U.S. low cost carrier
Spirit Airlines Co.
) reported second-quarter 2014 earnings of 91 cents per share,
beating the Zacks Consensus Estimate by a penny. Earnings, however,
surged 44.4% from 63 cents in the prior-year quarter.
Quarterly revenues moved up 22.6% year over year to $499.3
million edging past the Zacks Consensus Estimate of $494 million.
On a year-over-year basis, Passenger revenues increased 25.5% while
Non-Ticket revenues increased 18.4%. Improvement in flight volume,
higher load factor and operating yields impacted results
Revenue passenger miles moved up 19.6% year over year to 3.5
billion in the second quarter. Capacity or available seat miles
increased 17.2% year over year to 4 billion, while load factor
(percentage of seats filled with passengers) leaped 180 basis
points year over year to 87.5%. Revenue per available seat mile
(RASM) increased 4.6% year over year to 12.5 cents. The shift of
Easter from March to April this year yielded the positive
Operating Expenses & Operating Income
For the second quarter, adjusted operating income increased to
$106.3 million from $72.6 million in the year-ago quarter. Total
operating expenses increased 15.7% year over year to $394.2
million. Average fuel price (economic) was $3.13 per gallon, up
3.3% from the year-ago quarter. Consolidated unit cost or cost per
available seat mile (CASM), excluding fuel and special items,
At the end of the second quarter, Spirit Airlines had $567.2
million in unrestricted cash and cash equivalents and zero debt in
its balance sheet. Spirit Airlines generated operating cash flow of
$144.1 million while capital expenditures amounted to $7.4 million
in the quarter. The carrier also paid $94.0 million in pre-delivery
deposits for future deliveries of aircraft. The company took
delivery of one new Airbus A-320 aircraft, taking its total fleet
count to 57 aircraft at quarter-end.
In the last twelve months, return on invested capital (before
taxes and excluding special items) was 32.0%.
Other Airline Releases
Delta Air Lines Inc. (
) reported second-quarter 2014 adjusted earnings of $1.04 per
share, beating the Zacks Consensus Estimate of $1.03, while
Southwest Airline Co.'s (
) earnings of 70 cents also steered ahead of our estimate of 61
cents. Likewise, United Continental Holdings Inc. (
) posted a profit of $2.34 per share, much higher than the Zacks
Consensus Estimate of $2.22.
We believe that the company will benefit from service launch in
several markets along with its focus on delivering low fares to its
valued customers. Additionally, the company has ordered new
aircraft from Airbus, which will enhance customer comfort. Further,
the carrier's initiatives to improve its operational efficiency are
delivering positive results. We thus remain bullish on Spirit
Airlines which currently holds a Zacks Rank #1, implying a Strong
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