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7200.0
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2018-01-15 00:00:00 UTC
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Allegiant's December Traffic Rises, Q4 TRASM View Bullish
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AAL
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https://www.nasdaq.com/articles/allegiants-december-traffic-rises-q4-trasm-view-bullish-2018-01-15
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nan
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nan
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Shares of Allegiant Travel CompanyALGT gained 6.9% ever since it released impressive traffic numbers for December 2017, last week. Moreover, it unveiled an improved outlook on total revenue per available seat miles (TRASM: a key measure of unit revenue) for the fourth quarter of 2017. Detailed fourth-quarter results will be revealed on Jan 31.
Traffic Data
Traffic for the total system including scheduled service and fixed fee contract - measured in revenue passenger miles (RPMs) - increased 11.4% on a year-over-year basis to 989.39 million in December. System capacity, calculated in available seat miles (ASMs), improved 9.2% to 1.23 billion in the same month. Allegiant's traffic data was aided by an increased demand for air travel.
With traffic growth outpacing capacity expansion, load factor (percentage of seats filled with passengers) improved 160 basis points year over year to 80.4%. Allegiant's passenger count also rose 10.6% in December. Its system-wide average fuel cost per gallon was approximately $2.09 in the month.
While RPMs increased 8%, ASMs expanded 10% in 2017. However, load factor declined 150 basis points to 81.6% in the same period.
Allegiant Travel Company Price
Allegiant Travel Company price | Allegiant Travel Company Quote
Improved Q4 Outlook
Allegiant revised its expectations for fourth-quarter TRASM ( projected in the range of down 0.3% to up 0.1%).This represents an improvement over the previous guidance, which projected the metric in the range of -1% to +1%.
The outlook for fourth-quarter not-fuel unit costs have also been improved at Allegiant. The metric is now expected to increase in the band of 5.3% to 5.7% (previous outlook: 7% to 9%).
Notably, Allegiant is not the only carrier to issue an improved fourth-quarter unit revenue outlook. Other players in the airline space like JetBlue Airways JBLU , American Airlines Group AAL and United Continental Holdings UAL have also done the same recently.
Zacks Rank
Allegiant carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Wall Street's Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It's a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
Allegiant Travel Company (ALGT): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Other players in the airline space like JetBlue Airways JBLU , American Airlines Group AAL and United Continental Holdings UAL have also done the same recently. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report Allegiant Travel Company (ALGT): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Shares of Allegiant Travel CompanyALGT gained 6.9% ever since it released impressive traffic numbers for December 2017, last week.
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Other players in the airline space like JetBlue Airways JBLU , American Airlines Group AAL and United Continental Holdings UAL have also done the same recently. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report Allegiant Travel Company (ALGT): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Allegiant Travel Company Price Allegiant Travel Company price | Allegiant Travel Company Quote Improved Q4 Outlook Allegiant revised its expectations for fourth-quarter TRASM ( projected in the range of down 0.3% to up 0.1%).This represents an improvement over the previous guidance, which projected the metric in the range of -1% to +1%.
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Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report Allegiant Travel Company (ALGT): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Other players in the airline space like JetBlue Airways JBLU , American Airlines Group AAL and United Continental Holdings UAL have also done the same recently. Allegiant Travel Company Price Allegiant Travel Company price | Allegiant Travel Company Quote Improved Q4 Outlook Allegiant revised its expectations for fourth-quarter TRASM ( projected in the range of down 0.3% to up 0.1%).This represents an improvement over the previous guidance, which projected the metric in the range of -1% to +1%.
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Other players in the airline space like JetBlue Airways JBLU , American Airlines Group AAL and United Continental Holdings UAL have also done the same recently. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report Allegiant Travel Company (ALGT): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Traffic Data Traffic for the total system including scheduled service and fixed fee contract - measured in revenue passenger miles (RPMs) - increased 11.4% on a year-over-year basis to 989.39 million in December.
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7201.0
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2018-01-15 00:00:00 UTC
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Will Rising Costs Dampen J.B. Hunt's (JBHT) Q4 Earnings?
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AAL
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https://www.nasdaq.com/articles/will-rising-costs-dampen-j.b.-hunts-jbht-q4-earnings-2018-01-15
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nan
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nan
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J.B. Hunt Transport Services Inc.JBHT is slated to report fourth-quarter 2017 results on Jan 18.
Last quarter, the company delivered a negative earnings surprise of 5.2%. The transportation company's earnings of 91 cents per share missed the Zacks Consensus Estimate of 96 cents. The bottom line also declined 6.2% on a year-over-year basis due to higher operating expenses. Total operating revenues increased 9.1% year over year to $1,843.3 million and also surpassed the Zacks Consensus Estimate of $1,826.8 million.
Let's see how things are shaping up this earnings season.
Factors at Play
High labor costs are likely to hurt the company's fourth-quarter results, ditto the previous quarter.
The company has provided a tepid outlook for the fourth quarter.
J.B. Hunt expects its fourth-quarter bottom line to vary between 98 cents and $1.03 per share excluding charges. The Zacks Consensus Estimate for the same in the to-be-reported period is pegged at the highest point of the guided range.
Revenues for the quarter to be reviewed are expected in the $1.9-$2.0 billion range. While the Zacks Consensus Estimate for the metric stands at the lowest point of this guided range.
Fourth-quarter operating income is estimated in the band of $145-$155 million.
Moreover, the company's high leverage ratio may further affect results in the quarter.
However, volume growth at the company's primary division - intermodal - may buoy results in the soon-to-be-reported quarter.
Further, the Tax Cut and Jobs Act is likely to aid J.B. Hunt. The company expects the tax overhaul to result in a one-time benefit for 2017. Effective tax rate in the final quarter of 2017 is estimated at 37.6%.
Earnings Whispers
Our proven model does not conclusively show that J.B. Hunt is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as elaborated below.
Zacks ESP : J.B. Hunt has an Earnings ESP of -1.83%. This is because the Most Accurate estimate is pegged marginally lower at $1.01 per share than the Zacks Consensus Estimate of $1.03. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Zacks Rank : J.B. Hunt has a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise. Thus, a negative Earnings ESP in this case leaves the surprise prediction inconclusive.
We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
J.B. Hunt Transport Services, Inc. Price and EPS Surprise
J.B. Hunt Transport Services, Inc. Price and EPS Surprise | J.B. Hunt Transport Services, Inc. Quote
Stocks to Consider
Investors interested in the broader Transportation sector may consider American Airlines Group, Inc. AAL , Spirit Airlines, Inc. SAVE and JetBlue Airways Corporation JBLU stocks with the right combination of elements to beat on earnings in their next releases this time around.
American Airlines has an Earnings ESP of +1.27% and a Zacks Rank of 3. The company will report fourth-quarter earnings on Jan 25.
Spirit Airlines has an Earnings ESP of +2.39% and is a Zacks #3 Ranked player. The company is scheduled to announce fourth-quarter earnings on Feb 6. You can see the complete list of today's Zacks #1 Rank stocks here .
JetBlue has an Earnings ESP of +1.40% and the stock is a #3 Ranked player. The company will release fourth-quarter earnings on Jan 25.
Wall Street's Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It's a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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J.B. Hunt Transport Services, Inc. Price and EPS Surprise J.B. Hunt Transport Services, Inc. Price and EPS Surprise | J.B. Hunt Transport Services, Inc. Quote Stocks to Consider Investors interested in the broader Transportation sector may consider American Airlines Group, Inc. AAL , Spirit Airlines, Inc. SAVE and JetBlue Airways Corporation JBLU stocks with the right combination of elements to beat on earnings in their next releases this time around. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report To read this article on Zacks.com click here. Factors at Play High labor costs are likely to hurt the company's fourth-quarter results, ditto the previous quarter.
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J.B. Hunt Transport Services, Inc. Price and EPS Surprise J.B. Hunt Transport Services, Inc. Price and EPS Surprise | J.B. Hunt Transport Services, Inc. Quote Stocks to Consider Investors interested in the broader Transportation sector may consider American Airlines Group, Inc. AAL , Spirit Airlines, Inc. SAVE and JetBlue Airways Corporation JBLU stocks with the right combination of elements to beat on earnings in their next releases this time around. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report To read this article on Zacks.com click here. The transportation company's earnings of 91 cents per share missed the Zacks Consensus Estimate of 96 cents.
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J.B. Hunt Transport Services, Inc. Price and EPS Surprise J.B. Hunt Transport Services, Inc. Price and EPS Surprise | J.B. Hunt Transport Services, Inc. Quote Stocks to Consider Investors interested in the broader Transportation sector may consider American Airlines Group, Inc. AAL , Spirit Airlines, Inc. SAVE and JetBlue Airways Corporation JBLU stocks with the right combination of elements to beat on earnings in their next releases this time around. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report To read this article on Zacks.com click here. The transportation company's earnings of 91 cents per share missed the Zacks Consensus Estimate of 96 cents.
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J.B. Hunt Transport Services, Inc. Price and EPS Surprise J.B. Hunt Transport Services, Inc. Price and EPS Surprise | J.B. Hunt Transport Services, Inc. Quote Stocks to Consider Investors interested in the broader Transportation sector may consider American Airlines Group, Inc. AAL , Spirit Airlines, Inc. SAVE and JetBlue Airways Corporation JBLU stocks with the right combination of elements to beat on earnings in their next releases this time around. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report To read this article on Zacks.com click here. Last quarter, the company delivered a negative earnings surprise of 5.2%.
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7202.0
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2018-01-15 00:00:00 UTC
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Will High Volumes Aid Canadian Pacific's (CP) Q4 Earnings?
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AAL
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https://www.nasdaq.com/articles/will-high-volumes-aid-canadian-pacifics-cp-q4-earnings-2018-01-15
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nan
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nan
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Canadian Pacific Railway LimitedCP is scheduled to report fourth-quarter 2017 results on Jan 18 after the market closes .
Last quarter, the company reported in-line earnings and lower-than-expected revenues. However, both the bottom and the top line improved substantially from the year-ago figures.
Let's see how things shape up this earnings season.
Why a Likely Positive Surprise?
Our proven model shows that Canadian Pacific is likely to beat on earnings this quarter on the back of a perfect combination of the following two key ingredients:
Zacks ESP : Canadian Pacific has an Earnings ESP of +0.27%. A positive Zacks ESP serves as an indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Zacks Rank : Canadian Pacific carries a Zacks Rank #3 (Hold). Note that stocks with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have significantly higher chances of beating estimates.
Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is witnessing negative estimate revisions.
Canadian Pacific Railway Limited Price and EPS Surprise
Canadian Pacific Railway Limited price-eps-surprise | Canadian Pacific Railway Limited Quote
What is Driving the Better-than-Expected Earnings?
The company's cost-cutting efforts are expected to drive its bottom-line growth in the fourth quarter. This is likely to boost its operating ratio as well, similar to the previous quarter.
Additionally, increased volumes are anticipated to buoy results in the quarter. Notably, the company raised guidance for 2017 on the back of increased volumes. Canadian Pacific now expects a double-digit rise in adjusted earnings per share for 2017 compared with C$10.29 in 2016.
The improved coal scenario is a further positive, which is likely to benefit the top line in the to-be-reported quarter.
Moreover, the company's initiatives to reward investors through share buybacks and hiked dividend payments are impressive.
However, declining revenues at the automotive and intermodal unit may hurt results in the quarter.
Other Stocks to Consider
Investors also interested in the broader Transportation sector may check out American Airlines Group, Inc. AAL , Spirit Airlines, Inc. SAVE and JetBlue Airways Corporation JBLU stocks comprising the right combination of elements to surpass estimates this time around:
American Airlines has an Earnings ESP of +1.27% and a Zacks Rank of 3. The company will report fourth-quarter earnings on Jan 25.
Spirit Airlines has an Earnings ESP of +2.39% and is a Zacks #3 Ranked player. The company is scheduled to report fourth-quarter earnings on Feb 6. You can see the complete list of today's Zacks #1 Rank stocks here .
JetBlue has an Earnings ESP of +1.40% and the stock is a #3 Ranked player. The company will report fourth-quarter earnings on Jan 25.
Wall Street's Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It's a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Canadian Pacific Railway Limited (CP): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
Other Stocks to Consider Investors also interested in the broader Transportation sector may check out American Airlines Group, Inc. AAL , Spirit Airlines, Inc. SAVE and JetBlue Airways Corporation JBLU stocks comprising the right combination of elements to surpass estimates this time around: American Airlines has an Earnings ESP of +1.27% and a Zacks Rank of 3. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Canadian Pacific Railway Limited (CP): Free Stock Analysis Report To read this article on Zacks.com click here. Canadian Pacific Railway LimitedCP is scheduled to report fourth-quarter 2017 results on Jan 18 after the market closes .
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Other Stocks to Consider Investors also interested in the broader Transportation sector may check out American Airlines Group, Inc. AAL , Spirit Airlines, Inc. SAVE and JetBlue Airways Corporation JBLU stocks comprising the right combination of elements to surpass estimates this time around: American Airlines has an Earnings ESP of +1.27% and a Zacks Rank of 3. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Canadian Pacific Railway Limited (CP): Free Stock Analysis Report To read this article on Zacks.com click here. Canadian Pacific Railway Limited Price and EPS Surprise Canadian Pacific Railway Limited price-eps-surprise | Canadian Pacific Railway Limited Quote What is Driving the Better-than-Expected Earnings?
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Other Stocks to Consider Investors also interested in the broader Transportation sector may check out American Airlines Group, Inc. AAL , Spirit Airlines, Inc. SAVE and JetBlue Airways Corporation JBLU stocks comprising the right combination of elements to surpass estimates this time around: American Airlines has an Earnings ESP of +1.27% and a Zacks Rank of 3. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Canadian Pacific Railway Limited (CP): Free Stock Analysis Report To read this article on Zacks.com click here. Our proven model shows that Canadian Pacific is likely to beat on earnings this quarter on the back of a perfect combination of the following two key ingredients: Zacks ESP : Canadian Pacific has an Earnings ESP of +0.27%.
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Other Stocks to Consider Investors also interested in the broader Transportation sector may check out American Airlines Group, Inc. AAL , Spirit Airlines, Inc. SAVE and JetBlue Airways Corporation JBLU stocks comprising the right combination of elements to surpass estimates this time around: American Airlines has an Earnings ESP of +1.27% and a Zacks Rank of 3. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Canadian Pacific Railway Limited (CP): Free Stock Analysis Report To read this article on Zacks.com click here. Canadian Pacific now expects a double-digit rise in adjusted earnings per share for 2017 compared with C$10.29 in 2016.
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7203.0
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2018-01-13 00:00:00 UTC
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2 More Airlines Just Raised Their Revenue Guidance
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AAL
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https://www.nasdaq.com/articles/2-more-airlines-just-raised-their-revenue-guidance-2018-01-13
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nan
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nan
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With demand surging and pricing discipline improving across the industry, virtually every major airline in the U.S. has raised its fourth-quarter unit revenue guidance since early December. Last week, American Airlines (NASDAQ: AAL) joined the club -- while JetBlue Airways (NASDAQ: JBLU) boosted its forecast for the second time.
Stronger revenue performance will allow American Airlines and JetBlue to mitigate some of the margin pressure that they are facing due to rising fuel and labor costs. The key question for investors now is whether the carriers can continue driving strong growth in revenue per available seat mile (RASM) during 2018.
American Airlines delivers industry-leading unit revenue growth
Back in October, American Airlines projected that RASM would rise 2.5%-4.5% in the fourth quarter. This was the strongest revenue forecast provided by any major airline. However, American Airlines was still able to beat its guidance.
On Wednesday, American Airlines revealed that it now expects to report a 5%-6% RASM increase for Q4. The company's guidance for non-fuel unit costs also improved slightly, as flight cancellations came in lower than expected. On the other hand, American increased its estimate for jet fuel costs by $0.08 per gallon, as fuel prices rose during the quarter.
The net result is that American Airlines has increased its Q4 adjusted pre-tax margin forecast range from 4.5%-6.5% to 6.5%-7%. Still, that would be down from 7.9% a year earlier.
JetBlue salvages its fourth-quarter performance
Unlike American Airlines, JetBlue entered Q4 with a very weak unit revenue trajectory. JetBlue has a huge footprint in the Caribbean (especially Puerto Rico) and Florida, so it was hit harder than any other airline by the devastation of Hurricanes Irma and Maria. In late October, the carrier estimated that RASM would be flat or decline up to 3% in the fourth quarter.
Fortunately, demand for trips to Florida bounced back quickly. Furthermore, in the aftermath of Hurricane Maria, JetBlue began to shift capacity from the Caribbean to other leisure markets in order to match demand trends.
As a result, JetBlue raised its RASM guidance by about 2 percentage points last month. Even this was too conservative. JetBlue announced on Thursday that RASM actually rose by about 1.8% last quarter, exceeding the high end of its updated guidance range.
Even with 1.8% RASM growth, JetBlue experienced severe margin deterioration last quarter. The combination of rising fuel prices, hurricane-related costs, wage increases, a $1,000 "tax reform" bonus awarded to JetBlue employees, and the timing of certain expenses will drive all-in unit costs up by about 11% in Q4. While JetBlue doesn't provide formal margin guidance, it seems likely to post a pre-tax margin of 9%-10% for the fourth quarter, down from 16.7% a year earlier.
Despite recent margin pressure, JetBlue is a better bet for 2018
While American Airlines ended 2017 with strong unit revenue momentum, it will face tough year-over-year comparisons in 2018. This could slow its RASM growth. Rising competition from United Continental -- particularly in Chicago and Los Angeles -- could create additional pressure.
Furthermore, during the first three quarters of 2017, American Airlines benefited from its large footprint in Latin America, posting double-digit unit revenue growth in that region. It's unlikely that American can repeat that performance in 2018, especially since the strong revenue environment there is sure to attract competition. For example, Delta Air Lines recently started flying from New York to Rio de Janeiro, breaking American Airlines' monopoly on that route.
By contrast, JetBlue's unit revenue growth seems likely to accelerate during 2018 . Whereas American is set to end 2017 with full-year RASM growth of roughly 4%, JetBlue's full-year RASM growth will be a little more than 1%, giving it much easier year-over-year comparisons going forward.
To be sure, JetBlue faces competitive headwinds of its own, such as Delta's steady growth in Boston. That said, it faced unusual revenue challenges last year related to air traffic control delays and the hurricanes, and these issues aren't likely to impact 2018. The recent expansion of its Mint premium service should provide an extra unit revenue lift in 2018, as well.
With jet fuel prices currently up about $0.40 per gallon year over year, airlines will need mid-single-digit RASM growth to hold their pre-tax margins steady this year. JetBlue seems more likely to achieve that than American. Given that it is also starting with higher profitability and a far stronger balance sheet, JetBlue seems like a much better investment than American Airlines right now.
