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.

Liquidity

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.

Outlook 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).

Zacks Rank

Hawaiian Holdings currently carries a Zacks rank of #4 (sell).

Sector overview

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.

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