Is Spirit Airlines (SAVE) Poised to Beat Earnings Estimates? - Analyst Blog

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Spirit Airlines, Inc. ( SAVE ) is slated to report second-quarter 2014 financial numbers on July 29, 2014, before the opening bell.

In the previous quarter, Spirit Airlines reported a 60.06% positive earnings surprise. Moreover, the company has comfortably surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average earnings surprise of 9.92%. Let's see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Spirit Airlines reported healthy revenue passenger miles (RPMs) numbers in the months of April, May and June. The company generated RPMs of 1.2 billion in June, up 16.9% from the same month in 2013; 1.18 billion in May, up 18.7% from May 2013; and 1.1 billion in April, up 23.8% from April 2013. Therefore, the company should report strong top line results in the second quarter. 

However, a constant rise in international capacity as against demand is a concern. Further, high jet fuel prices could weigh on the profits of the company in the upcoming quarter.

Earnings Whispers?

Our proven model does not conclusively show that Spirit Airlines is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.

Zero Zacks ESP: This is because both the Most Accurate estimate and the Zacks Consensus Estimate are poised at 88 cents. This leads to an ESP of 0.00% for Spirit Airlines.

Zacks Rank: Spirit Airlines has a Zacks Rank #2 which when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.

Other Stocks to Consider

Here are some other companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.

Genesee & Wyoming Inc. ( GWR ) has an earnings ESP of +0.89% and carries a Zacks Rank #2.

Expeditors International of Washington Inc. ( EXPD ) has an earnings ESP of +4.26% and carries a Zacks Rank #2.

GOL Linhas A ( GOL ) has an earnings ESP of +175.00% and carries a Zacks Rank #3.


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EXPEDITORS INTL (EXPD): Free Stock Analysis Report

GOL LINHAS-ADR (GOL): Free Stock Analysis Report


GENESEE & WYO (GWR): Free Stock Analysis Report

SPIRIT AIRLINES (SAVE): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: EXPD , GOL , GWR , SAVE

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