Spirit Airlines, Inc .'s SAVE second-quarter earnings per share (excluding 95 cents from non-recurring items) came in at $1.11, ahead of the Zacks Consensus Estimate of $1.09. The bottom line however, dipped 2.6% year over year on high costs.
The earnings beat pleased investors. Consequently, shares of the company gained more than 3% since the earnings release.
The carrier recorded revenues of $851.8 million, in line with the Zacks Consensus Estimate. Meanwhile, the top line improved around 21% year over year owing to 18.9% expansion in flight volume.
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) declined 6.8%. This key metric was hurt by an increase in average stage length and a shift in the timing of Easter.
Total revenue passenger miles (RPMs) registered a rise of 28% in the reported quarter while available seat miles (ASMs) surged 30.5% year over year. Consequently, the load factor (percentage of seats filled by passengers) contracted 160 basis points to 83.7%.
Total operating expenses rose 30.7% to $743.25 million in the quarter under review, primarily due to 39.8% rise in average economic fuel cost per gallon ($2.32). Besides fuel costs, salaries, wages and other benefits soared 44.5%. Unit costs (excluding fuel and special items) decreased 11.3%.
The company expects total revenue per available seat mile (TRASM) to increase in the range of 2-3% during the third quarter. The view includes a 170-basis point negativity from a 3.4% increase in average stage length as well as other adversities. Additionally, the airline anticipates a capacity expansion of 24.5% in the same period. Meanwhile, unit costs (excluding fuel and special items) are estimated to decline 3-4%. Economic fuel cost is projected to be $2.33 per gallon. Moreover, an effective tax rate of 24% is forecast in the time frame.
For the full year, this Zacks Rank #3 (Hold) company expects unit costs (excluding fuel and special items) to decrease in the 3.5-4% band year over year. Capacity in the year is forecast to climb approximately 22.7% while effective tax rate is projected to be 24%. Capital expenditures are estimated to be $1.02 billion in the period. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Investors interested in the broader Transportation sector are keenly awaiting second-quarter earnings reports from key players, namely C.H. Robinson Worldwide, Inc. CHRW , Expeditors International of Washington, Inc. EXPD and Air Lease Corporation AL . While C.H. Robinson will report second-quarter earnings on Jul 31, Expeditors and Air Lease will release the same on Aug 7 and Aug 9, respectively.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>
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 reportSpirit Airlines, Inc. (SAVE): Free Stock Analysis ReportAir Lease Corporation (AL): Free Stock Analysis ReportC.H. Robinson Worldwide, Inc. (CHRW): Free Stock Analysis ReportExpeditors International of Washington, Inc. (EXPD): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research