Airline Stock Roundup: Q1 Earnings Reports Of American, Southwest, Alaska Air & Others

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In the past week, sector heavyweights like American Airlines (AALFree Report), Southwest Airlines (LUVFree Report), JetBlue Airways (JBLU - Free Report), and Alaska Air Group (ALK - Free Report) reported earnings for first-quarter 2023. Even though robust air-travel demand boosted the top lines of these airline operators, high fuel costs limited bottom-line growth.  

First-quarter earnings-related updates were discussed in the previous write-up as well.


Recap of the Latest Top Stories

American Airlines’ first-quarter 2023 earnings (excluding 3 cents from non-recurring items) of 5 cents per share surpassed the Zacks Consensus Estimate by a penny despite higher costs.

In the year-ago quarter, AAL, currently carrying a Zacks Rank #2 (Buy), incurred a loss of $2.32 per share when air-travel demand was not as buoyant as in the present scenario. Operating revenues of $12,189 million increased 37% year-over-year, reflecting upbeat air-travel demand.

AAL expects system capacity for the June-end quarter to increase 3.5-5.5% from the figure reported in second-quarter 2022. AAL expects June-end quarter's earnings per share (excluding net special items) to be $1.20-1.40. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Southwest Airlines reported first-quarter 2023 loss of 27 cents per share, wider than the Zacks Consensus Estimate of a loss of 21 cents. In the year-ago reported quarter, LUV had reported a loss of 32 cents per share. LUV had to bear the first quarter of 2023 loss due to the unfavorable financial impacts of almost $380 million pre-tax, or $294 million after-tax, related to the December 2022 operational disruption.

Revenues of $5,706 million lagged the Zacks Consensus Estimate of $5,741.4 million but improved 21.6% year-over-year. For 2023, LUV now expects capacity to improve 14-15% (prior view: up 15-16%) from the 2022 level.

Alaska Air Group reported first-quarter 2023 loss of 62 cents per share, wider than the Zacks Consensus Estimate of a loss of 48 cents. In the year-ago quarter, ALK incurred a loss of $1.33 per share. Operating revenues of $2,196 million missed the Zacks Consensus Estimate of $2,202.5 million.

The top line jumped 31% year-over-year, with passenger revenues accounting for 90.3% of the top line and increasing 31% owing to continued recovery in air-travel demand. For the second quarter of 2023, Alaska Air expects capacity to improve 6-9% from the year-ago reported figure.

JetBlue Airways’ first-quarter 2023 loss (excluding 24 cents from non-recurring items) of 34 cents per share was narrower than the Zacks Consensus Estimate of a loss of 38 cents. In the year-ago quarter, JBLU incurred a loss of 80 cents per share. 

Operating revenues of $2,328 million climbed 34.1% year-over-year and beat the Zacks Consensus Estimate of $2,322.5 million. Total revenues for 2023 are forecast to increase year-over-year in the high single-digit to low double-digit range. Management expects 2023 earnings per share to be between 70 cents and $1.00.

Spirit Airlines’ (SAVE - Free Report) first-quarter 2023 loss (excluding 13 cents from non-recurring items) of 82 cents per share was narrower than the Zacks Consensus Estimate of a loss of 89 cents. In the year-ago quarter, SAVE posted a loss of $1.60.

Revenues of $1,349.8 million missed the Zacks Consensus Estimate of $1,353.5 million. However, the top line improved 39.5% year-over-year on the back of increased flight volume and higher operating yields.


Performance

The following table shows the price movement of the major airline players over the past week and during the last six months.

Zacks Investment Research

Image Source: Zacks Investment Research

The table above shows that most airline stocks exhibited a mixed trend with respect to price over the past week. The NYSE ARCA Airline Index increased marginally to $59.64. Over the course of the past six months, the NYSE ARCA Airline Index inched up 1%.


What's Next in the Airline Space?

Stay tuned for first-quarter 2023 earnings reports of various other airlines.


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