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Monday, July 26, 2004

Regional Airline Box ScoresJune Financial Reports - First Wave

ExpressJet Holdings [XJT] (Continental Airlines)
Quarterly trend | Six month trend 2nd Q Ending 6/30/04 2nd Q Ending 6/30/03 Percent Change 1st Half Ending 6/30/04 1st Half Ending 6/30/03 Percent Change
UP | UP Operating Revenue
$370.8M
$320.3M
15.8%
$734.8M
$626.8M
17.2%
UP | UP Operating Expenses
$320.6M
$275.2M
16.5%
$636.1M
$538.4M
18.1%
DN | DN CASM
12.3?
13.2?
(7.2%)
12.7?
14?
(9.3%)
UP | UP Net Income
$29.6M
$27M
9.6%
$58.3M
$52.8M
10.5%
UP | UP Net Income Per Share
55?
42?
31%
$1.08
82?
31.7%

 

Analysis: ExpressJet beat Wall Street's consensus earnings per share estimate by one penny. The carrier's 13.5 percent operating margin beat its 10 percent target due to improve labor productivity and reduced maintenance costs. Two analysts have hiked their estimates, each projecting that ExpressJet will earn $2.18 per share for 2004.

 

Horizon Air (Unit of Alaska Air Group [ALK]) {Alaska Air, Frontier Airlines}
Quarterly trend | Six month trend 2nd Q Ending 6/30/04 2nd Q Ending 6/30/03 Percent Change 1st Half Ending 6/30/04 1st Half Ending 6/30/03 Percent Change
UP | UP Operating Revenue
$124.7M
$110.7M
12.6%
$235M
$209.6M
12.1%
DN | DN RASM
15.7?
17.49?
(9.9%)
15.8?
16.7?
(5.7%)
UP | UP Operating Expenses
$122.6M
$114.2M
7.4%
$242.4M
$228.2M
6.2%
DN | DN CASM
15.4?
18?
(14.1%)
16.3?
18.2?
(10.7%)
UP | UP Operating Income
$2.1M
($3.5M)
n/a
($7.4M)
($18.6M)
n/a
DN | DN Income Before Taxes
$4.7M
$15.7M
n/a
($5.7M)
$400,000
n/a

 

Analysis: While Horizon's RASM dropped 9.9 percent — primarily due to the contract flying for Frontier, its CASM fell by a larger than expected margin, said JP Morgan analyst Jamie Baker. The passenger revenue is also slightly ahead of his second quarter forecast. The Frontier contract contributed 9.6 percent of the quarter's passenger revenues.

 

Republic Airways Holdings [RJET] {American Airlines, Delta Airlines, United Airlines, US Airways}
Quarterly trend | Six month trend 2nd Q Ending 6/30/04 2nd Q Ending 6/30/03 Percent Change 1st Half Ending 6/30/04 1st Half Ending 6/30/03 Percent Change
UP | UP Operating Revenue
$124.6M
$106.1M
17.5%
$243.8M
$199.8M
22.1%
DN | DN RASM
11.7?
12.8?
(8.6%)
11.7?
13.1?
(10.7%)
UP | UP Operating Expenses
$102.7M
$79.9M
28.5%
$199.2M
$154.8M
28.7%
DN | DN CASM
10.2?
10.3?
(1%)
10.2?
10.8?
(5.6%)
DN | DN Net Income
$9.7M
$12.5M
(21.8%)
$19.7M
$21.1M
(6.8%)
DN | DN Net Income Per Share
42?
60?
(30%)
91?
$1.02
(10.8%)

 

Analysis: In its first quarterly report as a public company, Republic Airways handily beat Wall Street's earning per share consensus estimate of 36 cents by earning 42 cents per share. The June 2004 report suffers in comparison to last year when Republic was paid $6 million by America West to terminate its code-share partnership.

 

SkyWest [SKYW] {Delta Airlines, United Airlines, Continental Airlines}
Quarterly trend | Six month trend 2nd Q Ending 6/30/04 2nd Q Ending 6/30/03 Percent Change 1st Half Ending 6/30/04 1st Half Ending 6/30/03 Percent Change
UP | UP Operating Revenue
$267.2 M
$212.6M
25.9%
$521M
$420M
24%
DN | DN RASM
15.2?
15.4?
(1.3%)
15.2?
15.6?
(2.6%)
UP | UP Operating Expenses
$232.2M
$188.4M
23.2%
$451M
$375.6M
20%
DN | DN CASM
13.5?
13.8?
(2.2%)
13.4?
14.1?
(9.3%)
UP | UP Net Income
$20M
$14.8M
35.1%
$39.4M
$28.1M
40.2%
UP | UP Net Income Per Share
34?
26?
30.7%
67?
49?
36.7%

Analysis: SkyWest met Wall Street's consensus earning estimate of 34 cents per share. However revenue was less than some expected because SkyWest failed to earn its full incentive payment from United. The carrier was graded a C, instead of the expected B. United changed the on-time standards used in its rating and SkyWest is now flying into congested Chicago O'Hare. Raymond James has dropped its 2004 earnings estimate by 3 cents to $1.40 per share.

( ) Corporate affiliation { } Code-share partners

Source: Company reports, Blaylock & Partners, Credit Suisse, JP Morgan, Raymond James

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