10 stocks we like better than JetBlue Airways
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David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and JetBlue Airways wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of January 2, 2018
Adam Levine-Weinberg owns shares of Delta Air Lines and JetBlue Airways and is long January 2019 $10 calls on JetBlue Airways. The Motley Fool recommends JetBlue Airways. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Last week, American Airlines (NASDAQ: AAL) joined the club -- while JetBlue Airways (NASDAQ: JBLU) boosted its forecast for the second time. With demand surging and pricing discipline improving across the industry, virtually every major airline in the U.S. has raised its fourth-quarter unit revenue guidance since early December. Stronger revenue performance will allow American Airlines and JetBlue to mitigate some of the margin pressure that they are facing due to rising fuel and labor costs.
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Last week, American Airlines (NASDAQ: AAL) joined the club -- while JetBlue Airways (NASDAQ: JBLU) boosted its forecast for the second time. American Airlines delivers industry-leading unit revenue growth Back in October, American Airlines projected that RASM would rise 2.5%-4.5% in the fourth quarter. On the other hand, American increased its estimate for jet fuel costs by $0.08 per gallon, as fuel prices rose during the quarter.
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Last week, American Airlines (NASDAQ: AAL) joined the club -- while JetBlue Airways (NASDAQ: JBLU) boosted its forecast for the second time. American Airlines delivers industry-leading unit revenue growth Back in October, American Airlines projected that RASM would rise 2.5%-4.5% in the fourth quarter. JetBlue salvages its fourth-quarter performance Unlike American Airlines, JetBlue entered Q4 with a very weak unit revenue trajectory.
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Last week, American Airlines (NASDAQ: AAL) joined the club -- while JetBlue Airways (NASDAQ: JBLU) boosted its forecast for the second time. Stronger revenue performance will allow American Airlines and JetBlue to mitigate some of the margin pressure that they are facing due to rising fuel and labor costs. American Airlines delivers industry-leading unit revenue growth Back in October, American Airlines projected that RASM would rise 2.5%-4.5% in the fourth quarter.
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7204.0
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2018-01-12 00:00:00 UTC
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3 Airline Stocks to Short as They Fly Too High
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AAL
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https://www.nasdaq.com/articles/3-airline-stocks-short-they-fly-too-high-2018-01-12
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
While stocks have been on an absolute bull run over the past few months, airline stocks have been on an even bigger move higher. Since making lows in mid November, shares of airline stocks have surged 16%, doubling the 8% gain in the S& P 500 .
Certainly some of the gains are warranted, as tax benefits and improving business are decided benefits to future earnings. But the magnitude of the rally in the major airline names, combined with the fact that oil prices are at recent highs, should provide some headwinds to any further big gains in the airline stocks.
To be sure, I am not looking for any sort of serious decline in the following Big 3 of the airline industry, but instead just a tempering of the recent red-hot rally. Option implied volatility (IV) is still well above average, meaning option prices are still comparatively expensive. This makes option-selling strategies, such as bear call spreads, still very viable.
10 Worry-Free Dividend Stocks With Rising Payouts
So without further ado, here are three airline stocks to consider shorting now.
Airline Stocks to Short: American Airlines Group Inc (AAL)
There is no disputing that the fundamentals have improved for American Airlines Group Inc (NASDAQ: AAL ). Most metrics, outside of fuel costs, are on the upswing and the company did just up guidance slightly. The question now is how much further the rally can go, especially given the less-than-stellar technical backdrop.
American Airlines is getting decidedly overbought from a 14-day RSI perspective, with readings now exceeding 75. The only other time in the past year AAL was this exuberant proved to be a significant intermediate term high in the stock. Although shares did break out to the upside, I expect a retest of the old highs around the $54 level over the coming weeks.
Buy AAL Feb $65 calls and sell AAL Feb $60 calls for a 70-cent net credit.
Maximum gain on the trade is $70 per spread with maximum risk of $430 per spread. Return on risk is 16.27%. The short $60 strike price provides a 6.3% upside cushion to the $56.42 closing price of AAL stock.
Airline Stocks to Short: United Continental (UAL)
In a similar fashion to American Airlines, United Continental Holdings Inc (NYSE: UAL ) has also seen an improving business environment and raised guidance. This helped fuel the recent strong rally in the underlying shares. But with fuel being such a large overall costs to the bottom line for airline stocks, one has to wonder how big a bite higher oil will take out of airline profits.
UAL stock is also getting extremely overbought, with RSI levels now well over 80. The only time readings were this high in the past 12 months coincided with a top in the stock. I look for United to consolidate over the coming few weeks.
Buy UAL Feb $85 calls and sell UAL Feb $82.50 calls for a 35 cents net credit.
7 High-Risk, High-Reward Stocks to Buy Now
Maximum gain in the trade is $35 per spread with maximum risk of $215 per spread. Return on risk is 16.27%. The short $82.50 strike price provides a 7.9% upside cushion to the $76.45 closing price of UAL stock.
Airline Stocks to Short: Delta (DAL)
Delta Air Lines, Inc. (NYSE: DAL ) just reported earnings , beating on both the top and bottom line. EPS was 96 cents versus 88 cents expectations, while revenues beat by a much lesser amount at $10.25 billion versus $10.13 billion estimates. Guidance was upped, but the pesky fuel costs rose more than 20% in the quarter, a decided negative.
DAL is also fast approaching overbought levels as RSI nears 70. This has been a reliable indication of short-term tops in the stock, as seen in the chart. I look for Delta to level off around current levels post earnings.
Buy DAL Feb $65 calls and sell DAL Feb $62.50 calls for a 33 cents net credit.
Maximum gain in the trade is $33 per spread with maximum risk of $217 per spread. Return on risk is 15.2%. The short $62.50 strike price provides a 6.8% upside cushion to the $58.52 closing price of DAL stock.
As of this writing, Tim Biggam did not hold a position in any of the aforementioned securities. Anyone interested in finding out more about option-based strategies or for a free trial of the Delta Desk Research Report can email Tim at timbiggam@gmail.com.
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The post 3 Airline Stocks to Short as They Fly Too High appeared first on InvestorPlace .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The only other time in the past year AAL was this exuberant proved to be a significant intermediate term high in the stock. Airline Stocks to Short: American Airlines Group Inc (AAL) There is no disputing that the fundamentals have improved for American Airlines Group Inc (NASDAQ: AAL ). Buy AAL Feb $65 calls and sell AAL Feb $60 calls for a 70-cent net credit.
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Airline Stocks to Short: American Airlines Group Inc (AAL) There is no disputing that the fundamentals have improved for American Airlines Group Inc (NASDAQ: AAL ). The only other time in the past year AAL was this exuberant proved to be a significant intermediate term high in the stock. Buy AAL Feb $65 calls and sell AAL Feb $60 calls for a 70-cent net credit.
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Airline Stocks to Short: American Airlines Group Inc (AAL) There is no disputing that the fundamentals have improved for American Airlines Group Inc (NASDAQ: AAL ). The only other time in the past year AAL was this exuberant proved to be a significant intermediate term high in the stock. Buy AAL Feb $65 calls and sell AAL Feb $60 calls for a 70-cent net credit.
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Airline Stocks to Short: American Airlines Group Inc (AAL) There is no disputing that the fundamentals have improved for American Airlines Group Inc (NASDAQ: AAL ). The only other time in the past year AAL was this exuberant proved to be a significant intermediate term high in the stock. Buy AAL Feb $65 calls and sell AAL Feb $60 calls for a 70-cent net credit.
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7205.0
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2018-01-12 00:00:00 UTC
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Is American Airlines Group (AAL) a Great Stock for Value Investors?
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AAL
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https://www.nasdaq.com/articles/is-american-airlines-group-aal-a-great-stock-for-value-investors-2018-01-12
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nan
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nan
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Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn't want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let's put American Airlines Group Inc.AAL stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock's current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, American Airlines Group has a trailing twelve months PE ratio of 11.6, as you can see in the chart below:
We should also point out that American Airlines Group has a forward PE ratio (price relative to this year's earnings) of just 10.8, so it is fair to say that a slightly more value-oriented path may be ahead for American Airlines Group's stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock's price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, American Airlines Group has a P/S ratio of about 0.7. This is significantly lower than the S&P 500 average, which comes in at 3.5 right now. Also, as we can see in the chart below, this is slightly below the highs for this stock in particular over the past few years.
If anything, this suggests some level of undervalued trading-at least compared to historical norms.
Broad Value Outlook
In aggregate, American Airlines Group currently has a Value Style Score of A, putting it into the top 20% of all stocks we cover from this look. This makes AAL a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the P/CF ratio (another great indicator of value) comes in at 5.7, which is marginally better than the industry average of 5.9. Clearly, AAL is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though American Airlines Group might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of D and a Momentum score of B. This gives AAL a VGM score-or its overarching fundamental grade-of B. (You can read more about the Zacks Style Scores here >> )
Meanwhile, the company's recent earnings estimates have been encouraging. The current quarter has seen three estimates go higher in the past sixty days and one lower, while the full-year 2017 estimate has seen four upward and one downward revisions in the same time period.
This has had a favorable impact on the consensus estimate, as the current quarter consensus estimate has risen about 2.8% in the past two months, while the full-year 2017 estimate has inched up 0.6%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
American Airlines Group, Inc. Price and Consensus
American Airlines Group, Inc. Price and Consensus | American Airlines Group, Inc. Quote
The stock holds a Zacks Rank #3 (Hold), which indicates expectations of in-line performance from the company in the near term. However, American Airlines Group is enjoying somewhat of a bullish analyst sentiment, as indicated by the positive estimate revisions, and this works in the company's favor.
Bottom Line
American Airlines Group is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, a decent industry rank (top 30% out of more than 250 industries) further supports the growth potential of the stock. However, with a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past one year, the sector has clearly underperformed the broader market, as you can see below:
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Download it free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Let's put American Airlines Group Inc.AAL stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks: PE Ratio A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This makes AAL a solid choice for value investors, and some of its other key metrics make this pretty clear too. Clearly, AAL is a solid choice on the value front from multiple angles.
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Let's put American Airlines Group Inc.AAL stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks: PE Ratio A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. This makes AAL a solid choice for value investors, and some of its other key metrics make this pretty clear too.
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Let's put American Airlines Group Inc.AAL stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks: PE Ratio A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This makes AAL a solid choice for value investors, and some of its other key metrics make this pretty clear too. Clearly, AAL is a solid choice on the value front from multiple angles.
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Let's put American Airlines Group Inc.AAL stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks: PE Ratio A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This makes AAL a solid choice for value investors, and some of its other key metrics make this pretty clear too. Clearly, AAL is a solid choice on the value front from multiple angles.
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7206.0
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2018-01-12 00:00:00 UTC
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Will Cost-Reduction Initiatives Benefit CSX in Q4 Earnings?
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AAL
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https://www.nasdaq.com/articles/will-cost-reduction-initiatives-benefit-csx-in-q4-earnings-2018-01-12
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nan
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nan
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CSX CorporationCSX is slated to report fourth-quarter 2017 earnings results on Jan 16 after the market closes .
Last quarter, the company reported earnings of 51 cents per share, in line with the Zacks Consensus Estimate. The bottom line came in at 6.3% higher than the year-ago figure. Revenues of $2,743 million missed the Zacks Consensus Estimate of $2,769.4 million. However, the top line inched up 1.2% year over year owing to core pricing gains.
Let's see, how things shape up this earnings season.
Why a Likely Positive Surprise?
Our proven model shows that CSX is likely to beat on earnings this quarter on the back of a perfect combination of the two following key ingredients:
Zacks ESP : CSX has an Earnings ESP of +0.14%, representing the difference between the Most Accurate estimate and the Zacks Consensus Estimate. A positive Zacks ESP serves as an indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Zacks Rank : CSX carries a Zacks Rank #3 (Hold). Note that stocks with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have significantly higher chances of beating estimates.
Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.
CSX Corporation Price and EPS Surprise
CSX Corporation Price and EPS Surprise | CSX Corporation Quote
What is Driving the Better-than-Expected Earnings?
The company's cost-cutting efforts to drive the bottom-line growth are expected to aid results in the fourth quarter.
Additionally, the improved coal and intermodal scenario is anticipated to boost results in the quarter. Evidently, the Zacks Consensus Estimate for fourth-quarter coal revenues is pegged at $534 million, higher than $514 million reported in the previous quarter. While the consensus mark for intermodal revenues stands at $488 million, above the reported base of $446 million in the third quarter.
The company's efforts to reward shareholders through dividend payments and buybacks are also impressive. In October, the company's board authorized $1.5 billion in share repurchases, an addition to the $1.5-billion program recently completed.
However, a sluggish automotive production may hamper results in the to-be-reported quarter. The company's high-debt levels are also worrisome.
Other Stocks to Consider
Investors interested in the broader Transportation sector may also consider American Airlines Group, Inc. AAL , Allegiant Travel Company ALGT and JetBlue Airways Corporation JBLU stocks with the right combination of elements to deliver an earnings beat in their next releases.
American Airlines has an Earnings ESP of +2.18% and a Zacks Rank #3. The company is expected to report fourth-quarter earnings on Jan 26.
Allegiant has an Earnings ESP of +0.06% and a Zacks Rank of 3. The company is scheduled to report fourth-quarter earnings on Jan 31.
JetBlue has an Earnings ESP of +3.46% and the stock is a Zacks #3 Ranked player. The company will report fourth-quarter earnings on Jan 25. You can see the complete list of today's Zacks #1 Rank stocks here .
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Download it free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
Allegiant Travel Company (ALGT): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
CSX Corporation (CSX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Other Stocks to Consider Investors interested in the broader Transportation sector may also consider American Airlines Group, Inc. AAL , Allegiant Travel Company ALGT and JetBlue Airways Corporation JBLU stocks with the right combination of elements to deliver an earnings beat in their next releases. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Allegiant Travel Company (ALGT): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis Report To read this article on Zacks.com click here. The company's cost-cutting efforts to drive the bottom-line growth are expected to aid results in the fourth quarter.
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Other Stocks to Consider Investors interested in the broader Transportation sector may also consider American Airlines Group, Inc. AAL , Allegiant Travel Company ALGT and JetBlue Airways Corporation JBLU stocks with the right combination of elements to deliver an earnings beat in their next releases. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Allegiant Travel Company (ALGT): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis Report To read this article on Zacks.com click here. CSX Corporation Price and EPS Surprise CSX Corporation Price and EPS Surprise | CSX Corporation Quote What is Driving the Better-than-Expected Earnings?
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Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Allegiant Travel Company (ALGT): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis Report To read this article on Zacks.com click here. Other Stocks to Consider Investors interested in the broader Transportation sector may also consider American Airlines Group, Inc. AAL , Allegiant Travel Company ALGT and JetBlue Airways Corporation JBLU stocks with the right combination of elements to deliver an earnings beat in their next releases. Last quarter, the company reported earnings of 51 cents per share, in line with the Zacks Consensus Estimate.
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Other Stocks to Consider Investors interested in the broader Transportation sector may also consider American Airlines Group, Inc. AAL , Allegiant Travel Company ALGT and JetBlue Airways Corporation JBLU stocks with the right combination of elements to deliver an earnings beat in their next releases. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Allegiant Travel Company (ALGT): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis Report To read this article on Zacks.com click here. Last quarter, the company reported earnings of 51 cents per share, in line with the Zacks Consensus Estimate.
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7207.0
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2018-01-11 00:00:00 UTC
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Wal-Mart Hikes Minimum Wage To $11 As Tax Cuts Trickle Down To Workers
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AAL
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https://www.nasdaq.com/articles/wal-mart-hikes-minimum-wage-11-tax-cuts-trickle-down-workers-2018-01-11
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nan
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nan
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Wal-Mart ( WMT ) said it will raise its starting wage to $11 an hour as part of an initial plan to "share in tax savings" with 1 million employees.
[ibd-display-video id=3076727 width=50 float=left autostart=true] The retail giant said the wage hike will cost it $300 million in the coming fiscal year, beyond its already-planned wage increases. Wal-Mart also said it will spend another $400 million in the current year ending Jan. 31 on one-time bonuses ranging from $200 to $1,000 based on length of service.
As the nation's largest private employer, Wal-Mart has a big influence on working-class wages, so its pay hike could result in increases for many other workers in modest-pay industries.
Shares of Wal-Mart fell 1 cent to 99.66 on the stock market today . Wal-Mart has been flirting with a 100.23 flat-base buy point, but the stock's relative strength line has been lagging while the major averages continue to climb.
The Dow Jones industrial average, Nasdaq composite and S&P 500 index all were up about 0.2%-0.3% in the early going after the Nasdaq and S&P 500 suffered their first loss of 2018 on Wednesday.
On Wednesday, Waste Management ( WM ) joined the parade of companies providing bonuses or wage hikes on the heels of tax cuts, saying up to 34,000 employees would get a $2,000 bonus . With Wal-Mart's moves, companies are crediting the tax cuts for providing additional pay to more than 2 million workers.
Among the biggest announcements have been $1,000 bonus awards by American Airlines ( AAL ) (127,000 employees); AT&T ( T ) (200,000); Bank of America ( BAC ) (145,000); and Comcast (CMCSA) (100,000). The generosity of those announcements was undercut somewhat by reports that AT&T and Comcast were in the midst of layoffs.
In addition, utilities are implementing modest cuts to the power bills of millions of customers .
IBD'S TAKE:Wal-Mart is ranked No. 2 by IBD in the Retail-Major Discount Chains industry group, based on earnings, sales, margin and stock performance trends. Visit IBD Stock Checkup to see how other retailers stack up. The Retail-Major Discount Chains group is ranked No. 41 of 197 industry groups based on stock performance.As long as the current " confirmed uptrend " - the equivalent of a green light - stays in place, leading stocks breaking above a buy point are more likely than not to have the wind at their backs. Here's a good place to start looking for stocks that may be poised to move higher.
Wal-Mart also announced additional benefits for full-time hourly associates, including 10 weeks of paid maternity leave and six weeks of paid parental leave, as well as adoption assistance of $5,000.
Wal-Mart's wage hike follows one by Target (TGT), which increased its minimum wage to $11 an hour starting last October. At the same time, Target made a commitment to raise its base wage to $15 an hour by the end of 2020.
In January 2016, Wal-Mart said it would hike its minimum wage for nearly all employees to $10 an hour, but it kept its starting wage at $9 an hour for employees in their first six months.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Among the biggest announcements have been $1,000 bonus awards by American Airlines ( AAL ) (127,000 employees); AT&T ( T ) (200,000); Bank of America ( BAC ) (145,000); and Comcast (CMCSA) (100,000). Wal-Mart ( WMT ) said it will raise its starting wage to $11 an hour as part of an initial plan to "share in tax savings" with 1 million employees. As the nation's largest private employer, Wal-Mart has a big influence on working-class wages, so its pay hike could result in increases for many other workers in modest-pay industries.
