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What's in Store for Hawaiian Holdings' (HA) Q2 Earnings?

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Zacks Equity Research
·4 min read
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Hawaiian Holdings HA is scheduled to report second-quarter 2020 results on Jul 28, after market close.

The Zacks Consensus Estimate for second-quarter bottom line has been narrowed from a loss of $3.84 per share to $3.72 loss in the past 60 days. Moreover, the company has an impressive surprise history. Its bottom line outperformed the Zacks Consensus Estimate in each of the last four quarters, the average being nearly 15%.

Hawaiian Holdings, Inc. Price and EPS Surprise

Hawaiian Holdings, Inc. Price and EPS Surprise
Hawaiian Holdings, Inc. Price and EPS Surprise

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

Against this backdrop, let’s discuss the factors that are likely to have influenced the carrier’s June-quarter performance.

Hawaiian Holdings’ top line is expected to have been hurt by a significant decline in passenger revenues due to coronavirus-induced weak demand for air travel. The Zacks Consensus Estimate for second-quarter passenger revenues indicates a steep 94.7% fall from the figure reported. in the sequential quarter.

To match the extremely low-demand scenario, Hawaiian Holdings reduced capacity in the April- June period. The Zacks Consensus Estimate for second-quarter capacity (measured in available seat miles) suggests a 90.7% plunge from the figure reported in first-quarter 2020. Another key metric, load factor (% of seats filled by passengers), is also expected to have depreciated as the decrease in traffic is wider than the capacity contraction. The Zacks Consensus Estimate for second-quarter load factor implies a massive drop to 50% from 75% reported in the March quarter.

However, modest fuel prices are likely to have supported the bottom line in the to-be-reported quarter. With a significant portion of the fleet remaining grounded or under-utilized due to the coronavirus-triggered pent-up demand scenario, the carrier’s fuel gallon consumption is likely to have dwindled in the June quarter, thereby curbing fuel expenditure. This, in turn, might have boosted the airline’s bottom-line performance. Notably, the consensus mark for expenses on aircraft fuel (including taxes and delivery) is indicative of a 95.2% plummet from the sequentially reported figure. Moreover, the Zacks Consensus Estimate for fuel gallons consumed (on a consolidated basis) hints at a 90.7% slump from the figure reported in the January-March period.

What Does the Zacks Model Unveil?

The proven Zacks model predicts a bottom-line outperformance for Hawaiian Holdings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Hawaiian Holdings has an Earnings ESP of +27.51% as the Most Accurate Estimate is pegged at a loss of $2.70 while the Zacks Consensus Estimate is pinned at a loss of $3.72 You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Hawaiian Holdings carries a Zacks Rank #3, currently.

Highlights of Q1

Hawaiian Holdings’ first-quarter 2020 loss (excluding $2.40 from non-recurring items) of $1 per share was wider than the Zacks Consensus Estimate of a loss of 74 cents. However, the carrier delivered earnings of 67 cents in first-quarter 2019. Meanwhile, quarterly revenues of $559.1 million missed the Zacks Consensus Estimate of $564 million and the top line also declined 14.9% year over year.

Other Stocks to Consider

Investors interested in the broader Transportation sector may check out a few other stocks worth considering like Allegiant Travel Company ALGT, JetBlue Airways JBLU and Expeditors International of Washington EXPD as these too possess the perfect combination of elements to beat estimates this earnings season.

Allegiant Travel has an Earnings ESP of +23.25% and a Zacks Rank of 3, currently. This company is set to release second-quarter financial numbers on Jul 29.

JetBlue presently has an Earnings ESP of +12.37% and is a #3 Ranked player. The company will release second-quarter 2020 results on Jul 28.

Expeditors has an Earnings ESP of +6.87% and is Zacks #3 Ranked at present. The company will release second-quarter 2020 results on Aug 4

Zacks Top 10 Stocks for 2020

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JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report
 
Expeditors International of Washington, Inc. (EXPD) : Free Stock Analysis Report
 
Allegiant Travel Company (ALGT) : Free Stock Analysis Report
 
Hawaiian Holdings, Inc. (HA) : Free Stock Analysis Report
 
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