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Allegiant Shares Up 6.39% on Improved Third-Quarter Outlook
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Shares of Allegiant Travel Company (ALGT - Free Report) performed well on the bourse on Sept. 20, 2024, closing the trading session at $45.81 per share, up 6.39% from the previous day's closing. The upside was owing to the improved third-quarter 2024 guidance revealed by the company on the back of upbeat travel demand.
ALGT now anticipates its third-quarter capacity (measured in available seat miles) for scheduled service to increase 1.6% on a year-over-year basis. This marks an improvement from the prior expectation to increase 1.3%.
Operating margin is now expected to decline in the 0.5-1.5% range, which marks an improvement over the prior forecast to decline in the 4.5-6.5% band.
Loss per share is now anticipated to be in the range of $1.75-$2.25, which marks an improvement from the prior expectation of loss per share of $2.50-$3.50. The Zacks Consensus Estimate is pegged at a loss of $2.65 per share, which is above the updated guidance.
Drew Wells, chief commercial officer of Allegiant, stated, "While we expected the year-over-year unit revenue cadence to improve through the end of the quarter, the environment has certainly outperformed our initial expectations. Although the full month of September will likely be TRASM negative on a year-over-year basis, we now expect the back half of the month to flip positive. Given recent booking improvements coming out of July, we expect third-quarter unit revenues to be down roughly 5.5 percent year-over-year compared with our prior commentary of down 7.5 percent. Although early, holiday bookings are showing signs of strength with both yields and loads performing well against expectations on December capacity increases of 18 percent over 2023."
Declining fuel expenses mark another major positive. Allegiant now anticipates third-quarter 2024 fuel cost per gallon to be $2.70, down from the prior view of $2.80. Lower fuel costs should boost the company’s bottom line, as fuel expenses represent a key input cost for any transportation player.
Non-fuel unit costs are expected to be up almost 4.5% on a year-over-year basis. This marks an improvement of 2.5 points from the prior view of increasing 7%. The uptick was owing to the CrowdStrike (CRWD - Free Report) -induced disruptions across the industry and a better-than-expected completion factor during the quarter. The global technology outage on July 19, caused by security software provider CrowdStrike’s software update, has hit some of the major U.S. airlines, leading to multiple flight cancelations. ALGT reaped the benefits from the troubles of its competitors’ flight cancelations.
Given this encouraging outlook, we are keenly waiting for the company’s upcoming third-quarter earnings release.
Shares of ALGT have plunged 44.6% so far this year against 24.1% growth of the Zacks Airline industry.
YTD Price Comparison
Image Source: Zacks Investment Research
Updated Guidance of Other Transportation Companies
Alaska Air Group, Inc. (ALK - Free Report) raises its third-quarter 2024 adjusted earnings per share guidance to the range of $2.15-$2.25 from the previously guided range of $1.40 to $1.60. Improved revenue and fuel cost outlook have led to the encouraging earnings per share (EPS) forecast.
Alaska Air has witnessed upbeat air travel demand during the summer season, offering hassle-free service for guests with a 99.3% completion rate quarter-to-date. Backed by the upbeat demand, Alaska Air now expects its third-quarter 2024 revenue per available seat mile (a key measure of unit revenues) to be up 2% on a year-over-year basis, an improvement from the previous forecast of flat to positive.
ALK continues to expect third-quarter capacity (measured in available seat miles) to increase in the range of 2-3% on a year-over-year basis.
Declining fuel expenses (owing to the moderating crude oil and West Coast refining margins) mark another major positive. ALK now anticipates third-quarter 2024 economic fuel cost per gallon in the range of $2.60-$2.70 (prior view: $2.85-$2.95). Lower fuel costs should boost the company’s bottom line, as fuel expenses represent a key input cost for any transportation player.
Consolidated operating costs per available seat mile (excluding fuel and special items) are still expected to increase in the high single digits.
JBLU now anticipates its third-quarter revenues to be down 2.5% to up 1% on a year-over-year basis. This marks an improvement from the previous guidance of a decline in the range of 1.5-5.5%. JBLU now expects its third-quarter capacity (measured in available seat miles) to decline in the 3-5% range, which marks an improvement over the prior forecast to decline in the 3-6% band.
JetBlue now anticipates third-quarter 2024 average fuel cost per gallon in the range of $2.70 - $2.80 (prior view: $2.82 - $2.97). JBLU now anticipates consolidated operating costs per available seat mile (excluding fuel and special items) to increase in the range of 5-7%, down from the prior expectation of a 6-8% increase.
Canadian National Railway Company(CNI - Free Report) adjusted the outlook for the current year following labor disruptions that threatened to weaken the economy of Canada. The railroad operator now expects adjusted EPS to grow in the low single-digit range compared with its previous expectation of mid to high single-digit growth. Capital expenditures (net of amounts reimbursed by customers) for the current year are still expected to be C$3.5 billion. The railroad operator now expects adjusted return on invested capital for the current year to be in the 13-15% range compared with the previous expectation of roughly 15%.
Following the railroad operator‘s decision to cut the 2024 EPS growth outlook and the weak economic environment, CNI withdrew its previously provided guidance for the 2024-2026 period. CNI targets compounded annual adjusted EPS growth in the high-single-digit range.