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Among the biggest announcements have been $1,000 bonus awards by American Airlines ( AAL ) (127,000 employees); AT&T ( T ) (200,000); Bank of America ( BAC ) (145,000); and Comcast (CMCSA) (100,000). With Wal-Mart's moves, companies are crediting the tax cuts for providing additional pay to more than 2 million workers. 2 by IBD in the Retail-Major Discount Chains industry group, based on earnings, sales, margin and stock performance trends.
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Among the biggest announcements have been $1,000 bonus awards by American Airlines ( AAL ) (127,000 employees); AT&T ( T ) (200,000); Bank of America ( BAC ) (145,000); and Comcast (CMCSA) (100,000). Wal-Mart's wage hike follows one by Target (TGT), which increased its minimum wage to $11 an hour starting last October. In January 2016, Wal-Mart said it would hike its minimum wage for nearly all employees to $10 an hour, but it kept its starting wage at $9 an hour for employees in their first six months.
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Among the biggest announcements have been $1,000 bonus awards by American Airlines ( AAL ) (127,000 employees); AT&T ( T ) (200,000); Bank of America ( BAC ) (145,000); and Comcast (CMCSA) (100,000). Wal-Mart ( WMT ) said it will raise its starting wage to $11 an hour as part of an initial plan to "share in tax savings" with 1 million employees. With Wal-Mart's moves, companies are crediting the tax cuts for providing additional pay to more than 2 million workers.
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7208.0
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2018-01-11 00:00:00 UTC
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AAL March 2nd Options Begin Trading
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AAL
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https://www.nasdaq.com/articles/aal-march-2nd-options-begin-trading-2018-01-11
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nan
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nan
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Investors in American Airlines Group Inc (Symbol: AAL) saw new options begin trading today, for the March 2nd expiration. At Stock Options Channel , our YieldBoost formula has looked up and down the AAL options chain for the new March 2nd contracts and identified one put and one call contract of particular interest.
The put contract at the $52.50 strike price has a current bid of $1.00. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $52.50, but will also collect the premium, putting the cost basis of the shares at $51.50 (before broker commissions). To an investor already interested in purchasing shares of AAL, that could represent an attractive alternative to paying $55.16/share today.
Because the $52.50 strike represents an approximate 5% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract . Should the contract expire worthless, the premium would represent a 1.90% return on the cash commitment, or 13.90% annualized - at Stock Options Channel we call this the YieldBoost .
Below is a chart showing the trailing twelve month trading history for American Airlines Group Inc, and highlighting in green where the $52.50 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $55.50 strike price has a current bid of 95 cents. If an investor was to purchase shares of AAL stock at the current price level of $55.16/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $55.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 2.34% if the stock gets called away at the March 2nd expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if AAL shares really soar, which is why looking at the trailing twelve month trading history for American Airlines Group Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAL's trailing twelve month trading history, with the $55.50 strike highlighted in red:
Considering the fact that the $55.50 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract , Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 1.72% boost of extra return to the investor, or 12.57% annualized, which we refer to as the YieldBoost .
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 253 trading day closing values as well as today's price of $55.16) to be 29%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the Nasdaq 100 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Of course, a lot of upside could potentially be left on the table if AAL shares really soar, which is why looking at the trailing twelve month trading history for American Airlines Group Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAL's trailing twelve month trading history, with the $55.50 strike highlighted in red: Considering the fact that the $55.50 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in American Airlines Group Inc (Symbol: AAL) saw new options begin trading today, for the March 2nd expiration.
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Below is a chart showing AAL's trailing twelve month trading history, with the $55.50 strike highlighted in red: Considering the fact that the $55.50 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in American Airlines Group Inc (Symbol: AAL) saw new options begin trading today, for the March 2nd expiration. At Stock Options Channel , our YieldBoost formula has looked up and down the AAL options chain for the new March 2nd contracts and identified one put and one call contract of particular interest.
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Below is a chart showing AAL's trailing twelve month trading history, with the $55.50 strike highlighted in red: Considering the fact that the $55.50 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in American Airlines Group Inc (Symbol: AAL) saw new options begin trading today, for the March 2nd expiration. At Stock Options Channel , our YieldBoost formula has looked up and down the AAL options chain for the new March 2nd contracts and identified one put and one call contract of particular interest.
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At Stock Options Channel , our YieldBoost formula has looked up and down the AAL options chain for the new March 2nd contracts and identified one put and one call contract of particular interest. Below is a chart showing AAL's trailing twelve month trading history, with the $55.50 strike highlighted in red: Considering the fact that the $55.50 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in American Airlines Group Inc (Symbol: AAL) saw new options begin trading today, for the March 2nd expiration.
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7209.0
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2018-01-11 00:00:00 UTC
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Delta's Bullish Earnings, Outlook Back Signs Of Strong Airline Demand
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AAL
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https://www.nasdaq.com/articles/deltas-bullish-earnings-outlook-back-signs-strong-airline-demand-2018-01-11
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nan
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nan
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Delta Air Lines ( DAL ) on Thursday reported fourth-quarter earnings that easily topped views and dramatically raised its 2018 profit guidance, adding to indications of more robust demand across the industry.
[ibd-display-video id=3076727 width=50 float=left autostart=true] The results follow earlier signs from American Airlines ( AAL ) and United Airlines ( UAL ) that their pricing power has improved.
In Q4, Delta's earnings per share climbed 17% to 96 cents, beating estimates for 88 cents, as revenue increased 8% to $10.245 billion, topping views for $10.16 billion. Passenger unit revenue grew 4.2% vs. Delta's forecast for an increase around 4%.
The results exclude a one-time charge of $150 million from the inclusion of foreign earnings and revaluation of deferred tax assets and liabilities, following tax reform.
Delta now sees 2018 EPS at $6.35-$6.70, up from a prior view of $5.35-$5.70 and well above the consensus for $5.75, on total revenue growth of 4%-6%. Its corporate tax rate should hit 22%-24%.
For Q1, Delta sees EPS of 60-80 cents, below consensus for 82 cents, on unit revenue growth of 2.5%-4.5%, with capacity up about 3%.
"We enter 2018 with significant momentum and every entity delivering positive passenger unit revenue for the first time in five years, driven by a robust demand environment and improving business fares," said Delta President Glen Hauenstein in a statement.
CFO Paul Jacobson said Delta will focus this year on getting unit cost trajectory back in line with Delta's long-term 0%-2% target, with Q1 expected to be the peak of nonfuel expense growth.
Delta shares surged 4.8% to 58.52 on the stock market today , rising above buy range. American climbed 4.9% to 56.42, clearing a 53.84 buy point, though its relative strength line still lags. United rallied 4.6% after jumping 6.7% Wednesday, and Southwest Airlines ( LUV ) added 3%, extended beyond buy range once again.
IBD'S TAKE : With thousands of publicly traded companies to choose from, how can you quickly find the best stocks to buy right now? A good starting point is to regularly reviewscreens that highlight the top-rated equities.
Fourth-quarter forecasts this week from American and United have signaled that ticket prices, from their standpoint, have improved, meaning they've been able to charge passengers more or discount less. American also said that close-in demand domestically had been higher than anticipated.
But higher fuel costs could hurt margins this year. Costs have become more of a focus for analysts in recent months - after pay raises and fuel pushed expenses higher last year - and they may keep a tighter lens on how well airlines can manage their nonfuel expenses.
But recent tax cuts are helping the airlines' customers, especially big corporations, and Bank of America Merrill Lynch analysts said earlier this week that Delta, United and American should see more business and international travel.
More domestic-focused carriers like Southwest, however, will likely be outperformed by the big three legacy airlines, the analysts added.
YOU MIGHT BE INTERESTED IN:
Airline Industry News And Stocks To Watch
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Looking For The Best Stocks To Buy And Watch? Start Here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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[ibd-display-video id=3076727 width=50 float=left autostart=true] The results follow earlier signs from American Airlines ( AAL ) and United Airlines ( UAL ) that their pricing power has improved. Delta Air Lines ( DAL ) on Thursday reported fourth-quarter earnings that easily topped views and dramatically raised its 2018 profit guidance, adding to indications of more robust demand across the industry. "We enter 2018 with significant momentum and every entity delivering positive passenger unit revenue for the first time in five years, driven by a robust demand environment and improving business fares," said Delta President Glen Hauenstein in a statement.
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[ibd-display-video id=3076727 width=50 float=left autostart=true] The results follow earlier signs from American Airlines ( AAL ) and United Airlines ( UAL ) that their pricing power has improved. In Q4, Delta's earnings per share climbed 17% to 96 cents, beating estimates for 88 cents, as revenue increased 8% to $10.245 billion, topping views for $10.16 billion. For Q1, Delta sees EPS of 60-80 cents, below consensus for 82 cents, on unit revenue growth of 2.5%-4.5%, with capacity up about 3%.
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[ibd-display-video id=3076727 width=50 float=left autostart=true] The results follow earlier signs from American Airlines ( AAL ) and United Airlines ( UAL ) that their pricing power has improved. CFO Paul Jacobson said Delta will focus this year on getting unit cost trajectory back in line with Delta's long-term 0%-2% target, with Q1 expected to be the peak of nonfuel expense growth. But recent tax cuts are helping the airlines' customers, especially big corporations, and Bank of America Merrill Lynch analysts said earlier this week that Delta, United and American should see more business and international travel.
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[ibd-display-video id=3076727 width=50 float=left autostart=true] The results follow earlier signs from American Airlines ( AAL ) and United Airlines ( UAL ) that their pricing power has improved. Passenger unit revenue grew 4.2% vs. Delta's forecast for an increase around 4%. Delta shares surged 4.8% to 58.52 on the stock market today , rising above buy range.
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7210.0
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2018-01-11 00:00:00 UTC
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American Airlines' (AAL) Shares Rise on Bullish Q4 Outlook
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AAL
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https://www.nasdaq.com/articles/american-airlines-aal-shares-rise-on-bullish-q4-outlook-2018-01-11
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nan
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nan
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American Airlines Group, Inc . AAL has issued an upbeat guidance for the fourth quarter of 2017. Following this, shares of the company were up 3.3% to $53.78 at the close of trading session on Jan 10.
The company now expects total revenue per available seat mile (TRASM) for the fourth quarter to rise in the range of 5-6% year over year. Previous view was an increase in the band of 2.5-4.5%. The improved outlook comes on the back of higher yields across all the geographical regions and better-than-expected domestic close-in bookings.
Additionally, the company now expects pre-tax margin between 6.5% and 7% for the to-be reported quarter. Earlier forecast was in the range of 4.5-6.5%.
Consolidated operating cost per available seat mile (CASM), excluding fuel and special items is anticipated to climb around 4% year over year, better than the previous prediction of a rise of 4.5%. Better-than-expected completion factor led to the improved guidance. For 2017, the same is expected to rise around 5.5%, higher than the past forecast of 5% growth.
American Airlines Group, Inc. Price
American Airlines Group, Inc. Price | American Airlines Group, Inc. Quote
Average fuel price per gallon (mainline jet fuel, including taxes) is estimated in the range of $1.88-$1.93 for the final quarter of 2017.
The company continues to expect capacity to inch up around 1% for 2017.
Further, the company expects to record a special non-cash credit of $10 million to income tax expense in the to-be-reported quarter. This is due to the impact of the recent tax reform on its deferred tax assets and liabilities.
Recently, another major airline, United Airlines, the wholly owned subsidiary of United Continental Holdings UAL , has also raised its guidance for the fourth quarter pertaining to unit revenues, costs and pre-tax margin.
American Airlines' robust guidance positively impacted other airline stocks like Delta Air Lines DAL too on Jan 10. Consequently, the NYSE ARCA airline index gained 1.7% on the day.
Zacks Rank & Key Pick
American Airlines carries a Zacks Rank #3 (Hold). A better-ranked stock in the airline space is Gol Linhas Aereas Inteligentes S.A. GOL sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Shares of Gol Linhas have soared more than 200%, respectively, in 2017.
Wall Street's Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It's a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report
Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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AAL has issued an upbeat guidance for the fourth quarter of 2017. Click to get this free report Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The improved outlook comes on the back of higher yields across all the geographical regions and better-than-expected domestic close-in bookings.
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Click to get this free report Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. AAL has issued an upbeat guidance for the fourth quarter of 2017. American Airlines Group, Inc. Price American Airlines Group, Inc. Price | American Airlines Group, Inc. Quote Average fuel price per gallon (mainline jet fuel, including taxes) is estimated in the range of $1.88-$1.93 for the final quarter of 2017.
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Click to get this free report Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. AAL has issued an upbeat guidance for the fourth quarter of 2017. American Airlines Group, Inc. Price American Airlines Group, Inc. Price | American Airlines Group, Inc. Quote Average fuel price per gallon (mainline jet fuel, including taxes) is estimated in the range of $1.88-$1.93 for the final quarter of 2017.
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Click to get this free report Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. AAL has issued an upbeat guidance for the fourth quarter of 2017. The company now expects total revenue per available seat mile (TRASM) for the fourth quarter to rise in the range of 5-6% year over year.
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7211.0
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2018-01-11 00:00:00 UTC
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Stock Market News For Jan 11, 2018
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AAL
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https://www.nasdaq.com/articles/stock-market-news-for-jan-11-2018-2018-01-11
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nan
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nan
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Broader markets declined on Wednesday following a surge in yield of the 10-year benchmark note after China considered halting purchase of U.S. Treasuries. Markets also suffered losses after reports from Canada surfaced that its government expects Trump to pull out of NAFTA soon. Meanwhile, cost of imported goods in the United States surged to a six year high.
The Dow Jones Industrial Average (DJI) decreased 0.06% to close at 25,369.13. The S&P 500 fell 0.1% to close at 2,748.23. The tech-laden Nasdaq Composite Index closed at 7,136.56, losing 0.1%. The fear-gauge CBOE Volatility Index (VIX) decreased 3.9% to close at 9.69. A total of around 6.93 billion shares were traded on Wednesday, above the last 20-session average of 6.38 billion shares. Decliners outnumbered decliners on the NYSE by a 1.59 -to-1 ratio. On Nasdaq, a 1.09-to-1 ratio favored declining issues.
China Considers Halting Purchase of U.S. Treasuries
A Bloomberg report stated that top government officials in Beijing have advocated reducing or ceasing the purchase of U.S. Treasuries after reviewing China's foreign-exchange holdings. Such a turn of events comes at a time when central banks globally have hinted at stepping back from buying bonds.
Such reports led the yield on the 10-year benchmark note higher by as much as four basis points to hit an intraday high of almost 2.6% which is also a 9-month high. This had negative ramifications for the U.S. stock market and such an event piqued an average investor's appetite for risk and market watchers considered rotating out of safer havens to bonds.
Canada SaysTrump Might End NAFTA
Canadian media reported that their government was expecting President Trump to soon announce that the United States was exiting the North American Free Trade Agreement (NAFTA). The report also cited names of two top government officials from Canada who expected this to happen. Such reports weighed on investor sentiment and pulled the broader markets lower in the U.S., Canada as well as Mexico.
On several occasions in the past, Trump had threatened to pull out of the trilateral pact if major changes are not made to NAFTA. Government officials are due to meet for the sixth time from Jan 23 through Jan 28 in Montreal to discuss and negotiate on this issue.
However, such comments just before the meeting have made it increasingly doubtful that any negotiations would take place in the meeting. Shares of General Motors GM fell as much as 2.4% following such reports. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
What are the Benchmarks Doing?
The Dow lost 16.7 points to end in the red, falling as much as 128.81 points in intraday trade.Further, the S&P 500 snapped its six day winning streak to slide 3.1 points and finished in negative territory. Of the 11 major segments of the S&P 500, 10 ended in the red, with real estate leading the decliners.
Financials turned out to be the only sector in the black. The Real Estate Select Sector SPDR (XLRE) lost 1.5% on Wednesday, while Financial Select Sector SPDR ETF (XLF) gained 0.8%. Meanwhile, Nasdaq also snapped its six day streak of gains to lose 10 points.
Economic Data
On the economic data front, the cost of goods which the United States imports surged mildly at the end of 2017 but managed to log a 3% increase -its biggest in six years. Import prices surged a meager 0.1% in December due to an increase in oil prices in the prior month. Meanwhile, export prices fell 0.1% in December, rising 2.6% overall in 2017.
Stocks That Made Headlines
American Airlines' Shares Rise on Bullish Q4 Outlook
American Airlines Group, Inc. AAL has issued an upbeat guidance for the fourth quarter of 2017. ( Read More )
Sirius XM Up on Robust 2017 Self-Pay Subscriber Additions
Shares of Sirius XM Holdings SIRI gained on Jan 10 to close the trading session share, following its better-than-expected performance in 2017 with respect to self-pay subscriber additions. ( Read More )
SUPERVALU Q3 Earnings Beat, Weak Retail Unit Hits Stock
Shares of SUPERVALU INC SVU tumbled 13.7% yesterday, after the company reported third-quarter fiscal 2018 results. ( Read More )
KB Home Stock Gains on Earnings & Revenue Beat in Q4
KB Home KBH ended fiscal 2017 on an impressive note based on solid housing fundamentals. ( Read More )
Wall Street's Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It's a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
General Motors Company (GM): Free Stock Analysis Report
KB Home (KBH): Free Stock Analysis Report
Sirius XM Holdings Inc. (SIRI): Free Stock Analysis Report
SuperValu Inc. (SVU): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Stocks That Made Headlines American Airlines' Shares Rise on Bullish Q4 Outlook American Airlines Group, Inc. AAL has issued an upbeat guidance for the fourth quarter of 2017. Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis Report KB Home (KBH): Free Stock Analysis Report Sirius XM Holdings Inc. (SIRI): Free Stock Analysis Report SuperValu Inc. (SVU): Free Stock Analysis Report To read this article on Zacks.com click here. Broader markets declined on Wednesday following a surge in yield of the 10-year benchmark note after China considered halting purchase of U.S. Treasuries.
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Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis Report KB Home (KBH): Free Stock Analysis Report Sirius XM Holdings Inc. (SIRI): Free Stock Analysis Report SuperValu Inc. (SVU): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks That Made Headlines American Airlines' Shares Rise on Bullish Q4 Outlook American Airlines Group, Inc. AAL has issued an upbeat guidance for the fourth quarter of 2017. The Real Estate Select Sector SPDR (XLRE) lost 1.5% on Wednesday, while Financial Select Sector SPDR ETF (XLF) gained 0.8%.
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Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis Report KB Home (KBH): Free Stock Analysis Report Sirius XM Holdings Inc. (SIRI): Free Stock Analysis Report SuperValu Inc. (SVU): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks That Made Headlines American Airlines' Shares Rise on Bullish Q4 Outlook American Airlines Group, Inc. AAL has issued an upbeat guidance for the fourth quarter of 2017. Canada SaysTrump Might End NAFTA Canadian media reported that their government was expecting President Trump to soon announce that the United States was exiting the North American Free Trade Agreement (NAFTA).
