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Monday, May 2, 2005

Box Scores: First Quarter Financial Results

Alaska Air Group [ALK] {Frontier Airlines}
First Quarter Trend First Quarter Mar. 31, 2005 First Quarter Mar. 31, 2004 Percent Change
UP Horizon Revenue
$117.7M
$106.5M
10.5%
UP Horizon Expenses
$130.6M
$119.8M
9%
UP Horizon Operating Loss
($9.4M)
($9.5M)
1%
UP Corporate Net Loss/Share
($80.5M /$2.39)
(42.7M/$1.59)
88.5%
DN Horizon: RASM
15.5 cents
19.45 cents
(2.8%)
DN Horizon: CASM
16.69 cents
17.3 cents
(3.5%)

Analysis: Alaska Air Group's first quarter losses were greater than Wall Street's estimates. While high fuel prices contributed to the loss, the carrier has 50 percent of its fuel hedged at $30 a gallon. Horizon is now flying 23 percent of its capacity for Frontier, which generated 10 percent of its passenger revenues. Horizon has stretched its fleet for optimized flying. Any additional flying for Frontier or on its own network would require the acquisition of additional aircraft. The company is maintaining a $764 million cash balance.

ExpressJet Holdings [XJT] {Continental Airlines}
First Quarter Trend First Quarter Mar. 31, 2005 First Quarter Mar. 31, 2004 Percent Change
UP Operating Revenue
$375.4M
$364M
3.1%
UP Total Expenses
$336.6M
$315.4M
6.7%
DN Net Income
$23.2M
$28.7M
(18.9%)
DN Net Loss Per Share
39 cents
48 cents
(18.8%)
DN CASM
12.28 cents
13.14 cents
(6.5%)

Analysis: As a result of a new rate with Continental, ExpressJet's earnings were down in the first quarter. At 39 cents per share, it came in two cents less than what Wall Street had anticipated. ExpressJet added five more Embraer [ERJ] 145XRs, bringing its fleet total to 250. It anticipates increasing its capacity in the next quarter by nearly 17 percent.

Republic Airways Holdings [RJET] {American Airlines, Delta Air Lines, United Airlines, US Airways}
First Quarter Trend First Quarter Mar. 31, 2005 First Quarter Mar. 31, 2004 Percent Change
UP Operating Revenue
$178.4M
$119.1M
49.7%
UP Total Expenses
$142.2M
$96.5M
47.3%
UP Net Income
$14.5M
$9.9M
46.7%
Net Income Per Share
48 cents
48 cents
0%
UP CASM
11.02 cents
10.12 cents
8.9%

Analysis: Republic Airways' first quarter earnings came in four cents more than the Wall Street consensus estimate. During the first quarter, the carrier took delivery of five Embraer 170s. It now has 16 of the 39 70-seaters that is has ordered. It also sold 6.9 million additional shares which netted the company about $80.8 million. The stock offering impacted the earnings per share calculation.

SkyWest [SKYW] { Delta Air Lines, United Airlines, Continental Airlines}
UP Operating Revenue
$340.2M
$253.7M
34.1%
UP Total Expenses
$305.8M
$218.8M
39.7%
DN Net Income
$18.7M
$19.3M
(3.1%)
DN Net Income Per Share
32 cents
33 cents
(3%)
UP RASM
15.3 cents
15.2 cents
0.7%
UP CASM
14 cents
13.4 cents
4.5%

Analysis: SkyWest missed the Wall Street first quarter earnings consensus by six cents. Bad weather in a number of SkyWest markets impacted its operations. Under its contracts, it gets penalized for cancelled flights. In the quarter, the carrier took delivery of 13 new 70-seaters; however, nine of these planes were delivered early, resulting in unexpected ownership costs and unproductive flying. SkyWest has a cash balance of $544.7 million.

Mesa Air Group [MESA] {America West Airlines, United Airlines, US Airways}
First Quarter TrendFirst Half Trend 2nd Quarter Mar. 31, 2005 2nd Quarter Mar. 31, 2004 Percent Change First Half Mar. 31, 2005 First Half Mar. 31, 2004 Percent Change
UP | UP Operating Revenue
$263.8M
$209.6M
25.8%
$528.6M
$397.2M
33%
UP | UP Total Expenses
$235.4M
$111.5M
111.1%
$471.9M
$378.9M
24.4%
UP | UP Net Income
$10.8M
$1.7M
535.2%
$24.7M
$5.9M
318.6%
UP | UP Net Income Per Share
26 cents
5 cents
420%
58 cents
16 cents
262.5%
DN | UP RASM
12.5 cents
13.2 cents
(0.8%)
13.2 cents
13.1 cents
0.8%
DN | DN CASM
11.9 cents
12 cents
(7.5%)
11.7 cents
11.8 cents
(0.8%)

Analysis: Mesa beat the Wall Street consensus second quarter earnings estimate by two cents. Its revenues were slightly below estimates while the company did a better job of holding down expenses than had been projected. Mesa took delivery of four 86- seat RJs in the quarter for the America West contract. Mesa anticipates flying 20 percent more capacity. With a cash balance of $255 million, Mesa wants to build its cash to $300 million by the end of the year.

( ) Indicates corporate affiliation. { } indicates code-share partnerships.

Sources: Company reports, Raymond James, Calyon Securities

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