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The Zacks Analyst Blog Highlights: SkyWest, Allegiant, Ryanair, Delta Air and Southwest

Zacks Equity Research
Mattel (MAT) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

For Immediate Release

Chicago, IL –February 6, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: SkyWest SKYW, Allegiant Travel Company ALGT, Ryanair Holdings RYAAY, Delta Air Lines DAL and Southwest Airlines LUV.

Here are highlights from Tuesday’s Analyst Blog:

Airline Stock Roundup: DAL, LUV, RYAAY & More

In the past week, key players like SkyWest and Allegiant Travel Company released their respective fourth-quarter 2018 financial numbers.

With oil prices declining substantially in the October-December timeframe (the fourth quarter period), it was not surprising that the aforementioned carriers registered better-than-expected earnings. Low fuel costs apart, fleet transition initiatives aided SkyWest’s results. Meanwhile, robust passenger revenues provided a boost to Allegiant’s fourth-quarter performance.

However, European low-cost carrier Ryanair Holdings reported lackluster results for the third quarter of fiscal 2019 (ended Dec 31, 2018) due to declining air fares.

On the non-earnings front, Delta Air Lines’ January traffic report failed to impress investors as load factor (% of seats filled by passengers) was flat with traffic growth matching capacity expansion. An expansion-related updated was also available from Southwest Airlines in the past week.

(Read the last Airline Stock Roundup for Jan 30, 2019)

Recap of the Past Week’s Most Important Stories

1. SkyWest’s fourth-quarter 2018 earnings of $1.28 per share, surpassed the Zacks Consensus Estimate of $1.09. Also, the bottom line improved 58% on a year-over-year basis.

Quarterly revenues came in at $803.5 million, which exceeded the Zacks Consensus Estimate of $789.6 million and improved year over year on the company’s improved fleet mix. (Read more: SkyWest Q4 Earnings & Revenues Top on Fleet Upgrade).

SkyWest carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

2. Allegiant’s fourth-quarter 2018 earnings of $2.56 per share outpaced the Zacks Consensus Estimate of $2.49. Total operating revenues increased 8.7% year over year to $412.1 million and also surpassed the consensus mark of $409.1 million. The top line was primarily driven by a 10.1% rise in passenger revenues. (Read more: Allegiant Stock Up 3% on Q4 Earnings & Revenue Beat).

3. Ryanair suffered a loss of €19.6 million in the third quarter of fiscal 2019 compared to a profit of €105.6 million a year-ago. Results were hurt by a 6% decline average fares to €30. Excess winter capacity in Europe led to the decline. What is worse is that the carrier stated fares may continue to decrease due to overcapacity.

High costs too impacted the company’s results. The top line, however, expanded 9% to €1.53 billion on the back of an 8% rise in traffic to 33 million. In the meantime, load factor was flat at 96%. Ryanair still expects fiscal 2019 profit after tax in the €1-€1.1 billion range. Winter fares are still anticipated to decline 7% year over year. The company said that it might lower its fiscal 2019 profit forecast further in the event of “unexpected Brexit or security developments which adversely impact yields between now and the end of March.”

In another development, Ryanair announced a structural overhaul. The carrier announced that it is moving to a group structure with each group having its own CEO and management team. Ryanair’s current CEO Michael O'Leary will be the group’s CEO. He has inked a five-year contract to this effect.

Ryanair’s January traffic was impressive, with the metric (including 0.3 million from its Lauda Motion unit) increasing 11% year over year to 10.3 million. However, load factor remained unaltered at 91%.

4. Southwest Airlines announced a package of new seasonal services and subsequently extended its flight schedule through Oct 1, 2019. Additionally, the carrier has announced the resumption of a few previously-operated seasonal services. The airline will initiate a non-stop Saturday service between Dallas Love Field and Corpus Christi, beginning Aug 10, 2019. (Read more: Southwest to Launch Seasonal Services This August).

5. At Delta, consolidated traffic — measured in revenue passenger miles (RPMs) — came in at 16.56 billion, up 5.9% year over year. Consolidated capacity (or available seat miles/ASMs) also climbed 5.9% to 20.79 billion on a year-over-year basis. As a result, consolidated load factor remained flat at 79.7%.

Additionally, the company recorded an on-time performance (mainline) of 86.7% and a completion factor (mainline) of 99.6%. Notably, Delta’s passenger count inched up 6.2% to around 14.1 million in January.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Allegiant Travel Company (ALGT) : Free Stock Analysis Report
 
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Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report
 
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