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Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis Report KB Home (KBH): Free Stock Analysis Report Sirius XM Holdings Inc. (SIRI): Free Stock Analysis Report SuperValu Inc. (SVU): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks That Made Headlines American Airlines' Shares Rise on Bullish Q4 Outlook American Airlines Group, Inc. AAL has issued an upbeat guidance for the fourth quarter of 2017. Broader markets declined on Wednesday following a surge in yield of the 10-year benchmark note after China considered halting purchase of U.S. Treasuries.
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7212.0
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2018-01-11 00:00:00 UTC
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Stock Indexes Rise; First Solar Hits New High
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AAL
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https://www.nasdaq.com/articles/stock-indexes-rise-first-solar-hits-new-high-2018-01-11
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nan
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nan
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U.S. stock indexes got back on the up track midday Thursday, though daily gains in the first full week of 2018 have been mild so far.
[ibd-display-video id=3017220 width=50 float=left autostart=true] The small-cap Russell 2000 rose 1.2%, leading the indexes for the first time this year. The Dow Jones industrial average, S&P 500 and Nasdaq composite followed with gains of 0.5%, 0.4% and 0.4%, respectively.
Volume in the stock market today fell on both major exchanges compared with the same time Wednesday.
Among IBD's 197 industry groups, energy stocks, home furnishings and airlines were the day's top gainers. Food-related stocks fell the most.
First Solar ( FSLR ) jumped 6% in heavy volume. The midcap stock cleared a short, sideways consolidation that is too short to be a valid base. Vertical Group, a privately held investment bank, initiated coverage on the stock Thursday with a buy rating.
First Solar's relative strength line is at a high, a bullish indicator. The RS line measures a stock's performance vs. the S&P 500. A rising line points to outperformance.
Vertical Group on Thursday initiated a buy rating on the stock, saying First Solar is "decidedly" undervalued.
In the oil patch, integrated oil stock Chevron ( CVX ) struck a new high. Chevron rose 2% in heavy volume. West Texas intermediate crude oil rose 1.5% to about $64.50 a barrel.
Home furnishings retailer RH ( RH ) surged 4% as it climbed back to its 50-day moving average . The small cap is 12% off a recent high.
American Airlines ( AAL ) advanced 2% in heavy volume. The stock is in the 5% buy zone from a 53.84 buy point. JetBlue Airways ( JBLU ) climbed 3% as the stock approaches a 22.84 buy point in a cup-with-handle base.
Blue chips were mostly up. Six stocks in the 30-component Dow Jones industrial average rose 1% or more: Chevron, General Electric (GE), Caterpillar (CAT), Intel (INTC), Boeing (BA) and Exxon Mobil (XOM).
The Innovator IBD 50 Fund (FFTY) added 0.26 to 35, bringing the exchange-traded fund up 5.5% in 2018. The Innovator ETF, which is based on the IBD 50, rose 37% last year.
RELATED:
First Solar Jumps As Coverage Initiated With Buy Rating
The No. 1 Rule When Investing In Stocks
1 More Trick From The Investing Toolbox
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines ( AAL ) advanced 2% in heavy volume. U.S. stock indexes got back on the up track midday Thursday, though daily gains in the first full week of 2018 have been mild so far. Vertical Group, a privately held investment bank, initiated coverage on the stock Thursday with a buy rating.
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American Airlines ( AAL ) advanced 2% in heavy volume. Among IBD's 197 industry groups, energy stocks, home furnishings and airlines were the day's top gainers. Vertical Group, a privately held investment bank, initiated coverage on the stock Thursday with a buy rating.
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American Airlines ( AAL ) advanced 2% in heavy volume. Vertical Group on Thursday initiated a buy rating on the stock, saying First Solar is "decidedly" undervalued. Six stocks in the 30-component Dow Jones industrial average rose 1% or more: Chevron, General Electric (GE), Caterpillar (CAT), Intel (INTC), Boeing (BA) and Exxon Mobil (XOM).
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American Airlines ( AAL ) advanced 2% in heavy volume. First Solar's relative strength line is at a high, a bullish indicator. Chevron rose 2% in heavy volume.
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7213.0
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2018-01-11 00:00:00 UTC
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Why American Airlines Group Stock Is Hopping This Week
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AAL
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https://www.nasdaq.com/articles/why-american-airlines-group-stock-hopping-week-2018-01-11
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nan
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nan
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What happened
For the second day in a row, shares of American Airlines Group (NASDAQ: AAL) closed higher on Thursday -- up 4.9% on the day, and up 8.3% since Tuesday.
Why the sudden acceleration?
On Wednesday, American Airlines filed an 8-K report with the Securities and Exchange Commission, updating investors on its performance in the fourth quarter. Management said that it expects "total revenue per available seat mile (TRASM) to be up 5.0 to 6.0 percent year-over-year" in Q4. Pre-tax profit margins are also looking healthier, and are expected to range from 6.5% to 7.0%.
Please return your seats to a full upright position. American Airlines stock is taking off. Image source: Getty Images.
So what
American Airlines' new numbers look significantly better than what it had previously guided investors to expect: TRASM growth of 2.5% to 5.0%, and pre-tax profit margins of between 4.5% and 6.5%.
Additionally, American's comments regarding its increases in capacity (that is, buying more planes) suggest the company will be able to maintain high profit margins. "Total system capacity" grew only about 1% year over year in 2017, management says, with domestic capacity flat and international capacity rising 4%. So long as American doesn't add planes faster than it's adding revenue derived from those planes, it follows that the company won't be forced to discount prices to fill seats.
Now what
One factor does bear watching, however. American noted that it expects fuel prices to average between $1.88 and $1.93 per gallon in Q4 -- significantly higher than its average fuel cost for the full year of between $1.69 and $1.74 per gallon. If fuel prices continue rising, this could pinch profit margins no matter how much restraint American shows in its rate of capacity expansion.
10 stocks we like better than American Airlines Group
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David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and American Airlines Group wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of January 2, 2018
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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What happened For the second day in a row, shares of American Airlines Group (NASDAQ: AAL) closed higher on Thursday -- up 4.9% on the day, and up 8.3% since Tuesday. On Wednesday, American Airlines filed an 8-K report with the Securities and Exchange Commission, updating investors on its performance in the fourth quarter. So what American Airlines' new numbers look significantly better than what it had previously guided investors to expect: TRASM growth of 2.5% to 5.0%, and pre-tax profit margins of between 4.5% and 6.5%.
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What happened For the second day in a row, shares of American Airlines Group (NASDAQ: AAL) closed higher on Thursday -- up 4.9% on the day, and up 8.3% since Tuesday. American noted that it expects fuel prices to average between $1.88 and $1.93 per gallon in Q4 -- significantly higher than its average fuel cost for the full year of between $1.69 and $1.74 per gallon. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.
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What happened For the second day in a row, shares of American Airlines Group (NASDAQ: AAL) closed higher on Thursday -- up 4.9% on the day, and up 8.3% since Tuesday. So what American Airlines' new numbers look significantly better than what it had previously guided investors to expect: TRASM growth of 2.5% to 5.0%, and pre-tax profit margins of between 4.5% and 6.5%. 10 stocks we like better than American Airlines Group When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen.
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What happened For the second day in a row, shares of American Airlines Group (NASDAQ: AAL) closed higher on Thursday -- up 4.9% on the day, and up 8.3% since Tuesday. Additionally, American's comments regarding its increases in capacity (that is, buying more planes) suggest the company will be able to maintain high profit margins. * David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and American Airlines Group wasn't one of them!
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7214.0
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2018-01-10 00:00:00 UTC
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American Joins United In Raising This Key Forecast; Delta Q4 On Deck
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AAL
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https://www.nasdaq.com/articles/american-joins-united-raising-key-forecast-delta-q4-deck-2018-01-10
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nan
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nan
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American Airlines ( AAL ) on Wednesday joined United Airlines ( UAL ) in raising its fourth-quarter unit revenue, citing better prices across its global network and more flights booked closer to departure times.
[ibd-display-video id=3073039 width=50 float=left autostart=true] The figures, reported ahead of Delta Air Lines' ( DAL ) fourth-quarter earnings on Thursday , indicate that the airlines have had more leeway in charging passengers more to fly, amid solid demand and rising fuel costs, which airlines pass onto travelers.
American said it expected total unit revenue to rise 5%-6%, better than an earlier forecast for a 2.5%-4.5% bump. The carrier also said it expected Q4 adjusted pretax margin to come in at roughly 6.5%-7%, compared to an earlier view for 4.5%-6.5%.
Unit costs, excluding fuel and special items, were expected to rise roughly 4%, American said, largely due to pay raises to employees and other expenses. But the forecast was lower than its previous outlook, due to a higher than expected completion factor - or total flights completed.
American shares sparked 3.3% higher to close at 53.78 in the stock market today , stopping just short of a 53.84 buy point. Delta rose 3.1% to 55.86 and was still within range of a 54.16 buy point of a cup-with-handle base. United, which gave its Q4 forecast late Tuesday, jumped 6.7%. Southwest ( LUV ) gained 0.9%, and Hawaiian Holdings ( HA ) added 2.9% after sinking 6.3% Tuesday.
IBD'S TAKE:With thousands of publicly traded companies to choose from, how can you quickly find the best stocks to buy right now? A good starting point is to regularly review screens that highlight the top-rated equities.
American said it expected to record around $315 million in pretax special items in Q4, including costs related to merger integration and fleet restructuring, as well as the $1,000 bonuses given to employees following the tax cuts that Trump has signed into law.
Southwest on Tuesday said it was sticking with its Q4 unit revenue forecast, but the stock was also downgraded yesterday by Bank of America Merrill Lynch, which said GOP tax cuts would boost business travel at Delta, United and American but leave Southwest will little benefit.
YOU MIGHT BE INTERESTED IN:
Airline Industry News And Stocks To Watch
Looking For Breakout Stocks Like Nvidia? Start With These Lists
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines ( AAL ) on Wednesday joined United Airlines ( UAL ) in raising its fourth-quarter unit revenue, citing better prices across its global network and more flights booked closer to departure times. Unit costs, excluding fuel and special items, were expected to rise roughly 4%, American said, largely due to pay raises to employees and other expenses. American shares sparked 3.3% higher to close at 53.78 in the stock market today , stopping just short of a 53.84 buy point.
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American Airlines ( AAL ) on Wednesday joined United Airlines ( UAL ) in raising its fourth-quarter unit revenue, citing better prices across its global network and more flights booked closer to departure times. American said it expected total unit revenue to rise 5%-6%, better than an earlier forecast for a 2.5%-4.5% bump. Unit costs, excluding fuel and special items, were expected to rise roughly 4%, American said, largely due to pay raises to employees and other expenses.
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American Airlines ( AAL ) on Wednesday joined United Airlines ( UAL ) in raising its fourth-quarter unit revenue, citing better prices across its global network and more flights booked closer to departure times. Unit costs, excluding fuel and special items, were expected to rise roughly 4%, American said, largely due to pay raises to employees and other expenses. Southwest on Tuesday said it was sticking with its Q4 unit revenue forecast, but the stock was also downgraded yesterday by Bank of America Merrill Lynch, which said GOP tax cuts would boost business travel at Delta, United and American but leave Southwest will little benefit.
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American Airlines ( AAL ) on Wednesday joined United Airlines ( UAL ) in raising its fourth-quarter unit revenue, citing better prices across its global network and more flights booked closer to departure times. American said it expected total unit revenue to rise 5%-6%, better than an earlier forecast for a 2.5%-4.5% bump. Unit costs, excluding fuel and special items, were expected to rise roughly 4%, American said, largely due to pay raises to employees and other expenses.
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7215.0
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2018-01-10 00:00:00 UTC
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Trump Tax-Cut Windfall Mounts: Higher Pay, Lower Utility Bills
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AAL
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https://www.nasdaq.com/articles/trump-tax-cut-windfall-mounts-higher-pay-lower-utility-bills-2018-01-10
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nan
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nan
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The Trump tax cuts were met with bleak poll numbers and high skepticism among Americans about their tilt in favor of corporations and the highest-income groups. Yet barely two weeks after passage, roughly 1 million workers have been awarded bonuses that companies attribute to the GOP tax legislation, according to a running list by Americans for Tax Reform, and a few million more are in line to get small cuts in their utility bills.
[ibd-display-video id=3017205 width=50 float=left autostart=true] Still others will benefit from bigger corporate matches for 401(k) accounts, as well as a new $15 minimum wage adopted by at least 20 banks, including Wells Fargo ( WFC ), U.S. Bancorp ( USB ) and PNC Financial Services ( PNC ), in the wake of tax cuts.
Among the biggest announcements have been $1,000 bonus awards by American Airlines ( AAL ) (127,000 employees); AT&T ( T ) (200,000); Bank of America (BAC) (145,000); Comcast (CMCSA) (100,000); Southwest Airlines (LUV) (55,000); and U.S. Bancorp (60,000). The generosity of those announcements was undercut somewhat by reports that AT&T and Comcast were in the midst of layoffs .
Meanwhile, a number of electric utilities have announced plans to cut power bills, sharing their tax-cut windfall. Customers of Berkshire Hathaway (BRKB) subsidiary Pacificorp and Exelon (EXC) subsidiaries Pepco, Baltimore Gas & Electric, and Commonwealth Edison stand to benefit.
IBD'S TAKE:Read IBD's The Big Picture column every day to stay on top of the market direction, a key indicator that lets you know when you can be aggressive and when you should move to the sidelines. As long as the current "confirmed uptrend" - the equivalent of a green light - stays in place, leading stocks breaking above a buy point are more likely than not to have the wind at their backs. Here's a good place to start looking for stocks that may be poised to move higher.
Even before the tax cuts begin to show up in paychecks in February, take-home pay has been surging at a rate that's almost unmatched since recession hit in 2007, the exception being a spurt that coincided with 2017's bonus season that runs through the end of March.
Over the past 10 weeks, federal withheld employment and income taxes have surged 7.4% from the same period a year ago, an IBD analysis of Daily Treasury Statements finds. That's far faster than the roughly 5% growth in tax receipts implied by 2.5% average wage gains and the roughly 2% growth trend in aggregate hours worked in the economy, so bonuses and other incentive pay likely explain the surge to a large extent.
The big political question is whether such displays of corporate generosity begin to shift sentiment about the Republicans' legislative achievement and improve GOP prospects in the midterm elections. From an economic standpoint, the question is how fast will the economy grow in 2018 and how much growth will result from this instant gratification from tax cuts.
Most economists have fairly moderate expectations for growth this year, with JPMorgan Chase's economics team seeing 2.5% GDP growth in 2018, thanks to a 0.3-percentage-point lift from tax cuts . But JPMorgan CEO Jamie Dimon said on Tuesday that he thinks " 4% economic growth this year is possible ."
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Among the biggest announcements have been $1,000 bonus awards by American Airlines ( AAL ) (127,000 employees); AT&T ( T ) (200,000); Bank of America (BAC) (145,000); Comcast (CMCSA) (100,000); Southwest Airlines (LUV) (55,000); and U.S. Bancorp (60,000). Even before the tax cuts begin to show up in paychecks in February, take-home pay has been surging at a rate that's almost unmatched since recession hit in 2007, the exception being a spurt that coincided with 2017's bonus season that runs through the end of March. Over the past 10 weeks, federal withheld employment and income taxes have surged 7.4% from the same period a year ago, an IBD analysis of Daily Treasury Statements finds.
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Among the biggest announcements have been $1,000 bonus awards by American Airlines ( AAL ) (127,000 employees); AT&T ( T ) (200,000); Bank of America (BAC) (145,000); Comcast (CMCSA) (100,000); Southwest Airlines (LUV) (55,000); and U.S. Bancorp (60,000). Yet barely two weeks after passage, roughly 1 million workers have been awarded bonuses that companies attribute to the GOP tax legislation, according to a running list by Americans for Tax Reform, and a few million more are in line to get small cuts in their utility bills. Congress OKs Trump Tax Cuts; These Companies Are Celebrating The Most Federal Reserve Gives Trump Tax Cuts A Green Light How To Invest In Stocks For Free: New Apps Aim For Beginners Looking For The Best Stocks To Buy And Watch?
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Among the biggest announcements have been $1,000 bonus awards by American Airlines ( AAL ) (127,000 employees); AT&T ( T ) (200,000); Bank of America (BAC) (145,000); Comcast (CMCSA) (100,000); Southwest Airlines (LUV) (55,000); and U.S. Bancorp (60,000). Yet barely two weeks after passage, roughly 1 million workers have been awarded bonuses that companies attribute to the GOP tax legislation, according to a running list by Americans for Tax Reform, and a few million more are in line to get small cuts in their utility bills. Congress OKs Trump Tax Cuts; These Companies Are Celebrating The Most Federal Reserve Gives Trump Tax Cuts A Green Light How To Invest In Stocks For Free: New Apps Aim For Beginners Looking For The Best Stocks To Buy And Watch?
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Among the biggest announcements have been $1,000 bonus awards by American Airlines ( AAL ) (127,000 employees); AT&T ( T ) (200,000); Bank of America (BAC) (145,000); Comcast (CMCSA) (100,000); Southwest Airlines (LUV) (55,000); and U.S. Bancorp (60,000). From an economic standpoint, the question is how fast will the economy grow in 2018 and how much growth will result from this instant gratification from tax cuts. Congress OKs Trump Tax Cuts; These Companies Are Celebrating The Most Federal Reserve Gives Trump Tax Cuts A Green Light How To Invest In Stocks For Free: New Apps Aim For Beginners Looking For The Best Stocks To Buy And Watch?
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7216.0
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2018-01-10 00:00:00 UTC
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Delta Air Lines To Report But Watch This Rival: Investing Action Plan
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AAL
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https://www.nasdaq.com/articles/delta-air-lines-report-watch-rival-investing-action-plan-2018-01-10
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nan
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nan
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Here's your Investing Action Plan for Thursday: what you need to know as an investor for the coming day.
[ibd-display-video id=3073039 width=50 float=left autostart=true] Delta Air Lines ( DAL ) will report quarterly earnings as the sector has enjoyed a tailwind recently, especially among the biggest carriers, which also include American Airlines ( AAL ) and United Airlines ( UAL ). Meanwhile, CES 2018 marches along and will feature an FBI special agent and General Motors ( GM ) discussing cybersecurity and the auto industry.
Delta Air Lines
Estimates : EPS to rise 8.5% to 89 cents, as revenue grows 7.4% to $10.16 billion, according to Zacks Investment Research. Delta has said it sees a 4% gain in Q4 passenger unit revenue.
Stock : Shares closed up 3.1% at 55.86 on the stock market today , still in buy range after clearing a 54.16 cup-with-handle base last month.
