Allegiant Travel Dips 16.6% Despite Q2 Beat

Earnings

โดย Zacks Investment Research·

Summary · why it matters

Allegiant Travel Company shares have plunged 16.6% in the past four weeks even as second-quarter adjusted earnings sharply exceeded expectations and standalone unit revenue reached a quarterly record. The pullback puts the focus on whether better revenue productivity can outweigh volatile fuel costs, Sun Country integration demands, higher debt and continued capacity discipline. Second-quarter adjusted earnings of $2.19 per share increased 78% year over year and beat the Zacks Consensus Estimate of $1.27 by 72.4%, while standalone Allegiant revenues rose 16.1% to a record $776.2 million. Standalone total revenue per available seat mile increased 24.6% to a record 14.42 cents despite a 6.8% capacity reduction. Consolidated passenger revenues increased 33.1% to $822.5 million, third-party product revenues rose 36% to $45.8 million and fixed-fee contract revenues climbed 168.7% to $45.7 million, with Sun Country contributing $167.3 million of consolidated revenues from the May 13 acquisition close through quarter-end. Total operating expenses increased 21.9% to $922.4 million, aircraft fuel expense jumped 85.6% to $307.7 million, and total debt ended June at $2.8 billion. For the third quarter, management expects system capacity to decline about 6.5% year over year and adjusted operating margin between 1% and 3%. ALGT trades at 0.6X forward 12-month sales, in line with its five-year median, and carries a Zacks Rank #3 (Hold) with a Value Score of A, a Growth Score of B, a Momentum Score of F and a VGM Score of B.

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