Hawaiian Holdings (HA) Posts Lower Than Expected Q4 Loss – January 26, 2022
Hawaiian Holdings, Inc. (HA – Free Report) fourth quarter 2021 loss (excluding 44 cents of one-time items) of $1.37 per share was narrower than Zacks’ consensus estimate of a loss of $1.69. Notably, the company reported a loss of $3.71 in the prior year quarter.
Additionally, quarterly revenue of $494.7 million jumped more than 100% year-over-year and topped Zacks’ consensus estimate of $493.4 million.
Despite the omicron-induced crisis, passenger revenue (contributing 85.5% to revenue) jumped 361% year-on-year to $423.12 million. Scheduled airline traffic, measured in revenue passenger miles, increased 423.1% year-on-year to 2,979.8 million in the quarter under review. Scheduled capacity (measured in available seat miles) increased by 194% to 4,210.1 million. The load factor (percentage of seats occupied by passengers) improved by 3,100 basis points to 70.8% in the current quarter, as higher traffic offset the expansion in capacity. Passenger revenue per ASM (PRASM) jumped 56.8% to 10.05 cents.
Operating revenue per available seat mile (RASM: a key measure of unit revenue) in the quarter increased 13.4% year-over-year to 11.68 cents for all operations. Average fuel cost per gallon (economy) increased 81.4% to $2.34 in the fourth quarter. With the majority of the fleet grounded, gallons of jet fuel consumed jumped 147.1% in the end-December quarter.
As of December 31, 2021, Hawaiian Holdings’ cash, cash equivalents and unrestricted short-term investments totaled $1.7 billion. Outstanding debt and finance lease obligations were $1.9 billion.
First quarter outlook
Capacity (or ASM) is expected to decline 10-13% from Q1 2019 levels.
Total revenue is expected to fall 31-35% from Q1 2019 levels.
Costs per ASM (excluding fuel and non-recurring items) are expected to increase 10-13% compared to Q1 2019 figures.
Gallons of jet fuel consumed are expected to fall 18-21% from the level of the first quarter of 2019.
Adjusted EBITDA is expected to fall from $150 million to $90 million.
The effective tax rate is expected to be 21% in the first quarter.
Fuel price per gallon is expected to be $2.53 in the first quarter of 2022.
Below expectations compared to 2019.
For the current year, the company expects capital expenditures of approximately $105-125 million (previous forecast: $365-385 million).
ASM is forecast between minus 3% and plus 1% from 2019 levels (previous forecast: stable at 4%).
Cost per ASM (excluding fuel and non-recurring items) expected to increase 3.5-7.5% (previous forecast: up 2-6%)
Gallons of jet fuel consumed are expected to fall 4.5% to 8.5% (previous forecast: up 0.5% to down 3.5%).
Fuel price per gallon is expected to be $2.42 (previous forecast: $2.09).
Hawaiian Holdings currently carries a Zacks rank of #4 (sell).
In the broader transport sector, JB Hunt Transportation Services (JBHT – Free Report), United Airlines (LAU – Free report) and Delta Airlines (DAL – Free report) recently released its fourth quarter 2021 results.
JB Hunt Transportation Services, sporting a Zacks Rank #1 (Strong Buy), reported Q4 2021 earnings of $2.28 per share. The figure topped Zacks’ consensus estimate of $1.99. Net income jumped 58.3% year-over-year on higher revenue across all segments. You can see the full list of today’s Zacks #1 Rank stocks here.
JB Hunt’s operating revenue of $3,497 million also topped Zacks’ consensus estimate of $3,287.8 million. Revenue increased 27.7% year over year. Total operating revenue, excluding fuel surcharges, increased 21.7% year over year.
United Airlines, carrying a Zacks rank of No. 4, suffered a loss (excluding 39 cents of one-time items) of $1.60 per share in the fourth quarter of 2021, narrower than the Zacks consensus estimate of a loss of 2 $.23. The loss amount decreased by 77.1% year-on-year.
United Airlines’ operating revenue of $8,192 million also topped Zacks’ consensus estimate of $7,930.9 million. Revenue was up more than 100% year over year, with passenger revenue contributing 84% of revenue and growing 185.4% to $6,878 million.
Delta, carrying a Zacks Rank #5 (Strong Sell), reported fourth-quarter 2021 earnings (excluding 86 cents of one-time items) of 22 cents per share, beating Zacks’ consensus estimate of 15 cents. Net income improved from the year-ago quarter loss of $2.53 per share. Strong holiday travel demand and favorable pricing contributed to December quarter results.
Delta’s revenue was $9,470 million, beating Zacks’ consensus estimate of $9,232.1 million and climbing more than 100% year-over-year. The advantage can be attributed to people who resort to air travel during vacations.