The GOP 's tax reforms, ticket prices as well as targets for earnings and cost cuts are likely to be focal points for investors. On Tuesday, Bank of America Merrill Lynch said the tax cuts are likely to boost business travel , helping Delta, United and American.
Also Tuesday, United raised its Q4 unit revenue guidance , sending shares surging 6.5% today, and American followed suit early Wednesday.
Shares of American rose 3.3% to at 53.78, finishing below a 53.84 entry after topping that threshold earlier. But that move comes with an important caveat: the stock's relative strength line remains below the cup-with-handle base's peak, indicating greater odds that any breakout won't be sustained.
IBD'S TAKE:Buying or holding a stock can be risky heading into an earnings report. Here's anearnings options strategythat can help you cash in on post-earnings stock gains, while minimizing the risk from a weak quarter.
CES
The sprawling tech trade show will again include more discussions about artificial intelligence, Amazon's ( AMZN ) Alexa and the rise of smart homes, as well as the use of wearable technology overall and in the office. Technological trends in the health sector will also be a hot topic, as will the latest in drone innovation.
One notable panel discussion will cover cybersecurity and the auto industry, which is rolling out more internet-connected cars and developing fleets of self-driving cars. Speakers include the FBI's supervisory special agent with the Las Vegas division, GM's product cybersecurity director, and Harman's director of cybersecurity business development for North America.
The event also follows revelations earlier this week of major security vulnerabilities across the chip industry. Intel (INTC) said Tuesday it expects to issue updates to more than 90% of its processors released in the past five years within a week, and the remaining by the end of January.
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Looking For The Best Stocks To Buy And Watch? Start Here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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[ibd-display-video id=3073039 width=50 float=left autostart=true] Delta Air Lines ( DAL ) will report quarterly earnings as the sector has enjoyed a tailwind recently, especially among the biggest carriers, which also include American Airlines ( AAL ) and United Airlines ( UAL ). On Tuesday, Bank of America Merrill Lynch said the tax cuts are likely to boost business travel , helping Delta, United and American. But that move comes with an important caveat: the stock's relative strength line remains below the cup-with-handle base's peak, indicating greater odds that any breakout won't be sustained.
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[ibd-display-video id=3073039 width=50 float=left autostart=true] Delta Air Lines ( DAL ) will report quarterly earnings as the sector has enjoyed a tailwind recently, especially among the biggest carriers, which also include American Airlines ( AAL ) and United Airlines ( UAL ). Meanwhile, CES 2018 marches along and will feature an FBI special agent and General Motors ( GM ) discussing cybersecurity and the auto industry. Speakers include the FBI's supervisory special agent with the Las Vegas division, GM's product cybersecurity director, and Harman's director of cybersecurity business development for North America.
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[ibd-display-video id=3073039 width=50 float=left autostart=true] Delta Air Lines ( DAL ) will report quarterly earnings as the sector has enjoyed a tailwind recently, especially among the biggest carriers, which also include American Airlines ( AAL ) and United Airlines ( UAL ). Speakers include the FBI's supervisory special agent with the Las Vegas division, GM's product cybersecurity director, and Harman's director of cybersecurity business development for North America. CES 2018 News: The World's Largest Consumer Tech Show Airline Stocks To Watch And Industry News Delta Air Lines Preview: Biggest Revenue Gain In 3 Years Expected Stocks To Buy And Watch: Top IPOs, Big And Small Caps, Growth Stocks Looking For The Best Stocks To Buy And Watch?
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[ibd-display-video id=3073039 width=50 float=left autostart=true] Delta Air Lines ( DAL ) will report quarterly earnings as the sector has enjoyed a tailwind recently, especially among the biggest carriers, which also include American Airlines ( AAL ) and United Airlines ( UAL ). Delta has said it sees a 4% gain in Q4 passenger unit revenue. Stock : Shares closed up 3.1% at 55.86 on the stock market today , still in buy range after clearing a 54.16 cup-with-handle base last month.
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7217.0
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2018-01-09 00:00:00 UTC
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Fasten Your Seat Belts and Fly High with JetBlue Airways Corporation
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AAL
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https://www.nasdaq.com/articles/fasten-your-seat-belts-and-fly-high-jetblue-airways-corporation-2018-01-09
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
It is hard to ignore the rise of the Transports. The iShares Dow Jones Transport. Avg. (ETF) (NYSEARCA: IYT ) is up more than 14% in six months. Clearly, the sector is in favor on Wall Street. JetBlue Airways Corporation (NASDAQ: JBLU ) stock is not so lucky, down 9% for the same period. But it has had its ups and downs, so this swoon shall also pass, and therein lies my opportunity.
Source: Josh Hallett Flickr
Today I want to go long JBLU stock even though I worry a little about the trader reaction to the upcoming earnings. Furthermore, technically the stock could be vulnerable to further downside. It is bumping along a neckline that, if lost, could bring about a retest of $20 per share. Although this is not a forecast, it is a possibility that I have to consider.
So, instead of buying the shares outright and risking $21 with absolutely no room for error, I will use JBLU options. There I can eliminate the need to be surgical with my trade timing.
Instead of betting on an upside move, I am more confident betting on support especially where I see value.
The 7 Best Tax-Smart ETFs to Buy Today
The JBLU stock stock is not languishing alone. United Continental Holdings Inc (NYSE: UAL ) is down 12% in six months. Delta Air Lines, Inc. (NYSE: DAL ) and American Airlines Group Inc (NASDAQ: AAL ) are down 1%. So for some reason airlines are out of favor relative to the transports.
Click to Enlarge This, however, doesn't change the fact that JBLU is cheap. With a price-to-earnings ratio of 11, I have confidence that I can own the shares, especially if at a discount from here, and profit from it. This is integral to my style of trading and today's set up.
Analysts agree with me since currently JetBlue stock is trading 11% below the average price target on Wall Street. Still I won't bet on the hopium of higher prices. I will confidently bet that support will hold and even if it doesn't I will own the shares at a 14% discount from here. For that, I get paid a premium today to open my trade.
The B.T.F.D. meme is alive and well in this uber-bullish market. And I want to take advantage of this dip in a quality company like JBLU.
JBLU Stock Trade Idea
The Trade: Sell JBLU Mar $18 put. This is a bullish trade for which I collect 30 cents to open. I have an 85% certitude that I will retain maximum gains. But if price falls below my strike then I own shares. I would then need to manage off my break-even point of $17.70.
Selling naked puts is daunting. Those who want to mitigate that risk can sell spreads instead.
The Alternate Trade: Sell JBLU Mar $18/$17 credit put spread. The spread has the same odds but would deliver 15% yield on risk. Neither trade require a rally to profit.
Electronic Arts Inc. Bears Are Facing Game Over
Today's trade, although it would benefit from one, doesn't need a rally to profit. I merely need JBLU stock to hold its support for the next few months. I am betting that the value in the stock will prevent sellers from taking too far. It is important know that if they do, then I want to own the shares at a discount from here.
Ultimately, regardless of how careful I am, investing in stocks is fraught with danger, so I never risk more than I am willing to lose.
Get my newsletter for free here . Nicolas Chahine is the managing director of SellSpreads.com . As of this writing, he did not hold a position in any of the aforementioned securities. You can follow him as @racernic on twitter and stocktwits .
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The post Fasten Your Seat Belts and Fly High with JetBlue Airways Corporation appeared first on InvestorPlace .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Delta Air Lines, Inc. (NYSE: DAL ) and American Airlines Group Inc (NASDAQ: AAL ) are down 1%. Source: Josh Hallett Flickr Today I want to go long JBLU stock even though I worry a little about the trader reaction to the upcoming earnings. Electronic Arts Inc. Bears Are Facing Game Over Today's trade, although it would benefit from one, doesn't need a rally to profit.
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Delta Air Lines, Inc. (NYSE: DAL ) and American Airlines Group Inc (NASDAQ: AAL ) are down 1%. JetBlue Airways Corporation (NASDAQ: JBLU ) stock is not so lucky, down 9% for the same period. JBLU Stock Trade Idea The Trade: Sell JBLU Mar $18 put.
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Delta Air Lines, Inc. (NYSE: DAL ) and American Airlines Group Inc (NASDAQ: AAL ) are down 1%. InvestorPlace - Stock Market News, Stock Advice & Trading Tips It is hard to ignore the rise of the Transports. The 7 Best Tax-Smart ETFs to Buy Today The JBLU stock stock is not languishing alone.
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Delta Air Lines, Inc. (NYSE: DAL ) and American Airlines Group Inc (NASDAQ: AAL ) are down 1%. The 7 Best Tax-Smart ETFs to Buy Today The JBLU stock stock is not languishing alone. I will confidently bet that support will hold and even if it doesn't I will own the shares at a 14% discount from here.
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7218.0
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2018-01-09 00:00:00 UTC
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Will Rising Costs Hamper Delta Air Lines' (DAL) Q4 Earnings?
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AAL
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https://www.nasdaq.com/articles/will-rising-costs-hamper-delta-air-lines-dal-q4-earnings-2018-01-09
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nan
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nan
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Delta Air Lines, Inc.DAL is scheduled to report fourth-quarter 2017 results on Jan 11, before the market opens.
The carrier's earnings as well as revenues surpassed expectations in the third quarter despite the natural calamities. However, the bottom line declined 7.6% on a year-over-year basis due to higher costs. While the top line increased 5.5% from the year-ago figure.
Let's see how things are shaping up for this earnings.
Factors Likely at Play
Like the previous quarter, high costs are anticipated to hurt Delta's bottom line in the fourth quarter too. Additionally, the recent power outage at the Atlanta airport has led to approximately 1,400 flight cancellations and is estimated to have affected the carrier's pre-tax income to the tune of $25-50 million in the to-be-reported quarter. Moreover, the company has increased guidance for fourth-quarter costs due to the power crisis as well as some other factors.
The Atlanta, GA-based company now anticipates fourth-quarter non-fuel unit costs including profit sharing to be up approximately 5.5% (previous view was in the range of 5-5.5%). The carrier expects fuel price per gallon for the concluding quarter of 2017 between $1.92 and $1.97 including taxes and refinery impact. The Zacks Consensus Estimate for fourth-quarter Average fuel price per gallon, net of hedging (mainline) stands at $1.89, substantially higher than the year-ago reported value of $1.60. Moreover, due to high fuel costs, the company expects operating margin for the fourth quarter to be approximately 11%, the lowest point in its initially guided range of 11-13%. Additionally, system capacity for the period is projected to expand 2.3%.
However, the airline has been seeing rising revenue trends in the final quarter. The carrier forecasts the metric to rise approximately 4% in the final quarter of 2017, higher than the 1.9% growth witnessed in the third quarter. In fact, the Zacks Consensus Estimate for fourth-quarter passenger revenue per available seat mile (PRASM) stands at 14.04 cents, higher than the year-ago reported value of 13.58 cents.
The carrier is anticipated to take a one-time charge of $150-$200 million in the to-be-reported quarter on account of the newly initiated tax law.
Earnings Whispers
Our proven model does not show conclusively that Delta is likely to beat estimates in fourth-quarter 2017. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case here as highlighted below.
Zacks ESP : Delta has an Earnings ESP of -0.71% as the Most Accurate estimate is pegged at 89 cents per share, marginally lower than the Zacks Consensus Estimate of 90 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Zacks Rank : Delta carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about a possible earnings surprise. Hence, a negative ESP leaves our surprise prediction inconclusive.
We caution against Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the stock is witnessing negative estimate revisions.
Delta Air Lines, Inc. Price and EPS Surprise
Delta Air Lines, Inc. Price and EPS Surprise | Delta Air Lines, Inc. Quote
Stocks to Consider
Investors interested in the broader Transportation sector may consider American Airlines Group, Inc. AAL , CSX Corporation CSX and JetBlue Airways Corporation JBLU stocks with the right combination of elements to deliver an earnings beat in their next releases.
American Airlines has an Earnings ESP of +4.54% and a Zacks Rank #3. The company is expected to report fourth-quarter earnings on Jan 26.
CSX has an Earnings ESP of +1.13% and a Zacks Rank of 3. The company is scheduled to report fourth-quarter results on Jan 16. You can see the complete list of today's Zacks #1 Rank stocks here.
JetBlue has an Earnings ESP of +6.06% and the stock is a Zacks #3 Ranked player. The company is expected to report fourth-quarter earnings on Jan 25.
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JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
CSX Corporation (CSX): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Delta Air Lines, Inc. Price and EPS Surprise Delta Air Lines, Inc. Price and EPS Surprise | Delta Air Lines, Inc. Quote Stocks to Consider Investors interested in the broader Transportation sector may consider American Airlines Group, Inc. AAL , CSX Corporation CSX and JetBlue Airways Corporation JBLU stocks with the right combination of elements to deliver an earnings beat in their next releases. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis Report To read this article on Zacks.com click here. Additionally, the recent power outage at the Atlanta airport has led to approximately 1,400 flight cancellations and is estimated to have affected the carrier's pre-tax income to the tune of $25-50 million in the to-be-reported quarter.
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Delta Air Lines, Inc. Price and EPS Surprise Delta Air Lines, Inc. Price and EPS Surprise | Delta Air Lines, Inc. Quote Stocks to Consider Investors interested in the broader Transportation sector may consider American Airlines Group, Inc. AAL , CSX Corporation CSX and JetBlue Airways Corporation JBLU stocks with the right combination of elements to deliver an earnings beat in their next releases. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis Report To read this article on Zacks.com click here. Factors Likely at Play Like the previous quarter, high costs are anticipated to hurt Delta's bottom line in the fourth quarter too.
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Delta Air Lines, Inc. Price and EPS Surprise Delta Air Lines, Inc. Price and EPS Surprise | Delta Air Lines, Inc. Quote Stocks to Consider Investors interested in the broader Transportation sector may consider American Airlines Group, Inc. AAL , CSX Corporation CSX and JetBlue Airways Corporation JBLU stocks with the right combination of elements to deliver an earnings beat in their next releases. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks ESP : Delta has an Earnings ESP of -0.71% as the Most Accurate estimate is pegged at 89 cents per share, marginally lower than the Zacks Consensus Estimate of 90 cents.
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Delta Air Lines, Inc. Price and EPS Surprise Delta Air Lines, Inc. Price and EPS Surprise | Delta Air Lines, Inc. Quote Stocks to Consider Investors interested in the broader Transportation sector may consider American Airlines Group, Inc. AAL , CSX Corporation CSX and JetBlue Airways Corporation JBLU stocks with the right combination of elements to deliver an earnings beat in their next releases. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis Report To read this article on Zacks.com click here. The company is expected to report fourth-quarter earnings on Jan 26.
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7219.0
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2018-01-09 00:00:00 UTC
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Delta Air Lines Preview: Biggest Revenue Gain In 3 Years Expected
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AAL
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https://www.nasdaq.com/articles/delta-air-lines-preview-biggest-revenue-gain-3-years-expected-2018-01-09
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nan
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nan
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Third-quarter earnings season in October was not exactly gentle on the airlines. But investors have, perhaps, been a little easier on Delta Air Lines ( DAL ), which reports Q4 results on Thursday - just weeks after the legacy carrier laid out some ambitious goals to push profit higher and contain costs this year.
[ibd-display-video id=3072810 width=50 float=left autostart=true] The GOP 's tax-cut package, ticket prices and, naturally, those targets seem likely to be focal points for investors. On Tuesday, Bank of America Merrill Lynch said the tax cuts are likely to boost business travel , helping Delta, United Airlines ( UAL ) and American Airlines ( AAL ).
As for Q4 itself, Wall Street expects Delta to report earnings per share of 90 cents, up 10%, on revenue of $10.16 billion, a 7% increase, according to Zacks Investment Research. That top-line gain would mark the biggest increase since Q3 2014.
Delta last week said it expected a roughly 4% increase in passenger unit revenue during the quarter, which would be its best showing all year in the key metric. The company expects adjusted operating margin of around 11%.
After United flat-out terrified investors in October following a murky 2018 financial forecast and shares of American and others retreated on a mixture of worries about too much expansion and rising costs , Delta has remained "the go-to legacy airline," Morgan Stanley analyst Rajeev Lalwani said in a research note last week.
He cited the carrier's 2018 profit and the cost targets it outlined last month at its investor day - EPS of $5.30-$5.70 and unit cost growth of flat to up 2% along with the potential lift from the GOP's tax reform - as reasons to like the airline.
Many investors on Thursday will likely be seeking more insight into how Delta might use the savings from that law, and how it might affect travel demand. Cowen analyst Helane Becker said she expected Delta to raise its earnings-per-share forecast this year to as much as $6-$6.35 due to the tax reform. Lalwani added that the possible benefits of tax cuts could pad the carrier's industry-leading free cash flow.
Analysts will also be watching for Delta's diagnosis of airfares and demand, amid expectations for a pickup in U.S. travel that would increase ticket prices and boost profits.
And Wall Street will be watching for signals that Delta can keep a tight lid on costs. Unit costs for airlines rose last year - due largely to labor deals, more expensive fuel and higher airport fees - and raised concerns that they could hurt margins this year. However, Lalwani said cost issues were "already known by the market," and Becker said nonfuel unit-cost growth was easing and that airlines appeared to be getting better at handling those costs.
Delta shares remain in buy range after breaking out from a cup-with-handle base last month from a 54.16 entry. But the Relative Strength line , which wasn't strong at the breakout, has weakened as the stock has failed to make much headway while the broader market marches to new highs. The RS line tracks a stock's performance vs. the S&P 500 index.
IBD'S TAKE:Buying or holding a stock can be risky heading into an earnings report. Here's anearnings options strategythat can help you cash in on post-earnings stock gains, while minimizing the risk from a weak quarter.
Any brighter outlook from Delta, however, would follow a fourth quarter in which the carrier had to cancel some 1,400 flights following an outage at its Atlanta hub, denting its pretax income by an amount expected to be somewhere between $25 million and $50 million. The company will take a one-time charge of $150 million to $200 million from the tax cuts, which have had the effect of lowering the value of some assets on large corporations' books.
Still, the carrier said it expected to see positive unit revenue in all its markets globally, after discounting from low-cost, long-haul European carriers, a stronger dollar and economic difficulties weighed on those results in years past.
Delta also has tried to broaden its international coverage through joint ventures. It agreed to form one last month with Canada's WestJet - and management could offer more details on that front.
Moreover, Delta has been the "most rational" in competing with ultra-low-cost carriers, JPMorgan's investment thesis on the company says. Dirt-cheap fares from Spirit Airlines ( SAVE ) and others have, at times, tempted the bigger carriers into matching them on price, whittling away profits and aggravating investors.
"Delta is often cited as the peer leader in terms of capital allocation and execution, and we believe investors will continue to take notice," JPMorgan analyst Jamie Baker wrote.
