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SkyWest's (SKYW) Q1 Earnings & Revenues Surpass Estimates

Zacks Equity Research

SkyWests SKYW delivered better-than-expected results in the first quarter of 2019. The company’s earnings (on an adjusted basis) of $1.33 per share surpassed the Zacks Consensus Estimate of $1.18. Also, the bottom line improved 29% on a year-over-year basis. Results benefited from the company’s fleet transition initiatives.

Quarterly revenues came in at $724 million, beating the Zacks Consensus Estimate of $707 million. However, the top line declined year over year owing to the sale of ExpressJet Airlines in January 2019.

In fact, SkyWest’s efforts to modernize its fleet and streamline operations are very impressive. The company aims to reduce the 50-seat jets from its fleet and add new E175 aircraft. In fact, this St. George, UT-based carrier reported a 6.2% increase in block hours (a measure of aircraft utilization) during the first quarter of 2019.

Operating expenses declined to 9.8% to $627 million owing to the sale of ExpressJet Airlines. Expenses on salaries, wages and benefits decreased 16% to $257.6 million.

SkyWest, Inc. Price, Consensus and EPS Surprise


SkyWest, Inc. Price, Consensus and EPS Surprise | SkyWest, Inc. Quote

The company, carrying a Zacks Rank #2 (Buy), exited the reported quarter with cash and marketable securities of $544.2 million, down 21% sequentially. Total debt decreased to $2.7 billion from $2.8 billion in at the end of 2018. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We are also pleased by the company’s efforts to reward shareholders. To this end, the company bought back shares worth $25 million.  Out of the $25 million, $21 million was purchased under our new $250 million program approved by the board in February 2019.

Apart from announcing its quarterly results, the company agreed to a multi-year extension with American Airlines AAL on 38 CRJ700 jets.  SkyWest expects to add two used CRJ700 aircraft to the above-mentioned contract in the second quarter under a multi-year term.

Upcoming Releases

Investors interested in the broader Transportation sector are keenly awaiting first-quarter earnings reports from key players, namely C.H. Robinson Worldwide CHRW and Air Lease Corporation AL. While C.H. Robinson will report first-quarter earnings on Apr 30, Air Lease will announce the same on May 9.

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