A month has gone by since the last earnings report for Hawaiian Holdings (HA). Shares have added about 6.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hawaiian Holdings due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Wider-Than-Expected Loss in Q2
Hawaiian Holdings' second-quarter 2020 loss (excluding $1.48 from non-recurring items) of $3.81 per share was wider than the Zacks Consensus Estimate of a loss of $3.72. Moreover, quarterly revenues of $60 million declined 91.6% year over year and missed the Zacks Consensus Estimate of $61 million.
Thanks to COVID-19 pandemic induced massive drop in travel demand, passenger revenues (contributing 49.6% of the top line) declined 95.4% year over year. Notably, Hawaii enforced a 14-day self-quarantine on passengers flying in for most of the second quarter. Consequently, tourism was virtually non-existent in the April-June period.
Airline traffic, measured in revenue passenger miles, fell 97.9% year over year to 95.1 million in the quarter under review. Capacity (measured in available seat miles) contracted 92.1% to 409.5 million. Load factor (percentage of seats filled by passengers) deteriorated 6390 basis points to 23.2% in the reported quarter as capacity contraction outweighed traffic plunge.
Operating revenue per available seat mile (RASM: a key measure of unit revenues) in the quarter rose 6.1% year over year. Average fuel cost per gallon (economic) dropped 41.1% to $1.26 in the second quarter, while non-fuel unit costs rose more than 100%.
As of June 30, 2020, Hawaiian Holdings’ unrestricted cash, cash equivalents and short-term investments totaled $761 million. Outstanding debt and finance lease obligations were $1,006 million.
Due to COVID-19 pandemic uncertainties, Hawaiian Holdings is unable to provide its detailed guidance for third-quarter 2020.
However, ASM for July 2020 is expected to be approximately 86% below its year-ago period’s capacity. The company expects August 2020 capacity to plunge 85% compared with the year-ago period’s tally. Operating expenses are expected to decline at a slower pace than capacity.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -70.36% due to these changes.
Currently, Hawaiian Holdings has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Hawaiian Holdings has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Hawaiian Holdings, Inc. (HA): 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.