Spirit Airlines (SAVE) Up on Q3 Earnings & Revenue Beat

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Spirit Airlines, Inc .'s SAVE third-quarter 2018 earnings per share (excluding 5 cents from non-recurring items) came in at $1.47, ahead of the Zacks Consensus Estimate of $1.39. Moreover, the bottom line soared 56.4% year over year.

The carrier recorded revenues of $904.3 million, marginally beating the Zacks Consensus Estimate of $904.1 million.  Also, the top line improved 31.6% year over year owing to 24.6% and 3% rise in passenger segments and operating yields, respectively.

The company's impressive performance pleased investors. As a result, shares of the company have rallied more than 11% since its earnings release.

Spirit Airlines, Inc. Price, Consensus and EPS Surprise

Spirit Airlines, Inc. Price, Consensus and EPS Surprise | Spirit Airlines, Inc. Quote

Total revenue per available seat miles (a key measure of unit revenues) increased 5.5%. Total revenue passenger miles (RPMs) registered a rise of 27.7% in the reported quarter while available seat miles (ASMs) expanded 24.7% year over year. Consequently, the load factor (percentage of seats filled by passengers) climbed 200 basis points to 86%.

Total operating expenses surged 30.1% to $759.21 million in the quarter under review, primarily due to a 34.9% rise in average economic fuel cost per gallon ($2.36). Besides fuel costs, salaries, wages and other benefits increased 38%. Unit costs (excluding fuel and special items) decreased 3.7% as a result of better operational performance among other factors.

Q4 Outlook

The company expects total revenue per available seat mile (TRASM) to increase approximately 6% year over year during the fourth quarter. Additionally, the airline anticipates capacity to expand 15% year over year in the same period. Meanwhile, unit costs (excluding fuel and special items) are estimated to rise 5-6% year over year in the final quarter of 2018, mainly due to higher labor costs. The metric was down 4.4% in the year-ago period. Economic fuel cost is projected to be $2.46 per gallon. Moreover, an effective tax rate of 24% is envisioned during the same time frame.

2018 Outlook

For the full year, this Zacks Rank #3 (Hold) company continues to expect unit costs (excluding fuel and special items) to decrease in the 3.5-4% band year over year. Capital expenditures are estimated to be $1 billion. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Upcoming Releases

Investors interested in the broader Zacks Transportation sector are keenly awaiting third-quarter earnings reports from key players like SkyWest, Inc. SKYW , C.H. Robinson Worldwide, Inc. CHRW and Triton International Limited TRTN . While SkyWest and C.H. Robinson will report third-quarter earnings on Oct 30, Triton International will release the same on Nov 2.

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Spirit Airlines, Inc. (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 Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: SAVE , SKYW , TRTN , CHRW

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