Airline earnings continue to roll out this week led by a big beat for United Airlines late Monday. American Airlines leapt on its results early Thursday. Southwest Airlines reversed lower after surging early Thursday on earnings. Alaskan Airlines rose and provided an update on its Boeing jet inspections. JetBlue is on tap next week. Airline stocks gained altitude this week on the reports.
Analysts broadly expected a soft quarter for the industry due to rising fuel prices and cost concerns. Delta Air Lines beat Q4 views on Jan. 12. But Delta fell short of its long-term goal of EPS greater than $7 in 2024 and guided full-year earnings between $6 and $7 per share, Barron's reported. Still, the outlook was in-line with FactSet predictions of $6.50 per share.
Meanwhile, some major airlines are grappling with fall out from mechanical issues on Boeing 737 Max 9 jets after an emergency exit door blew out during an Alaska Airlines flight on Jan. 5. The Federal Aviation Administration grounded all 171 of the 737 Max 9 aircraft in service for safety inspections, which affected 79 jets in United's fleet. On Monday, the FAA urged additional inspections of mid-exit door plugs for Boeing 737-900ER planes after some operators found issues with the bolts during inspections.
Elsewhere, adverse winter weather prompted the cancellation of more than 2,200 flights early last week and delayed an additional 6,800 routes.
American Airlines
American Airlines reported a 75% drop in adjusted earnings to 29 cents per share, but still came in well above FactSet forecasts of 11 cents per share. Total revenue eased 1% to $13.06 billion, just above estimates of $13.01 billion, marking eight quarters of declining sales growth.
American Airlines guided a Q1 adjusted loss ranging from 15-35 cents per share, compared to FactSet predictions of a 22 cent per share loss. The airline sees 2024 adjusted earnings between $2.25 and $3.25 per share. Analysts expect full-year earnings of $2.45 per share on 3.6% revenue growth to $54.67 billion.
American reduced its total debt by $3.2 billion in 2023 and is 75% of the way to its goal of cutting debt by $15 billion by the end of 2025. The company has reduced its total debt by $11.4 billion from its peak levels in mid-2021.
AAL stock spiked 10.3% Thursday, jumping above its 200-day moving average. American shares jumped nearly 12% so far this year.
Southwest
Southwest Airlines reported a Q4 adjusted earnings of 37 cents per share, compared to a loss of 38 cents per share last year. The airline reported a GAAP loss of 37 cents per share, unchanged from the year prior. Revenue increased 10.5% to a record $6.82 billion. FactSet analysts expected adjusted earnings of 12 cents per share on $6.75 billion in revenue.
For Q1, Southwest expects revenue per available seat mile (RASM) to increase 2.5% to 4.5% on about 10% capacity growth. Full-year capacity is seen increasing about 6%. Southwest expects 2024 fuel costs to range from $2.55 to $2.65 per gallon, down from $3 in Q4. Southwest's full-year fuel costs were $2.89 per gallon.
LUV stock reversed Thursday to close down 2.3% after climbing 3.2% in early trade. Shares pared gains to 1.3% for the week and reclaimed their 200-day line on Monday. Southwest leapt 7.7% so far this year.
Alaskan Airlines
Alaska Airlines reported a 67% drop in adjusted earnings to 30 cents per share on 3% revenue growth to $2.55 billion. FactSet analysts expected earnings of 18 cents per share on $2.53 billion in revenue. The results marked the second consecutive quarter of accelerating earnings declines for the airline.
Alaskan Airlines also gave an update on its Boeing inspections after the 737 Max 9 emergency landing earlier in January. The company is preparing to complete final inspections of all its 737-9 Max planes. Each aircraft will return to service once any findings are resolved following the checks. Alaskan Airlines completed the requested inspections of 737-900ER planes with only one minor finding that was immediately corrected.
The company said it initiated a thorough review of Boeing's production quality and control systems and vendor oversight. Alaskan also began enhancing its oversight program at the Boeing production facility by expanding its quality validation team.
ALK stock jumped 4.5% Thursday. Shares fell 4.2% so far this year through Thursday's close.
United Airlines
United Airlines Q4 adjusted earnings fell 18.7% to $2.00 per share. Revenue growth slowed for the third consecutive quarter, increasing 9.9% to $13.63 billion.
FactSet analysts expected a 31% drop to $1.69 per share on 9.3% revenue growth to $13.55 billion.
Full-year adjusted earnings leapt to $10.05 per share compared to $2.52 per share last year, and beat estimates of $9.76 per share. United's full-year revenue jumped 19.5% to $53.72 billion, edging out FactSet forecasts of $53.64 billion.
Fourth-quarter capacity increased 14.7% year-over-year and passenger revenue climbed 10.9% to $12.42 billion.
For Q1, United expects an adjusted loss between 85 cents and 35 cents per share, while FactSet expects a loss of 24 cents per share. United Airlines guided fiscal 2024 earnings between $9 and $11 per share, compared to FactSet predictions of $9.48 per share.
UAL stock leapt 5.2% Tuesday. United surged 4.1% in 2024 through Thursday's close despite flight cancellations and Boeing concerns.
JetBlue
JetBlue reports Q4 results on Jan. 30 after a federal judge last Tuesday blocked its $3.8 billion buyout of Spirit Airlines. JetBlue and Spirit plan to contest the court ruling. Meanwhile, analysts expect JetBlue to report a loss of 27 cents per share compared to earnings of 22 cents per share last year. Revenue is seen declining 5.4% to $2.28 billion.
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