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.
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.
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 .
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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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report SkyWest, Inc. (SKYW): Free Stock Analysis Report Triton International Limited (TRTN): Free Stock Analysis Report C.H. Robinson Worldwide, Inc. (CHRW): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research