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Virgin America (VA) Beats on Q1 Earnings, Revenues - Analyst Blog

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Virgin America 's VA first-quarter 2015 adjusted earnings of 24 cents per share substantially beat the Zacks Consensus Estimate of 14 cents. The California-based low-cost airline, partly owned by British billionaire investor Richard Branson, went public in Nov 2014.

Operating revenues came in at $326.4 million surpassing the Zacks Consensus Estimate of $322 million. Revenues improved 4.1% from the year-ago figure. Passenger revenues contributed the bulk (88.7%) of the total revenue and were up 4.1% from the year-ago figure. Other revenues, up 4.6%, accounted for the balance.

During the first quarter of 2015, passenger revenue per available seat mile (PRASM) climbed 2.6% to 10.27 cents on the back of a 90 basis point-increase in load factor (% of seats filled) to 80.1%. Yield per passenger mile improved to 12.82 cents from 12.64 cents a year ago. Revenue per available seat mile (RASM) improved 2.7% during the reported quarter to 11.58 cents

Capacity climbed 1.5% during the first quarter of 2015. Cost per available seat mile (excluding special items, fuel costs and profit sharing) rose 3% to 7.82 cents. Fuel cost per gallon (excluding special items) declined 22.7% during the quarter to $2.45.

Guidance

The carrier expects capacity to decrease in the range of 0% to 1% in the second quarter of 2015 on a year-over-year basis. Moreover, the company projects PRASM (a measure of unit revenue) to decrease in the band of 0% to 2% in the second quarter of 2015.

The carrier expects economic fuel cost (inclusive of related taxes and hedge costs) to average between $2.10 and $2.20 per gallon in the second quarter. Cost per available seat mile (excluding fuel and profit sharing) is projected to increase in the band of 7% to 9% in 2015 on a year-over-year basis. The metric is expected to be flat in 2016.

Zacks Rank

Currently, Virgin America has a Zacks Rank #3 (Hold). Better-ranked stocks in the transportation space are Hawaiian Holdings Inc. HA , JetBlue Airways JBLU and Saia, Inc. SAIA . Both stocks carry a Zacks Rank #2 (Buy).

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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.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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