Allegiant (ALGT) Reports Narrower-Than-Expected Loss in Q3

Zacks Equity Research
·4-min read

Allegiant Travel Company ALGT incurred a third-quarter 2020 loss (excluding $2.46 from non-recurring items) of $4.28 per share, narrower than the Zacks Consensus Estimate of a loss of $4.81. Results were hurt by coronavirus-induced weakness in air-travel demand. However, sentiments were bullish in the year-ago quarter when the company delivered earnings of $2.70 per share on strong air-travel demand.

Moreover, operating revenues of $201 million plunged 54% year over year but surpassed the Zacks Consensus Estimate of $192.2 million. The downside was due to the 53.5% fall in passenger revenues, which accounted for bulk (90.5%) of the top line.

The lackluster earnings report naturally disappointed investors. Consequently, shares of the company declined 6.3% on Oct 28 to $123.90.

Quarter in Details

Air traffic (measured in revenue passenger miles or RPMs) for scheduled service declined 45.9% in the quarter under review. Capacity (measured in available seat miles or ASMs) dropped 6.5% year over year. Consequently, load factor (percentage of seats filled by passengers) deteriorated 3630 basis points to 49.7% in the reported quarter as traffic plunge outweighed capacity contraction.

Airline operating cost per available seat miles (CASM) excluding fuel dipped 22.5% year over year. Average fuel cost per gallon (scheduled) declined 39.2% to $1.32 in the quarter. Moreover, total scheduled service passenger revenue per available seat miles (TRASM) fell 49.5% to 5.60 cents.

Liquidity

As of Sep 30, 2020, Allegiant Travel’s unrestricted cash and investments totalled $709.8 million compared with $473.3 million at the end of December 2019. Long-term debt and finance lease obligations (net of current maturities and related costs) came at $1,316.2 million, up 5.4% from 2019 end.

Zacks Rank

Allegiant Travel currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Sectorial Snapshot

Apart from Allegiant , let’s take a look at some other Zacks Transportation sector’s third-quarter earnings like Delta Air Lines DAL, J.B. Hunt Transport Services JBHT and  United Airlines Holdings, Inc. UAL.

Delta incurred a loss (excluding $5.17 from non-recurring items) of $3.30 per share in the September quarter, wider than the Zacks Consensus Estimate of a loss of $3.14. With the health peril showing no signs of subsiding, passenger revenues continued to be weak in the September quarter as well with a plunge of 83% year over year to $1,938 million.

J.B. Hunt reported mixed third-quarter 2020 results, with earnings missing estimates and revenues beating the same. Quarterly earnings of $1.18 per share fell short of the Zacks Consensus Estimate of $1.26. Moreover, the bottom line declined 15.7% year over year due to disappointing performance in its intermodal (JBI) unit. Total operating revenues increased 4.6% to $2,472.5 million. Revenues also beat the consensus mark of $2,345.2 million.

United Airlines incurred a loss (excluding $1.83 from non-recurring items) of $8.16 per share, wider than the Zacks Consensus Estimate of a loss of $7.63. Results were hurt by coronavirus-induced weakness in air-travel demand. Moreover, operating revenues of $2,489 million slumped 78.1% year over year and also lagged the Zacks Consensus Estimate of $2,570.1 million. This year-over-year plunge was due to an 84.3% drop in passenger revenues to $1,649 million.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot stocks we're targeting >>
 


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 report
 
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
 
United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
 
J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report
 
Allegiant Travel Company (ALGT) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research