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Allegiant Shares Up 6.39% on Improved Third-Quarter Outlook
Shares of Allegiant Travel Company (ALGT - Free Report) performed well on the bourse on Sept. 20, 2024, closing the trading session at $45.81 per share, up 6.39% from the previous day's closing. The upside was owing to the improved third-quarter 2024 guidance revealed by the company on the back of upbeat travel demand.
ALGT now anticipates its third-quarter capacity (measured in available seat miles) for scheduled service to increase 1.6% on a year-over-year basis. This marks an improvement from the prior expectation to increase 1.3%.
Operating margin is now expected to decline in the 0.5-1.5% range, which marks an improvement over the prior forecast to decline in the 4.5-6.5% band.
Loss per share is now anticipated to be in the range of $1.75-$2.25, which marks an improvement from the prior expectation of loss per share of $2.50-$3.50. The Zacks Consensus Estimate is pegged at a loss of $2.65 per share, which is above the updated guidance.
Drew Wells, chief commercial officer of Allegiant, stated, "While we expected the year-over-year unit revenue cadence to improve through the end of the quarter, the environment has certainly outperformed our initial expectations. Although the full month of September will likely be TRASM negative on a year-over-year basis, we now expect the back half of the month to flip positive. Given recent booking improvements coming out of July, we expect third-quarter unit revenues to be down roughly 5.5 percent year-over-year compared with our prior commentary of down 7.5 percent. Although early, holiday bookings are showing signs of strength with both yields and loads performing well against expectations on December capacity increases of 18 percent over 2023."
Declining fuel expenses mark another major positive. Allegiant now anticipates third-quarter 2024 fuel cost per gallon to be $2.70, down from the prior view of $2.80. Lower fuel costs should boost the company’s bottom line, as fuel expenses represent a key input cost for any transportation player.
Non-fuel unit costs are expected to be up almost 4.5% on a year-over-year basis. This marks an improvement of 2.5 points from the prior view of increasing 7%. The uptick was owing to the CrowdStrike (CRWD - Free Report) -induced disruptions across the industry and a better-than-expected completion factor during the quarter. The global technology outage on July 19, caused by security software provider CrowdStrike’s software update, has hit some of the major U.S. airlines, leading to multiple flight cancelations. ALGT reaped the benefits from the troubles of its competitors’ flight cancelations.
Given this encouraging outlook, we are keenly waiting for the company’s upcoming third-quarter earnings release.
ALGT’s Zacks Rank & Price Performance
ALGT currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of ALGT have plunged 44.6% so far this year against 24.1% growth of the Zacks Airline industry.
YTD Price Comparison
Updated Guidance of Other Transportation Companies
Alaska Air Group, Inc. (ALK - Free Report) raises its third-quarter 2024 adjusted earnings per share guidance to the range of $2.15-$2.25 from the previously guided range of $1.40 to $1.60. Improved revenue and fuel cost outlook have led to the encouraging earnings per share (EPS) forecast.
Alaska Air has witnessed upbeat air travel demand during the summer season, offering hassle-free service for guests with a 99.3% completion rate quarter-to-date. Backed by the upbeat demand, Alaska Air now expects its third-quarter 2024 revenue per available seat mile (a key measure of unit revenues) to be up 2% on a year-over-year basis, an improvement from the previous forecast of flat to positive.
ALK continues to expect third-quarter capacity (measured in available seat miles) to increase in the range of 2-3% on a year-over-year basis.
Declining fuel expenses (owing to the moderating crude oil and West Coast refining margins) mark another major positive. ALK now anticipates third-quarter 2024 economic fuel cost per gallon in the range of $2.60-$2.70 (prior view: $2.85-$2.95). Lower fuel costs should boost the company’s bottom line, as fuel expenses represent a key input cost for any transportation player.
Consolidated operating costs per available seat mile (excluding fuel and special items) are still expected to increase in the high single digits.
JetBlue Airways Corporation (JBLU - Free Report) has recently issued improved third-quarter 2024 guidance on the back of upbeat travel demand.
JBLU now anticipates its third-quarter revenues to be down 2.5% to up 1% on a year-over-year basis. This marks an improvement from the previous guidance of a decline in the range of 1.5-5.5%. JBLU now expects its third-quarter capacity (measured in available seat miles) to decline in the 3-5% range, which marks an improvement over the prior forecast to decline in the 3-6% band.
JetBlue now anticipates third-quarter 2024 average fuel cost per gallon in the range of $2.70 - $2.80 (prior view: $2.82 - $2.97). JBLU now anticipates consolidated operating costs per available seat mile (excluding fuel and special items) to increase in the range of 5-7%, down from the prior expectation of a 6-8% increase.
Canadian National Railway Company(CNI - Free Report) adjusted the outlook for the current year following labor disruptions that threatened to weaken the economy of Canada. The railroad operator now expects adjusted EPS to grow in the low single-digit range compared with its previous expectation of mid to high single-digit growth. Capital expenditures (net of amounts reimbursed by customers) for the current year are still expected to be C$3.5 billion. The railroad operator now expects adjusted return on invested capital for the current year to be in the 13-15% range compared with the previous expectation of roughly 15%.
Following the railroad operator‘s decision to cut the 2024 EPS growth outlook and the weak economic environment, CNI withdrew its previously provided guidance for the 2024-2026 period. CNI targets compounded annual adjusted EPS growth in the high-single-digit range.