A month has gone by since the last earnings report for Hawaiian Holdings (HA). Shares have added about 6.5% in that time frame, outperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.
Narrower-Than-Expected Loss in Q3
Hawaiian Holdings’ loss (excluding $1.23 from non-recurring items) of 95 cents per share was narrower than the Zacks Consensus Estimate of a loss of $1.29 and the year-ago loss of $3.76. Quarterly revenues of $508.8 million skyrocketed 569.7% year over year and beat the Zacks Consensus Estimate of $490.6 million.
Passenger revenues (contributing 89.2% to the top line) surged to $454 million from $39.8 million a year ago as more people took to the skies following the ramp-up in vaccination. Airline traffic, measured in revenue passenger miles, surged in excess of 1625% year over year in the quarter under review. Capacity (measured in available seat miles) expanded 488.7% as the airline increases the same to meet the uptick in demand. Load factor (percentage of seats filled by passengers) expanded 50.3 percentage points to 75.9% for scheduled operations. Passenger revenue per ASM (PRASM) ascended 93.9% to 10.84 cents. Average fuel cost per gallon (economic) rose to $2.07 from $1.24 a year ago. Unit cost (excluding fuel and non-recurring items) declined 74.9% to 10.28 cents in the September quarter.
For the December quarter, capacity is anticipated to drop 18-21% from the fourth-quarter 2019 reading. Total revenues are anticipated to plunge 32-37% from the fourth-quarter 2019 actuals. Operating expenses (excluding non-recurring items) are expected to decline 7-11% from the levels recorded in fourth-quarter 2019. Adjusted EBITDA is expected between -$50 and -$110 million in the fourth quarter of 2021. Effective tax rate and fuel cost per gallon are anticipated to be 21% and $2.41, respectively, in the fourth quarter. Jet fuel consumption (in gallons) is expected to decline in the 21.5-24.5% band in fourth-quarter 2021 from the fourth-quarter 2019 actuals.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -153.33% due to these changes.
Currently, Hawaiian Holdings has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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 this revision 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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