U.S. low cost carrier
Spirit Airlines Co.
) reported first quarter earnings of 52 cents per share, in line
with the Zacks Consensus Estimate. Earnings however, surged 15.6%
from 45 cents in the prior-year quarter. The company's in line
performance failed to encourage shareholders, pulling the stock
price down by almost 3% on Tuesday trade on Nasdaq.
Quarterly revenues moved up 18.2% year over year to $438.0
million but missed the Zacks Consensus Estimate of $440.0
million. On a year-over-year basis, Passenger revenues increased
16.0% while Non-Ticket revenues increased 21.5%. Improvement in
flight volume impacted the results positively. However, during
the quarter, the company had to cancel 256 flights owing to
Revenue passenger miles moved up 23.6% year over year to 3.29
billion in the first quarter. Capacity or available seat miles
increased 21.0% year over year to 3.78 billion, while load factor
(percentage of seats filled with passengers) leaped 180 basis
points year over year to 86.9%. Revenue per available seat mile
(RASM) increased 2.4% year over year to 11.57 cents.
Operating Expenses & Operating Income
For the first quarter, operating income increased to $56.95
million from $49.67 million in the year-ago quarter. Total
operating expenses increased 17.9% year over year to $378.0
million. Average fuel price (economic) was $3.18 per gallon, down
4.2% from $3.32 in the year-ago quarter. Consolidated unit cost
or cost per available seat mile (CASM), excluding fuel and
special items, increased 0.3%.
At the end of the first quarter, Spirit had $544.0 million in
unrestricted cash and cash equivalents and no debt in its balance
sheet. Spirit generated operating cash flow of $90.64 million and
capital expenditures were $4.1 million in the quarter. The
carrier also paid $73.2 million in pre-delivery deposits for
future deliveries of aircraft. The company took delivery of 2 new
Airbus A-320 aircraft, taking its total fleet count to 56
aircraft at quarter end.
In the first quarter, return on invested capital (before taxes
and excluding special items) was 31.2%.
Other Airline Releases
Delta Air Lines Inc.
) reported first-quarter 2014 adjusted earnings of 33 cents,
beating the Zacks Consensus Estimate of 29 cents, while
Southwest Airline Co.
) earnings of 18 cents was also ahead of our estimate of 16
United Continental Holdings Inc.
) posted a loss of $1.33 per share, narrower than the Zacks
Consensus Estimate of a loss of $1.38.
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.
However, increase in operating expenses remains a near-term
Spirit Airlines currently holds a Zacks Rank #3, implying a
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