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Delta Falls After Raising Q4 Cost Forecasts, Curbing Capacity Growth
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Looking For The Best Stocks To Buy And Watch? Start Here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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On Tuesday, Bank of America Merrill Lynch said the tax cuts are likely to boost business travel , helping Delta, United Airlines ( UAL ) and American Airlines ( AAL ). But investors have, perhaps, been a little easier on Delta Air Lines ( DAL ), which reports Q4 results on Thursday - just weeks after the legacy carrier laid out some ambitious goals to push profit higher and contain costs this year. After United flat-out terrified investors in October following a murky 2018 financial forecast and shares of American and others retreated on a mixture of worries about too much expansion and rising costs , Delta has remained "the go-to legacy airline," Morgan Stanley analyst Rajeev Lalwani said in a research note last week.
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On Tuesday, Bank of America Merrill Lynch said the tax cuts are likely to boost business travel , helping Delta, United Airlines ( UAL ) and American Airlines ( AAL ). But investors have, perhaps, been a little easier on Delta Air Lines ( DAL ), which reports Q4 results on Thursday - just weeks after the legacy carrier laid out some ambitious goals to push profit higher and contain costs this year. As for Q4 itself, Wall Street expects Delta to report earnings per share of 90 cents, up 10%, on revenue of $10.16 billion, a 7% increase, according to Zacks Investment Research.
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On Tuesday, Bank of America Merrill Lynch said the tax cuts are likely to boost business travel , helping Delta, United Airlines ( UAL ) and American Airlines ( AAL ). But investors have, perhaps, been a little easier on Delta Air Lines ( DAL ), which reports Q4 results on Thursday - just weeks after the legacy carrier laid out some ambitious goals to push profit higher and contain costs this year. After United flat-out terrified investors in October following a murky 2018 financial forecast and shares of American and others retreated on a mixture of worries about too much expansion and rising costs , Delta has remained "the go-to legacy airline," Morgan Stanley analyst Rajeev Lalwani said in a research note last week.
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On Tuesday, Bank of America Merrill Lynch said the tax cuts are likely to boost business travel , helping Delta, United Airlines ( UAL ) and American Airlines ( AAL ). But investors have, perhaps, been a little easier on Delta Air Lines ( DAL ), which reports Q4 results on Thursday - just weeks after the legacy carrier laid out some ambitious goals to push profit higher and contain costs this year. He cited the carrier's 2018 profit and the cost targets it outlined last month at its investor day - EPS of $5.30-$5.70 and unit cost growth of flat to up 2% along with the potential lift from the GOP's tax reform - as reasons to like the airline.
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7220.0
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2018-01-09 00:00:00 UTC
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Is Delta Air Lines, Inc. a Buy in 2018?
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AAL
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https://www.nasdaq.com/articles/delta-air-lines-inc-buy-2018-2018-01-09
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nan
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nan
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On a pre-tax basis, 2015, 2016, and 2017 have been the three most profitable years in the history of Delta Air Lines (NYSE: DAL) . A combination of low fuel prices, steady economic growth, and business travelers' preference for Delta over American Airlines (NASDAQ: AAL) and United Continental (NYSE: UAL) drove these strong results.
Nevertheless, while Delta Air Lines stock currently sits near an all-time high, it has risen just 16% over the past three years. That's less than half of the S&P 500's gain.
Delta Air Lines Stock Performance vs. S&P 500, data by YCharts .
Two relatively recent developments -- Delta's return to unit revenue growth and corporate tax reform -- could make 2018 the year that Delta Air Lines stock finally breaks out. However, for that to happen, Delta will need to show that it can overcome the headwind from rising fuel costs while keeping non-fuel spending in check.
Revenue momentum has returned
Throughout 2015 and 2016, Delta Air Lines -- and most of its airline industry peers -- faced severe unit revenue pressure. Passenger revenue per available seat mile (PRASM) declined 3.3% in 2015 and another 4.9% in 2016. Effectively more than half of Delta's savings from lower fuel costs got passed through to customers.
In 2017, it became far more urgent for airlines to get unit revenue growing, as jet fuel prices started to rise again and labor costs climbed. PRASM decreased 0.5% in the first quarter, but Delta's unit revenue performance improved over the course of the year. PRASM rose 2.5% in the second quarter and 1.9% in the third quarter and is projected to rise by about 4% in the fourth quarter.
This trajectory puts Delta in a good position for 2018. It's entering the year with strong revenue momentum, but the carrier will still face relatively easy year-over-year comparisons for most of 2018.
The outlook for American Airlines and United Continental is less sanguine. American posted a 4.5% increase in revenue per available seat mile during the first half of 2017 -- well ahead of Delta -- giving it tougher year-over-year comparisons entering 2018. Meanwhile, United will face fairly easy comparisons but entered the new year with unit revenue in a tailspin.
Tax reform is handing Delta a big windfall
Tax reform is a second factor that could boost Delta Air Lines stock this year. At its investor day last month, the company disclosed that a reduction in the statutory corporate tax rate from 35% to 20% would boost its estimated 2018 EPS by $1.00-$1.25. The statutory rate has been set at 21%, so Delta will get most of that projected savings.
In addition, the tax reform bill creates incentive for capital spending by allowing companies to fully write off capital expenditures for the next five years. That's great timing for Delta, which is in the early innings of a major fleet renewal project.
As a result, Delta probably won't owe any cash taxes until 2020, a year later than previously expected. Even then, its cash tax rate will probably be just 12%-15%. Delta should have more cash freed up to spend on dividends and share buybacks in the next few years.
Execution will be critical
By the end of 2017, the market price of Gulf Coast jet fuel was around $1.90 per gallon, up about $0.35 year over year. This increase will represent a 3- to 4-percentage-point pre-tax margin headwind for most airlines in 2018.
This situation is particularly dangerous for American Airlines and United Continental. Not only will they potentially have a harder time producing robust unit revenue growth in 2018, but they're also starting from a weaker position. Both American and United are on track to produce single-digit pre-tax margins in 2017, compared with around 13% for Delta Air Lines.
Thus, Delta Air Lines stock could benefit from a "flight to quality" in 2018 as investors spurn underperforming carriers in favor of higher-margin airlines. That said, Delta will need to show that it can hold its pre-tax margin steady to win investors' favor.
That means the company can't afford any of the periodic unit revenue reversals that have plagued it in recent years. Delta Air Lines also needs to make good on its commitment to reduce non-fuel unit cost growth to a maximum of 2% -- and preferably closer to 0%. 2018 could be a breakout year for Delta Air Lines stock, but the company will have to navigate some tricky obstacles to make that happen.
10 stocks we like better than Delta Air Lines
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Delta Air Lines wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of January 2, 2018
Adam Levine-Weinberg owns shares of Delta Air Lines. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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A combination of low fuel prices, steady economic growth, and business travelers' preference for Delta over American Airlines (NASDAQ: AAL) and United Continental (NYSE: UAL) drove these strong results. Thus, Delta Air Lines stock could benefit from a "flight to quality" in 2018 as investors spurn underperforming carriers in favor of higher-margin airlines. Delta Air Lines also needs to make good on its commitment to reduce non-fuel unit cost growth to a maximum of 2% -- and preferably closer to 0%.
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A combination of low fuel prices, steady economic growth, and business travelers' preference for Delta over American Airlines (NASDAQ: AAL) and United Continental (NYSE: UAL) drove these strong results. Two relatively recent developments -- Delta's return to unit revenue growth and corporate tax reform -- could make 2018 the year that Delta Air Lines stock finally breaks out. It's entering the year with strong revenue momentum, but the carrier will still face relatively easy year-over-year comparisons for most of 2018.
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A combination of low fuel prices, steady economic growth, and business travelers' preference for Delta over American Airlines (NASDAQ: AAL) and United Continental (NYSE: UAL) drove these strong results. Two relatively recent developments -- Delta's return to unit revenue growth and corporate tax reform -- could make 2018 the year that Delta Air Lines stock finally breaks out. Revenue momentum has returned Throughout 2015 and 2016, Delta Air Lines -- and most of its airline industry peers -- faced severe unit revenue pressure.
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A combination of low fuel prices, steady economic growth, and business travelers' preference for Delta over American Airlines (NASDAQ: AAL) and United Continental (NYSE: UAL) drove these strong results. Two relatively recent developments -- Delta's return to unit revenue growth and corporate tax reform -- could make 2018 the year that Delta Air Lines stock finally breaks out. In 2017, it became far more urgent for airlines to get unit revenue growing, as jet fuel prices started to rise again and labor costs climbed.
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7221.0
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2018-01-08 00:00:00 UTC
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American Airlines and Southwest Hop on the Tax-Cut Employee Bonus Bandwagon
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AAL
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https://www.nasdaq.com/articles/american-airlines-and-southwest-hop-tax-cut-employee-bonus-bandwagon-2018-01-08
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nan
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nan
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The major cut to the corporate tax rate that Republicans in Washington just enacted will be a windfall for U.S. corporations, a few of which are making a point of passing some of their good fortune on to their employees.
But as host Mac Greer and guests Matt Argersinger and Jason Moser of Million Dollar Portfolio point out in this segment of the MarketFoolery podcast, one-time bonuses like those issued by leading passenger carriers American Airlines (NASDAQ: AAL) and Southwest Airlines (NYSE: LUV) are more PR moves than anything else. So where will the lion's share of these corporate tax gifts get spent? And looking specifically at these two companies and their industry, what is the outlook for airlines? The Fools discuss.
A full transcript follows the video.
10 stocks we like better than Wal-Mart
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, the Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Wal-Mart wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of January 2, 2018
The author(s) may have a position in any stocks mentioned.
This video was recorded on Jan. 3, 2018.
Mac Greer: Let's go ahead and start with more news about the new tax law, and companies paying bonuses. Matt, this time, news that's American Airlines and Southwest both announcing plans to give employees a $1,000 bonus due to the new tax law. That came out on Tuesday, that announcement. Now, Matt, there's been a lot of speculation about how companies might use their tax savings. We're starting to get some evidence, based on these bonuses. Southwest also saying they're going to exercise an option to buy 40 jets from Boeing . What do you make of it all?
Matt Argersinger: This comes on the heels of news from Wells Fargo doing something similar. A few other companies -- American Express , I think, was also paying one-time bonuses to employees. These are nice, and no one is going to complain about getting an extra thousand dollars in a paycheck. But something like this reeks of public-relations opportunism. "Hey, we got a big corporate tax break, so let's do something nice in the short term for employees." It certainly helps the image. It helps the CEO. It's a nice story. But this kind of stuff in the long term isn't going to mean a lot for workers or how corporations employ capital.
I think why this could be a little different, and why we might see more hiring and more investment going forward is, there's been a permanent change to the corporate tax rate. It's down to 21% from 35%. So if I'm the CFO of a company, any company, especially a growing company in the U.S., I'm not spending a lot of time now looking for tax savings abroad or fishing for loopholes in the tax code where I can make more on the bottom line, because now essentially, I live in a tax haven in the U.S. So I feel like we're going to see a lot more evidence as the year goes on about more investment.
I know Jason is going to make a point -- not all of it is going to be really effectively hiring or raising wages or things like that that we'd like to see. But I think it's going to have a real positive impact on corporations and employees going forward.
Greer: That's interesting, because a lot of the speculation, Jason, leading up to the tax bill, there were surveys, and a lot of people speculating that these companies are primarily going to take those tax savings and use them for share buybacks and maybe hike dividends. And Matt, you seem to be saying, maybe not so fast.
Argersinger: I think that's going to be good, and I think it's going to be great for shareholders and investors like us. But I do think, because there's been a permanent change in the tax code versus previous times when we've had temporary special one-year tax things you can do, it is going to have an impact. It might not be as great, and I think a lot of those new dollars are going to go to buybacks and dividends. But I think there's going to be some meaningful reinvestment in business going forward as well.
Jason Moser: I don't disagree. I feel like we're going to see a little bit of a lot of it. You have to go back and look at history to give us some ideas of what might be done with this money. Go back to 2004, where there was a tax holiday. It was part of the American Jobs Creation Act. Facts that went back and put some numbers together, and overwhelmingly that tax holiday money was used for share buybacks and dividends, whether they be special dividends or increases into the regular dividend. So that's great. As an investor, generally speaking, you have to feel pretty good about that.
Now, the flip side of that is, we also see the numbers bear out over time that companies usually do a pretty crappy job at share buybacks. They buy back when the stock is at all-time highs, and then, when the bottom falls out, they really tighten the purse strings. And really, you kind of want to see them take advantage of those buybacks when the stock is cratering. And that can be a little bit of a difficult thing to do sometimes, because perhaps these companies don't necessarily have these vast financial resources. I think we're going to see a lot of these vast financial resources open up here with this tax holiday, or this new tax structure, coming in.
To me, I look at these $1,000 bumps that all of these companies are offering, and yeah, on the surface it's great. It does offer some good publicity. It's a wonderful headline for these companies. A little bit of a tip of the cap to the lower tax rate makes everybody feel good, and it certainly gets folks on both sides of the argument arguing a little bit more. It's just a drop in the bucket, though. It's a drop in the bucket, it's a one time thing, and it really doesn't tell us what they're going to do beyond that. We'd love to see them spend more money. The only thing that's going to really tell us that is hindsight, though -- looking back and actually seeing if actions do, in fact, speak louder than words.
But I think Matt made a good point there. This gives a lot of CFOs -- their typical mandate is to figure out how to minimize that tax rate. They don't have to focus as much, at least. I think they're going to continue to try to figure out how to get that tax rate even lower, because generally speaking, people don't want to pay taxes. I get that. But by the same token, this is going to give them a little more transparency, a little bit more of an ability to plan for the future. And I think that could ultimately be a good thing.
Argersinger: Part of the dilemma here is, U.S. corporations in particular didn't need this. If you look at the balance sheets of most U.S. corporations, great shape. Lots of cash; very low-cost debt. Whether or not you have a 35% tax rate or a 21% tax rate, it was fine. They were making plenty of money. So I think one thing you will see, in addition to buybacks and dividends for sure, and maybe a little hiring, a little bit of capital investment, is I think you're going to see more acquisitions now.
Two reasons for that. We're looking for returns now. Corporations are flush, lower tax rate -- where am I going to get the returns? If I can't get it from reinvesting in the business or R&D, new capital investment, or even hiring, I'm going to look where I can make acquisitions to add to the business. And two, I don't want to delve into politics at all here, but from reading conference calls lately, interviews with CEOs, there's at least a sense that the climate is more business-friendly. This administration, for all it's worth, is a little more business-friendly. So the idea of doing big corporate deals, unless there's some kind of angle there that our favorite president doesn't like, probably going to get the green light. And that's in regard to the later stages of a bull market as well. You're going to see some big acquisitions. 2018 might even be a record year for it.
Greer: Let's pivot to the two companies here that we're talking about, Southwest and American Airlines. Matt, I know in the past year, you've had some bullish things to say about airlines. What do you think about the airlines going forward?
Argersinger: I think it's a great time to be interested in buying or investing in airlines. For reasons I've said before, the consolidation we've seen, the time they've taken to improve their balance sheets, the pricing power that they have now, the hub-and-spoke routes that have been made more efficient for airports and things like that, it favors the big four airlines in the U.S. So when I see things like Southwest announcing that they're executing a contract by, I forget what it was, how many more planes from Boeing. Delta made a big deal with Airbus recently to buy new planes. These are big investments they're making, because they see the opportunities, they see the pricing power, they see a future where oil prices aren't going to crush them anymore. I'm a big fan of investing in airlines right now.
Greer: Well, this may be totally unfair, but I have some breaking news that may weigh on your investing thesis. This is courtesy of cnbc.com. " Alaska Airlines is calling in an exterminator after the company says a rat boarded one of its planes at Oakland International Airport in California, and forced it to cancel the flight."
Argersinger: Man. You know, I'm reassessing my thesis right now, Mac.
Greer: Now, what strikes you as odd about that sentence? Because I've been obsessed with this story. Let me read it again. "Alaska Airlines is calling in an exterminator after the company says a rat boarded one of its planes." Can a rat board a plane? Doesn't boarding suggest permission and intent?
Argersinger: Yeah, it does seem strange to me. Did he go through customs? Did he go through the luggage?
Greer: He jumped on the plane from the jetway. But you can't board a plane, can you, unless you intend to? And someone gives you permission?
Moser: Well, I don't know that permission is necessary.
Greer: Can a rat board a plane? Marketfoolery@fool.com.
Argersinger: Let us know.
Greer: That's the question. I don't know. I think that's the wrong word. It's not Stuart Little here. He's not getting his boarding pass.
Moser: A rat was found. Boarding the plane. That really implies that someone saw him. And then, you're letting a rat on the plane?
Greer: No!
Argersinger: Here's the question --
Moser: Snuck on the plane. Hopped on a plane.
Greer: Stormed the plane.
Moser: There you go.
Argersinger: -- if I'm a passenger, is the plane now not moving because there's a rat there? And poor passengers have to wait --
Greer: They canceled the flight. They pulled everyone off.
Argersinger: Oh, no way.
Greer: Yeah, no, I love this. "Alaska Airlines says it will resume using the plane when a professional exterminator certifies that it is rodent-free."
Argersinger: I guarantee you, if you ask 95% of the passengers on that plane, and they said, "Hey, we can either fly with a rat on board or we can cancel."
Greer: No way.
Argersinger: You wouldn't fly with a rat on board?
Greer: No, because he could chew through the cables. No way. I mean, if it's like Stuart Little , if he truly boarded the plane and he has a little carry-on and he's well-behaved, that's fine. But most rats aren't that.
Argersinger: So you're flying home after the holidays, or for the holidays --
Greer: No. You have to think what the rat could do. He could get in the cockpit and chew through the autopilot or something. I don't know.
Argersinger: I guess that's true.
Greer: Not that you could chew through the autopilot. But I'm just thinking, it just takes one cable.
Argersinger: That's true.
Moser: It's better than a scorpion. A few months back, there were reports of a scorpion that was found on the plane, and that, to me, that makes a rat a little more tolerable.
Greer: I'd take a scorpion before the rat.
Argersinger: There would have to be a dozen snakes on the plane before I would be like, "Cancel my flight." I want to go home.
Greer: Let's not lose focus here. The issue here is, I don't think a rat can, quote, "board" a plane. I think "board" suggests permission and intent.
Argersinger: Yeah.
Moser: I agree.
Greer: This is important.
Moser: They probably fired the employee that actually let the rat board. That's what you're telling me.
Greer: Exactly. Then again, if the rat had the wherewithal to buy a ticket and present a boarding pass in a timely fashion...
Moser: That's a smart rat.
Greer: There you go. So, moving on. [laughs] That's so unfair. That doesn't change your thesis on the airlines?
Argersinger: No, I'm still bullish on airlines.
Greer: OK.
