Spirit Airlines Falls Short on Quarterly Earnings with $0.10 EPS Miss
August 10, 2023
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Spirit Airlines ($NYSE:SAVE), a US-based ultra low-cost carrier, released its quarterly earnings on Thursday, falling short of expectations with an EPS of $0.29. This missed the consensus estimate of $0.39, a difference of $0.10. The airline also offers ancillary services such as baggage fees, priority boarding and additional legroom. The company primarily operates in the US but also serves many international destinations. The disappointing earnings announcement has created a significant drop in the stock price.
Analysts have downgraded their outlook on the company and have recommended investors hold off on buying its stock. Despite this news, Spirit Airlines remains committed to its mission of providing affordable air travel. The company believes that providing travelers with low fares will continue to drive demand and support further growth. While the stock may have taken a hit, Spirit Airlines may be able to quickly recover and return to profitability if they can successfully contain costs and reinvigorate demand.
Earnings
It has been a difficult quarter for the market leader in the airline industry, Spirit Airlines. The airline’s latest earnings report for Q2 of FY2023 ending June 30 2021 revealed a total revenue of 859.31M USD with a net income loss of 287.86M USD. This was a 37.1% decrease in total revenue compared to the same quarter a year ago. Looking back 3 years, the total revenue of Spirit Airlines has increased from 859.31M USD to 1432.47M USD.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Spirit Airlines. More…
| Total Revenues | Net Income | Net Margin |
| 5.52k | -413.3 | -0.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Spirit Airlines. More…
| Operations | Investing | Financing |
| -45.08 | -264.41 | 247.11 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Spirit Airlines. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 9.37k | 7.9k | 13.48 |
Key Ratios Snapshot
Some of the financial key ratios for Spirit Airlines are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 24.3% | 2.3% | -7.3% |
| FCF Margin | ROE | ROA |
| -6.2% | -17.0% | -2.7% |
Price History
The airline opened trading at $16.2 and closed the day at the same price, up by 0.3% from its previous closing price. The airline has faced significant pressure this quarter due to the pandemic and the necessary travel restrictions imposed as a result. This has resulted in a drop in both passenger numbers and revenue for Spirit Airlines, which has subsequently impacted its earnings for the quarter. The airline is hoping to recover in the coming months as more people become eligible for the vaccine and travel restrictions begin to ease. Live Quote…
Analysis
At GoodWhale, we conducted a wellbeing analysis on SPIRIT AIRLINES. According to our Risk Rating, SPIRIT AIRLINES is a low risk investment for potential investors in terms of financial and business aspects. However, our analysis did uncover two risk warnings in the income sheet and cashflow statement. To view these warnings, we encourage users to become a registered user of our services so that they can gain access to the full report. With our technology, users have the ability to stay informed about their investments and make more informed decisions. More…
Peers
Spirit Airlines Inc competes with Frontier Group Holdings Inc, JetBlue Airways Corp, and Southwest Airlines Co in the airline industry. Each company has a different business model, but all are trying to attract customers with low fares. Spirit Airlines Inc has been successful in this by offering bare-bones fares that are much lower than its competitors.
– Frontier Group Holdings Inc ($NASDAQ:ULCC)
Frontier Group Holdings Inc is a provider of communication services in the United States. The company offers broadband, video, and voice services to residential and business customers. It also provides data and Internet services. The company was founded in 1935 and is headquartered in Stamford, Connecticut.
– JetBlue Airways Corp ($NASDAQ:JBLU)
JetBlue Airways Corporation is an American airline company. It is the 6th-largest airline in the United States. The company was founded in 1998 and is headquartered in New York City. JetBlue Airways operates flights to more than 100 destinations in the United States, Caribbean, and Latin America. The company has a market capitalization of $2.46 billion as of 2022 and a return on equity of -8.81%. JetBlue Airways is a publicly traded company listed on the Nasdaq Stock Exchange.
– Southwest Airlines Co ($NYSE:LUV)
Southwest Airlines Co is a major U.S. airline, headquartered in Dallas, Texas. The company operates a fleet of 737 aircraft and serves destinations across the United States and several international destinations. Southwest is one of the largest airlines in the world, with a market capitalization of over $22 billion as of 2022. The company has a strong financial position, with a return on equity of over 8%. Southwest is a well-known brand and is a preferred choice for many travelers.
Summary
Spirit Airlines has released its quarterly earnings results, missing expectations by $0.10 EPS. The company reported $0.29 EPS for the quarter, representing a decline from its previous quarter’s results. The airline has shown an improvement in cost management and cost containment in the quarter, which has helped to boost the operating margin. Despite the decline in earnings and revenues, investors should be encouraged by the improved cost management and could see potential upside in the stock.
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