. Load factor (percentage of seats filled by passengers) improved 80 basis points to 87.1% in the reported quarter as traffic growth outpaced capacity expansion.

Meanwhile, operating revenue per available seat mile (RASM: a key measure of unit revenue) in the quarter slid 3.1% year over year. Average fuel cost per gallon rose 3.4% to $2.14 in the second quarter while non-fuel unit costs inched up 0.3%.

During the quarter, Hawaiian Holdings returned $25.3 million to shareholders through $5.7 million in dividends and $19.6 million in buybacks.

Hawaiian Holdings, Inc. Price, Consensus and EPS Surprise


Hawaiian Holdings, Inc. Price, Consensus and EPS Surprise

Hawaiian Holdings, Inc. price-consensus-eps-surprise-chart | Hawaiian Holdings, Inc. Quote


As of Jun 30, 2019, this Zacks Rank #2 (Buy) company’s unrestricted cash, cash equivalents and short-term investments totaled $539 million. While outstanding debt and capital lease obligations were $565 million during the same time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dividend Update

On Jul 19, the company’s board cleared a quarterly cash dividend of 12 cents per share, payable Aug 30 to shareholders of record as of Aug 16.

Q3 & 2019 Outlook

The company anticipates capacity to decrease up to 1.5% or increase up to 0.5% in the third quarter. RASM is projected to decline 1.5-4.5% in the current quarter. Non-fuel unit costs are expected to ascend 3.5-6.5% in the ongoing quarter. Economic fuel costs are envisioned to be $2.11 per gallon in the same period.

Capacity for the full year is expected to rise in the 1.5-2.5% band. Non-fuel unit costs are predicted to increase 1-2.5% in the current year. Additionally, fuel costs are estimated at $2.07 per gallon in 2019.

Upcoming Releases

Investors interested in the broader Transportation sector are keenly awaiting second-quarter earnings reports from key players, namely Expeditors International of Washington, Inc. EXPD, Air Lease Corporation AL and Hertz Global Holdings, Inc HTZ. While Expeditors and Hertz will report earnings figures on Aug 6, Air Lease will announce the same on Aug 8.

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