Jason Moser has no position in any of the stocks mentioned. Mac Greer has no position in any of the stocks mentioned. Matthew Argersinger owns shares of Delta Air Lines and has the following options: long January 2019 $65 calls on American Express, short April 2018 $97.50 calls on American Express, and short January 2018 $45 puts on Delta Air Lines. The Motley Fool recommends American Express. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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But as host Mac Greer and guests Matt Argersinger and Jason Moser of Million Dollar Portfolio point out in this segment of the MarketFoolery podcast, one-time bonuses like those issued by leading passenger carriers American Airlines (NASDAQ: AAL) and Southwest Airlines (NYSE: LUV) are more PR moves than anything else. Matt, this time, news that's American Airlines and Southwest both announcing plans to give employees a $1,000 bonus due to the new tax law. For reasons I've said before, the consolidation we've seen, the time they've taken to improve their balance sheets, the pricing power that they have now, the hub-and-spoke routes that have been made more efficient for airports and things like that, it favors the big four airlines in the U.S.
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But as host Mac Greer and guests Matt Argersinger and Jason Moser of Million Dollar Portfolio point out in this segment of the MarketFoolery podcast, one-time bonuses like those issued by leading passenger carriers American Airlines (NASDAQ: AAL) and Southwest Airlines (NYSE: LUV) are more PR moves than anything else. Matt, this time, news that's American Airlines and Southwest both announcing plans to give employees a $1,000 bonus due to the new tax law. Matthew Argersinger owns shares of Delta Air Lines and has the following options: long January 2019 $65 calls on American Express, short April 2018 $97.50 calls on American Express, and short January 2018 $45 puts on Delta Air Lines.
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But as host Mac Greer and guests Matt Argersinger and Jason Moser of Million Dollar Portfolio point out in this segment of the MarketFoolery podcast, one-time bonuses like those issued by leading passenger carriers American Airlines (NASDAQ: AAL) and Southwest Airlines (NYSE: LUV) are more PR moves than anything else. So if I'm the CFO of a company, any company, especially a growing company in the U.S., I'm not spending a lot of time now looking for tax savings abroad or fishing for loopholes in the tax code where I can make more on the bottom line, because now essentially, I live in a tax haven in the U.S. Greer: That's interesting, because a lot of the speculation, Jason, leading up to the tax bill, there were surveys, and a lot of people speculating that these companies are primarily going to take those tax savings and use them for share buybacks and maybe hike dividends.
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But as host Mac Greer and guests Matt Argersinger and Jason Moser of Million Dollar Portfolio point out in this segment of the MarketFoolery podcast, one-time bonuses like those issued by leading passenger carriers American Airlines (NASDAQ: AAL) and Southwest Airlines (NYSE: LUV) are more PR moves than anything else. Greer: Can a rat board a plane? Argersinger: -- if I'm a passenger, is the plane now not moving because there's a rat there?
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7222.0
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2018-01-08 00:00:00 UTC
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Noteworthy Monday Option Activity: JCI, AAL, UTX
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AAL
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https://www.nasdaq.com/articles/noteworthy-monday-option-activity-jci-aal-utx-2018-01-08
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nan
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nan
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Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Johnson Controls International plc (Symbol: JCI), where a total volume of 44,647 contracts has been traded thus far today, a contract volume which is representative of approximately 4.5 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 78.1% of JCI's average daily trading volume over the past month, of 5.7 million shares. Particularly high volume was seen for the $39 strike call option expiring February 16, 2018 , with 20,232 contracts trading so far today, representing approximately 2.0 million underlying shares of JCI. Below is a chart showing JCI's trailing twelve month trading history, with the $39 strike highlighted in orange:
American Airlines Group Inc (Symbol: AAL) saw options trading volume of 26,900 contracts, representing approximately 2.7 million underlying shares or approximately 70.9% of AAL's average daily trading volume over the past month, of 3.8 million shares. Particularly high volume was seen for the $55 strike call option expiring January 19, 2018 , with 5,741 contracts trading so far today, representing approximately 574,100 underlying shares of AAL. Below is a chart showing AAL's trailing twelve month trading history, with the $55 strike highlighted in orange:
And United Technologies Corp (Symbol: UTX) options are showing a volume of 17,327 contracts thus far today. That number of contracts represents approximately 1.7 million underlying shares, working out to a sizeable 53.4% of UTX's average daily trading volume over the past month, of 3.2 million shares. Particularly high volume was seen for the $135 strike call option expiring February 16, 2018 , with 3,013 contracts trading so far today, representing approximately 301,300 underlying shares of UTX. Below is a chart showing UTX's trailing twelve month trading history, with the $135 strike highlighted in orange:
For the various different available expirations for JCI options , AAL options , or UTX options , visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Particularly high volume was seen for the $55 strike call option expiring January 19, 2018 , with 5,741 contracts trading so far today, representing approximately 574,100 underlying shares of AAL. Below is a chart showing JCI's trailing twelve month trading history, with the $39 strike highlighted in orange: American Airlines Group Inc (Symbol: AAL) saw options trading volume of 26,900 contracts, representing approximately 2.7 million underlying shares or approximately 70.9% of AAL's average daily trading volume over the past month, of 3.8 million shares. Below is a chart showing AAL's trailing twelve month trading history, with the $55 strike highlighted in orange: And United Technologies Corp (Symbol: UTX) options are showing a volume of 17,327 contracts thus far today.
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Below is a chart showing JCI's trailing twelve month trading history, with the $39 strike highlighted in orange: American Airlines Group Inc (Symbol: AAL) saw options trading volume of 26,900 contracts, representing approximately 2.7 million underlying shares or approximately 70.9% of AAL's average daily trading volume over the past month, of 3.8 million shares. Particularly high volume was seen for the $55 strike call option expiring January 19, 2018 , with 5,741 contracts trading so far today, representing approximately 574,100 underlying shares of AAL. Below is a chart showing AAL's trailing twelve month trading history, with the $55 strike highlighted in orange: And United Technologies Corp (Symbol: UTX) options are showing a volume of 17,327 contracts thus far today.
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Below is a chart showing JCI's trailing twelve month trading history, with the $39 strike highlighted in orange: American Airlines Group Inc (Symbol: AAL) saw options trading volume of 26,900 contracts, representing approximately 2.7 million underlying shares or approximately 70.9% of AAL's average daily trading volume over the past month, of 3.8 million shares. Particularly high volume was seen for the $55 strike call option expiring January 19, 2018 , with 5,741 contracts trading so far today, representing approximately 574,100 underlying shares of AAL. Below is a chart showing AAL's trailing twelve month trading history, with the $55 strike highlighted in orange: And United Technologies Corp (Symbol: UTX) options are showing a volume of 17,327 contracts thus far today.
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Below is a chart showing JCI's trailing twelve month trading history, with the $39 strike highlighted in orange: American Airlines Group Inc (Symbol: AAL) saw options trading volume of 26,900 contracts, representing approximately 2.7 million underlying shares or approximately 70.9% of AAL's average daily trading volume over the past month, of 3.8 million shares. Particularly high volume was seen for the $55 strike call option expiring January 19, 2018 , with 5,741 contracts trading so far today, representing approximately 574,100 underlying shares of AAL. Below is a chart showing AAL's trailing twelve month trading history, with the $55 strike highlighted in orange: And United Technologies Corp (Symbol: UTX) options are showing a volume of 17,327 contracts thus far today.
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7223.0
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2018-01-06 00:00:00 UTC
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How to Invest in Travel Stocks
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AAL
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https://www.nasdaq.com/articles/how-invest-travel-stocks-2018-01-06
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nan
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nan
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Worth an estimated $2.3 trillion last year, the global travel and tourism market is one of the biggest industries in the world. As standards of living around the world have improved and travel has become cheaper, the industry has steadily expanded as more people have money to spend on discretionary trips and tourism. Traveling internationally is much more affordable than it once was, and the number of international tourist arrivals more than doubled from 2005 to 2015 to 1.19 billion. While the industry is steadily growing, travel companies and stocks tend to be macroeconomically sensitive as tourism is dependent on discretionary spending, and recessions or global crises like 9/11 can crush the industry.
Investors in travel stocks will want to focus on one or more of the four major publicly traded components: Big chain hotels like Marriott (NASDAQ: MAR) and Hilton (NYSE: HLT) , commercial airlines like United Continental (NYSE: UAL) , American Airlines (NASDAQ: AAL) , and Delta Air Lines (NYSE: DAL) , online travel agencies like Priceline Group (NASDAQ: PCLN) and Expedia (NASDAQ: EXPE) that help people save money on hotel and airfare bookings, and finally cruise lines like Royal Caribbean (NYSE: RCL) and Carnival Cruise Lines (NYSE: CCL) , which may be the most economically sensitive sector.
The chart below shows the size and recent performance of these stocks.
Source: YCharts
Let's take a closer look at each subsector in the travel industry to see what each has to offer.
A place to lay your head
Hotel stocks have surged over the past year as a wave of consolidation and a strong global economy have lifted profits. Room rates continue to rise steadily and occupancy rates are also rising, in spite of the threat from Airbnb and other home rental services. In fact, hotel groups have been engaged in a regulatory war against Airbnb, accusing the $31 billion start-up of operating illegal hotels and encouraging cities to crack down on the site.
That threat may have prompted deals like Marriott's 2016 acquisition of Starwood as Airbnb now has more available rooms, with 4 million listings, than the top five hotel brands combined. The disruptor continues to grow at a brisk pace as revenue reportedly doubled to $1 billion in the last quarter and the company has been profitable on an EBITDA basis for 17 months. Airbnb has also been targeting business travelers, aiming at a core market for hotels. Still, for now it seems that hotels and Airbnb can coexist. If the global economy remains strong, hotel stocks should continue to do well. Keep an eye on occupancy and room rates. If both keep rising, hotel stocks should too.
We have liftoff
For years, airlines were one of the least profitable industries as overcompetition led to price wars that ate into profits and unpredictable economic conditions forced companies into bankruptcy or mergers. Today, just four airlines, American, Delta, United, and Southwest , claim more than 80% of the U.S. airline market. As a result, profits have increased in recent years thanks in part to lower fuel prices. Still, more recently fuel prices have begun rising again, and competition seems to be increasing as shares of one-time stock market darling Hawaiian Holdings fell sharply due to incoming competition in the Hawaiian market.
Today, airline stocks look cheap with P/E ratios for major carriers in the low double digits. That could create some opportunity in the industry, but it seems like the usual challenges like oil prices , competition, natural disasters and global turmoil will continue making the sector a volatile one. Pay attention to key industry metrics like PRASM (passenger revenue per average seat mile) as a reflection of the companies' execution.
The disruptors
The advent of the internet changed the nature of travel bookings. No longer do people rely on a travel agent, but instead search for airfares and hotel rooms through online travel agencies. Priceline and Expedia have come to dominate this market over the last decade through a series of acquisitions and no travel stock has done better than Priceline, which has surged more than 1,600% over that time. Competition has increased among OTA's with the debut of Trivago on the public markets and TripAdvisor 's attempts to break into bookings, and Airbnb is also a threat to the industry as hotel rooms are the major source of revenue for these companies.
While Priceline shares dove after its most recent earnings report on weaker-than-expected guidance, the company still looks like a strong bet with its dominance of the European market through Booking.com and other smart acquisitions like Kayak and Momondo. Priceline's international exposure also keeps margins high. With steady growth expected this year and its valuation lower after the recent dip, the company should have another solid year.
Sail the open seas
A historically volatile industry, cruise lines have also done well recently as Royal Caribbean has more than tripled in the last five years. Industry leader Carnival Cruise Lines has lagged behind, but the overall market for cruises still looks strong. Carnival controls nearly half the industry and sees a big opportunity in China, which is just 6% of its market today but is expected to eventually become its biggest one.
Like airlines and hotels, cabin capacity is a key measure to watch as cruise ships need to fill their seats, and also like airlines, fuel is a key cost input so oil prices affect profits. Natural disasters like hurricanes also pose a threat to the industry. Still, profits have been near historic highs recently, riding the strong economy and growing travel market.
For investors considering travel stocks, the two most important issues to watch are macroeconomic factors, which have an outsized impact on expensive, discretionary pursuits like travel and tourism, and Airbnb, which is growing quickly and poses a direct threat to hotels and online travel agencies.
The industry is notoriously volatile, but with the economy humming along, 2018 looks like it will be another strong year for travel stocks.
10 stocks we like better than Carnival
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*
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*Stock Advisor returns as of January 2, 2018
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Priceline Group and TripAdvisor. The Motley Fool recommends Carnival, Expedia, Marriott International, and Trivago. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Investors in travel stocks will want to focus on one or more of the four major publicly traded components: Big chain hotels like Marriott (NASDAQ: MAR) and Hilton (NYSE: HLT) , commercial airlines like United Continental (NYSE: UAL) , American Airlines (NASDAQ: AAL) , and Delta Air Lines (NYSE: DAL) , online travel agencies like Priceline Group (NASDAQ: PCLN) and Expedia (NASDAQ: EXPE) that help people save money on hotel and airfare bookings, and finally cruise lines like Royal Caribbean (NYSE: RCL) and Carnival Cruise Lines (NYSE: CCL) , which may be the most economically sensitive sector. That could create some opportunity in the industry, but it seems like the usual challenges like oil prices , competition, natural disasters and global turmoil will continue making the sector a volatile one. Competition has increased among OTA's with the debut of Trivago on the public markets and TripAdvisor 's attempts to break into bookings, and Airbnb is also a threat to the industry as hotel rooms are the major source of revenue for these companies.
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Investors in travel stocks will want to focus on one or more of the four major publicly traded components: Big chain hotels like Marriott (NASDAQ: MAR) and Hilton (NYSE: HLT) , commercial airlines like United Continental (NYSE: UAL) , American Airlines (NASDAQ: AAL) , and Delta Air Lines (NYSE: DAL) , online travel agencies like Priceline Group (NASDAQ: PCLN) and Expedia (NASDAQ: EXPE) that help people save money on hotel and airfare bookings, and finally cruise lines like Royal Caribbean (NYSE: RCL) and Carnival Cruise Lines (NYSE: CCL) , which may be the most economically sensitive sector. While the industry is steadily growing, travel companies and stocks tend to be macroeconomically sensitive as tourism is dependent on discretionary spending, and recessions or global crises like 9/11 can crush the industry. The Motley Fool recommends Carnival, Expedia, Marriott International, and Trivago.
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Investors in travel stocks will want to focus on one or more of the four major publicly traded components: Big chain hotels like Marriott (NASDAQ: MAR) and Hilton (NYSE: HLT) , commercial airlines like United Continental (NYSE: UAL) , American Airlines (NASDAQ: AAL) , and Delta Air Lines (NYSE: DAL) , online travel agencies like Priceline Group (NASDAQ: PCLN) and Expedia (NASDAQ: EXPE) that help people save money on hotel and airfare bookings, and finally cruise lines like Royal Caribbean (NYSE: RCL) and Carnival Cruise Lines (NYSE: CCL) , which may be the most economically sensitive sector. While the industry is steadily growing, travel companies and stocks tend to be macroeconomically sensitive as tourism is dependent on discretionary spending, and recessions or global crises like 9/11 can crush the industry. For investors considering travel stocks, the two most important issues to watch are macroeconomic factors, which have an outsized impact on expensive, discretionary pursuits like travel and tourism, and Airbnb, which is growing quickly and poses a direct threat to hotels and online travel agencies.
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Investors in travel stocks will want to focus on one or more of the four major publicly traded components: Big chain hotels like Marriott (NASDAQ: MAR) and Hilton (NYSE: HLT) , commercial airlines like United Continental (NYSE: UAL) , American Airlines (NASDAQ: AAL) , and Delta Air Lines (NYSE: DAL) , online travel agencies like Priceline Group (NASDAQ: PCLN) and Expedia (NASDAQ: EXPE) that help people save money on hotel and airfare bookings, and finally cruise lines like Royal Caribbean (NYSE: RCL) and Carnival Cruise Lines (NYSE: CCL) , which may be the most economically sensitive sector. Still, for now it seems that hotels and Airbnb can coexist. Still, profits have been near historic highs recently, riding the strong economy and growing travel market.
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7224.0
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2018-01-04 00:00:00 UTC
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"Culture" Has a High Cost at American Airlines
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AAL
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https://www.nasdaq.com/articles/culture-has-high-cost-american-airlines-2018-01-04
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nan
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For the past year or so, American Airlines ' (NASDAQ: AAL) top management has spent a lot of time talking about making culture a competitive advantage. American has faced a fair amount of labor discord in the past, so the company's leadership wants to reenergize front-line employees, with the ultimate aim of improving customer service.
This is an admirable goal. But unfortunately for American Airlines shareholders, it mainly seems to involve spending a lot of money in order to make sure that employees never get upset about their pay. Considering its plunging profitability, the company can ill afford this expense.
A big tax reform bonus for American Airlines employees
On Tuesday, Southwest Airlines (NYSE: LUV) announced that its board had authorized a $1,000 cash bonus for every employee. Southwest was following the lead of various other companies in celebrating the recently passed tax reform bill by giving employees a bonus.
Later that day, American Airlines announced that it, too, would pay a $1,000 cash bonus to every employee. Management estimated the cost of these bonuses at $130 million.
Yet American Airlines won't actually see a tangible benefit from the tax reform bill for many years . While it will be able to report a lower tax rate on its financial statements, the tax bill has no near-term impact on American's cash flow. The company is sitting on more than $10 billion of net operating loss carryforwards related to its pre-bankruptcy losses, and until those are exhausted -- sometime in the 2020s -- it won't owe any cash taxes.
That's quite different from Southwest Airlines' situation. Southwest has been profitable for more than four decades, so it pays taxes every year and will see huge cash savings starting in 2018.
A familiar situation
American Airlines' decision to pay $1,000 employee bonuses represents yet another instance of the company writing a big check to smooth over potential labor issues.
Most notably, last April the company gave its pilots and flight attendants a significant pay boost to reach industry-best levels -- even though neither work group's contract was due to expire until late 2019/early 2020. That decision immediately increased costs by $350 million annually.
Incidentally, while American Airlines has been incurring all of these extra costs in an effort to please its employees, employee satisfaction isn't exactly stellar. The company's Glassdoor rating of 3.8 puts it in the middle of the pack: ahead of most low-cost carriers, but well behind industry leaders Delta Air Lines and Southwest Airlines.
American Airlines can't afford these incremental costs
If American Airlines were extremely profitable, ensuring that its employees always had industry-leading pay might be a good long-term strategy. However, American's adjusted pre-tax margin probably fell to less than 9% last year, down from 12.6% in 2016 and 15.3% in 2015.
American is likely to face further pressure on its profitability in 2018. The company expects non-fuel unit costs to increase a very reasonable 2% year over year. However, the price of Gulf Coast jet fuel has spiked higher in the last few months, surpassing $1.90/gallon in late December. That's more than 20% higher than the full-year average price for 2017.
Unless fuel prices subside, American Airlines will need to increase unit revenue by about 5% this year just to hold its profit margin flat. That will be tough to accomplish, given that the carrier faces some of the toughest year-over-year unit revenue comparisons in the industry.
Additionally, while American Airlines had nearly $2 billion of excess cash (above its $7 billion liquidity target) at the end of 2016, its fourth-quarter earnings report will probably show that it has exhausted most of this cushion. Thus, American's decision to pay $130 million of bonuses to employees will force it to further reduce its capital return program in 2018 -- making American Airlines stock even less enticing for investors.
10 stocks we like better than American Airlines Group
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and American Airlines Group wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of January 2, 2018
Adam Levine-Weinberg owns shares of Delta Air Lines. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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For the past year or so, American Airlines ' (NASDAQ: AAL) top management has spent a lot of time talking about making culture a competitive advantage. American has faced a fair amount of labor discord in the past, so the company's leadership wants to reenergize front-line employees, with the ultimate aim of improving customer service. A familiar situation American Airlines' decision to pay $1,000 employee bonuses represents yet another instance of the company writing a big check to smooth over potential labor issues.
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For the past year or so, American Airlines ' (NASDAQ: AAL) top management has spent a lot of time talking about making culture a competitive advantage. A big tax reform bonus for American Airlines employees On Tuesday, Southwest Airlines (NYSE: LUV) announced that its board had authorized a $1,000 cash bonus for every employee. A familiar situation American Airlines' decision to pay $1,000 employee bonuses represents yet another instance of the company writing a big check to smooth over potential labor issues.
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For the past year or so, American Airlines ' (NASDAQ: AAL) top management has spent a lot of time talking about making culture a competitive advantage. A big tax reform bonus for American Airlines employees On Tuesday, Southwest Airlines (NYSE: LUV) announced that its board had authorized a $1,000 cash bonus for every employee. American Airlines can't afford these incremental costs If American Airlines were extremely profitable, ensuring that its employees always had industry-leading pay might be a good long-term strategy.
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For the past year or so, American Airlines ' (NASDAQ: AAL) top management has spent a lot of time talking about making culture a competitive advantage. A big tax reform bonus for American Airlines employees On Tuesday, Southwest Airlines (NYSE: LUV) announced that its board had authorized a $1,000 cash bonus for every employee. Unless fuel prices subside, American Airlines will need to increase unit revenue by about 5% this year just to hold its profit margin flat.
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7225.0
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2018-01-04 00:00:00 UTC
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At 52-Week Highs, Will FedEx & UPS Continue to Rally in 2018?
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AAL
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https://www.nasdaq.com/articles/at-52-week-highs-will-fedex-ups-continue-to-rally-in-2018-2018-01-04
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The biggest overhaul in U.S. tax code in 30 years has been a boon for package delivery giants like FedEx Corp. FDX and United Parcel Service UPS . The $1.5 trillion package, converted into law (Tax Cut and Jobs Act) on Dec 22, reduces corporate taxes from 35% to 21%. The significant reduction in corporate tax rate is likely to aid the above-mentioned companies. We note that the effective tax rate at FedEx was 35.4% in the first half of fiscal 2018.
Riding on this momentum, shares of FedEx and UPS that dominate and define the Zacks Air Freight and Cargo Industry , hit their respective 52-week high levels on Jan 3, 2018. While FedEx shares scaled a 52-week high of $261.57 during the trading session, the UPS stock touched its highest point of $126.69.
Apart from the significant drop in corporate tax rate, the new law allows these companies to deduct their capital expenditures from taxable income in the year of their occurrence, which was not allowed earlier. This aspect hugely favors companies like FedEx and UPS as they invest substantially toward capital expenditure.
Naturally, their tax bills for the year would be lowered significantly due to higher deductions. This, in turn, will leave more cash in the hands of these companies to fund their capital expenditures, acquisitions and share repurchases, among others.
Holiday Season - Another Catalyst
The holiday season every year presents a big opportunity to companies like FedEx and UPS to boost their revenues. It is normally considered a busy period for such companies as shipping volumes tend to surge.
As is the case every year, the companies left no stone unturned to shine brightly in the most recent holiday season. To meet the surge in demand, FedEx hired more than 50,000 seasonal workers this time. Meanwhile, UPS hired around 95,000 seasonal workers.
In fact, according to Reuters report both these Zacks Rank #3 (Hold) companies had a highly successful holiday season buoyed by strong e-commerce growth. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Dividends/Buybacks Attest Solid Financial Health
Financial prosperity of FedEx and UPS is reflected in the fact that both the companies have hiked their respective dividend payouts in 2017. In February, UPS raised its quarterly dividend by 6.4% to 83 cents per share ($3.32 on an annualized basis).
During the first nine months of the year, the company paid approximately $2.1 billion as dividend to shareholders. It also bought back bought back 12.3 million shares for about $1.4 billion in the same period.
FedEx hiked its quarterly dividend by 25% to 50 cents a share (or $2 annually) in June. Needless to say, as investors prefer an income generating stock, a high dividend paying one is much coveted. To this end, investors are always on the lookout for companies that have a track record of consistent and incremental dividend payments.
Price Performance
Shares of both UPS and FedEx have outperformed the S&P 500 Index in the last six months. While, UPS has gained 14.3%, FedEx has rallied 20%. The S&P 500 Index has gained only 8% in the same period.
Will the Rally Continue in 2018?
With the tax-bill becoming a law in the final month of 2017, stocks like FedEx and UPS are likely to be huge beneficiaries in 2018. The new tax law is likely to boost their share prices further in the current year.
FedEx has already stated that the new tax regime is expected to boost fiscal 2018 (ending May 31, 2018) earnings per share in the range of $4.40 to $5.50 (before mark-to-market year end pension accounting adjustments, primarily due to the revaluation of the company's net deferred tax liabilities).
Furthermore, FedEx and UPS are likely to continue with their shareholder-friendly activities in 2018 due to the new tax law. Therefore, a hike in dividends from both the companies can be anticipated in the year.
In fact, the new tax regime is a positive for not only these two companies but the other transportation players as well. Evidently, Southwest Airlines LUV and American Airlines Group AAL announced bonuses worth $1,000 per employee, following the tax overhaul.
Wall Street's Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It's a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Southwest Airlines Company (LUV): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
United Parcel Service, Inc. (UPS): Free Stock Analysis Report
FedEx Corporation (FDX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Evidently, Southwest Airlines LUV and American Airlines Group AAL announced bonuses worth $1,000 per employee, following the tax overhaul. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report United Parcel Service, Inc. (UPS): Free Stock Analysis Report FedEx Corporation (FDX): Free Stock Analysis Report To read this article on Zacks.com click here. The biggest overhaul in U.S. tax code in 30 years has been a boon for package delivery giants like FedEx Corp. FDX and United Parcel Service UPS .
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Evidently, Southwest Airlines LUV and American Airlines Group AAL announced bonuses worth $1,000 per employee, following the tax overhaul. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report United Parcel Service, Inc. (UPS): Free Stock Analysis Report FedEx Corporation (FDX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report United Parcel Service, Inc. (UPS): Free Stock Analysis Report FedEx Corporation (FDX): Free Stock Analysis Report To read this article on Zacks.com click here. Evidently, Southwest Airlines LUV and American Airlines Group AAL announced bonuses worth $1,000 per employee, following the tax overhaul. Holiday Season - Another Catalyst The holiday season every year presents a big opportunity to companies like FedEx and UPS to boost their revenues.
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Evidently, Southwest Airlines LUV and American Airlines Group AAL announced bonuses worth $1,000 per employee, following the tax overhaul. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report United Parcel Service, Inc. (UPS): Free Stock Analysis Report FedEx Corporation (FDX): Free Stock Analysis Report To read this article on Zacks.com click here. Apart from the significant drop in corporate tax rate, the new law allows these companies to deduct their capital expenditures from taxable income in the year of their occurrence, which was not allowed earlier.
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7226.0
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2018-01-04 00:00:00 UTC
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Here's Why It's Worth Investing in C.H. Robinson (CHRW) Now
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AAL
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https://www.nasdaq.com/articles/heres-why-its-worth-investing-in-c.h.-robinson-chrw-now-2018-01-04
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nan
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Shares of C.H. Robinson Worldwide CHRW gained 21.6%, outperforming the industry 's rally of 9% in 2017.
What's Behind the Uptick?
The company's efforts to reward shareholders through dividends and share buy backs are impressive. In November 2017, the board of directors approved a 2.2% hike in its quarterly cash dividend to 46 cents per share (or $1.84 annually). Also, C.H. Robinson has an impressive dividend payment history.
Investors always prefer an income-generating stock. Hence, a high dividend-yielding one is obviously much coveted. It goes without saying that investors are always on the lookout for companies with a track record of consistent and incremental dividend payments to put their money on.
Furthermore, C.H. Robinson's efforts to expand globally through mergers are encouraging. The acquisition of Milgram & Company, completed in August 2017, has boosted the company's global presence and will be accretive in the current year. In 2016, it acquired APC Logistics as well. This deal has boosted C.H. Robinson's presence in the Australia- New Zealand region.
New Tax Regime is a Positive
On Dec 22, President Trump signed the much-anticipated tax bill into law (Tax Cut and Jobs Act). The $1.5 trillion tax overhaul package reduces corporate taxes from 35% to 21%. The significant reduction in corporate tax rate is likely to aid C.H. Robinson, for which the effective tax rate was 34.2% in the first nine months of 2017.
Moreover, companies like C.H. Robinson spend significantly for capital expenditures. In the new regime, these companies will be able to deduct their capital expenditures from taxable income immediately, which was not allowed earlier. As a result, their annual tax bills would be lowered significantly owing to higher deductions. This, in turn, will leave more cash in the hands of these companies to fund their capital expenditures, acquisitions and share repurchases, among others.
In fact, the new tax regime is not only a positive for C.H. Robinson but other transportation players like Union Pacific Corporation UNP as well. Evidently, Southwest Airlines LUV and American Airlines Group AAL announced bonuses worth $1,000 per employee, following the tax overhaul.
Earnings Estimates on an Upswing at C.H. Robinson
Upward estimate revisions reflect optimism in a stock's prospects. C.H. Robinson scores impressively on this front as well. The stock has seen the Zacks Consensus Estimate for full-year 2017 and 2018 earnings being revised 1.8% and 4.8% upward, respectively, over the last 90 days.
Taking into account the above-mentioned tailwinds, we believe that the current price represents an attractive entry point for investors. The company's Zacks Rank #2 (Buy) also supports our view. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Wall Street's Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It's a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Southwest Airlines Company (LUV): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Union Pacific Corporation (UNP): Free Stock Analysis Report
C.H. Robinson Worldwide, Inc. (CHRW): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Evidently, Southwest Airlines LUV and American Airlines Group AAL announced bonuses worth $1,000 per employee, following the tax overhaul. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report C.H. This, in turn, will leave more cash in the hands of these companies to fund their capital expenditures, acquisitions and share repurchases, among others.
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Evidently, Southwest Airlines LUV and American Airlines Group AAL announced bonuses worth $1,000 per employee, following the tax overhaul. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report C.H. Robinson Worldwide, Inc. (CHRW): Free Stock Analysis Report To read this article on Zacks.com click here.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report C.H. Evidently, Southwest Airlines LUV and American Airlines Group AAL announced bonuses worth $1,000 per employee, following the tax overhaul. New Tax Regime is a Positive On Dec 22, President Trump signed the much-anticipated tax bill into law (Tax Cut and Jobs Act).
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Evidently, Southwest Airlines LUV and American Airlines Group AAL announced bonuses worth $1,000 per employee, following the tax overhaul. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report C.H. The company's efforts to reward shareholders through dividends and share buy backs are impressive.
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7227.0
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2018-01-04 00:00:00 UTC
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The Zacks Analyst Blog Highlights: American Airlines Group, Southwest Airlines, Ryanair Holdings, Alaska Air Group and United Continental Holdings
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AAL
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https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-american-airlines-group-southwest-airlines-ryanair
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nan
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For Immediate Release
Chicago, IL - Jan 04, 2018 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include American Airlines GroupAAL , Southwest AirlinesLUV , Ryanair HoldingsRYAAY , Alaska Air GroupALK and United Continental HoldingsUAL .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Wednesday's Analyst Blog:
Airline Stock Roundup: New Tax Law Bonuses at American, Southwest
The New Year brought favorable tidings to the employees of airline heavyweights, American Airlines Group and Southwest Airlines, as the carriers announced bonuses worth $1,000 per member, following the tax overhaul. Notably, the $1.5 trillion tax overhaul package signed into law by President Trump reduces corporate taxes from 35% to 21%.
European low-cost carrier, Ryanair Holdings, also grabbed headlines when it released impressive traffic data for December, 2017. The carrier is benefitting from low air fares and expects it to be even lower in the current year.
Meanwhile, issues related to passengers continued to haunt U.S. carriers. Alaska Airlines, the wholly-owned subsidiary of Alaska Air Group, was the latest sufferer in this regard when it was reportedly sued by the family of an elderly lady. The lady died last year following a fall in an escalator at the Portland Airport, Oregon.
Transportation - Airline Industry 5YR % Return
(Read the last Airline Stock Roundup for Dec 27, 2017 ).
Recap of the Past Week's Most Important Stories
1. Ryanair reported a 3% year over year rise in traffic to 9.3 million for December owing to cheap ticket prices. Another important metric, load factor (percentage of seats filled by passengers) improved 1% to 95% as traffic growth outpaced capacity expansion in the same month. In fact, low air fares helped the carrier record a 10% rise in 2017 traffic to 129 million.
2. The tax overhaul is expected to aid airlines significantly. Buoyed by the new tax laws, American Airlines and Southwest Airlines declared bonuses for their respective employees. American Airlines will pay the amount (totaling $130 million) to each of its employee, excluding officers, by Mar 31, 2018. Meanwhile, Southwest will distribute the cash bonus on Jan 8.
Apart from the huge drop in corporate tax rate, the fact that the new laws allow companies to deduct their capital expenditures from taxable income immediately has proved to be favorable for airlines as they will be able to invest toward capital expenditure considerably. As a result, their tax bills for the year would be lowered significantly due to higher deductions. This, in turn, will leave more cash in the hands of these companies to fund their capital expenditures, acquisitions and share repurchases, among others. In this regard, Southwest announced that it will invest significantly toward fleet modernization. In fact, this low-cost carrier converted options on 40 Boeing Max 8s to firm orders. The company also deferred orders for 23 737 Max 7 planes of Boeing until 2023/2024.
Following the tax overhaul, Southwest expects to record a non-cash credit in the range of $1 billion to $1.5 billion in the fourth quarter of 2017. Economic fuel cost per gallon is anticipated in the band of $2-$2.15 in the same quarter.
3. The family of a 75- year old lady, reportedly sued Alaska Airlines and the concerned wheelchair contractor following her death after being injured. Apparently, she arrived in Portland after holidaying in Maui. At the airport, she slipped down an escalator. The family has lodged a complaint pertaining to wrongful death against the concerned parties. Currently, Alaska Air Group carries a Zacks Rank # 3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
4. According to a Reuters report, El Al Airlines of Israel intends to operate non-stop flights (thrice a week) connecting Tel Aviv and San Francisco by Dec 31, 2018 as part of its efforts to expand in North America. The carrier will utilize Boeing 787 Dreamliner planes for flights on the route. This Israel-based carrier will compete with United Continental Holdings on the route, per the report.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free .
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
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Southwest Airlines Company (LUV): Free Stock Analysis Report
Ryanair Holdings PLC (RYAAY): Free Stock Analysis Report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Alaska Air Group, Inc. (ALK): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Stocks recently featured in the blog include American Airlines GroupAAL , Southwest AirlinesLUV , Ryanair HoldingsRYAAY , Alaska Air GroupALK and United Continental HoldingsUAL . Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report Ryanair Holdings PLC (RYAAY): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Another important metric, load factor (percentage of seats filled by passengers) improved 1% to 95% as traffic growth outpaced capacity expansion in the same month.
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Stocks recently featured in the blog include American Airlines GroupAAL , Southwest AirlinesLUV , Ryanair HoldingsRYAAY , Alaska Air GroupALK and United Continental HoldingsUAL . Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report Ryanair Holdings PLC (RYAAY): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: New Tax Law Bonuses at American, Southwest The New Year brought favorable tidings to the employees of airline heavyweights, American Airlines Group and Southwest Airlines, as the carriers announced bonuses worth $1,000 per member, following the tax overhaul.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report Ryanair Holdings PLC (RYAAY): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks recently featured in the blog include American Airlines GroupAAL , Southwest AirlinesLUV , Ryanair HoldingsRYAAY , Alaska Air GroupALK and United Continental HoldingsUAL . Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: New Tax Law Bonuses at American, Southwest The New Year brought favorable tidings to the employees of airline heavyweights, American Airlines Group and Southwest Airlines, as the carriers announced bonuses worth $1,000 per member, following the tax overhaul.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report Ryanair Holdings PLC (RYAAY): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks recently featured in the blog include American Airlines GroupAAL , Southwest AirlinesLUV , Ryanair HoldingsRYAAY , Alaska Air GroupALK and United Continental HoldingsUAL . Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: New Tax Law Bonuses at American, Southwest The New Year brought favorable tidings to the employees of airline heavyweights, American Airlines Group and Southwest Airlines, as the carriers announced bonuses worth $1,000 per member, following the tax overhaul.
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7228.0
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2018-01-03 00:00:00 UTC
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Delta Falls After Raising Q4 Cost Forecasts, Curbing Capacity Growth
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AAL
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https://www.nasdaq.com/articles/delta-falls-after-raising-q4-cost-forecasts-curbing-capacity-growth-2018-01-03
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nan
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nan
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Delta Air Lines ( DAL ) on Wednesday forecast higher fourth-quarter costs, partly a reflection of the power outage at the carrier's Atlanta hub in December that forced some 1,400 flight cancellations , and the carrier left its margin and unit revenue outlook unchanged despite signs of strong demand.
[ibd-display-video id=3061062 width=50 float=left autostart=true] The carrier said nonfuel unit costs, including profit-sharing, likely rose 5.5% vs. a year earlier, up from a forecast for a 5%-5.5% increase given last month. Delta cited the outage, "continued investment in our people and product combined with accelerated depreciation of aircraft retirements" as reasons for the higher costs.
Delta said it expected to take a $25-$50 million hit to pretax income during the fourth quarter due to flight disruptions that resulted from the outage.
The company said it still expects passenger unit revenue to increase around 4% in the fourth quarter, with operating margin holding at around 11% as higher fuel prices continue to weigh against strong sales trends.
Fuel costs should continue to rise for Delta and other carriers. U.S. crude futures rose to $61.63 a barrel on Wednesday, their highest close since December 2014.
Delta also said, as previously indicated, that it expected to book a one-time charge of $150-$200 million in the fourth quarter due to the tax cuts that President Trump signed into law last month.
Analysts generally expect tax cuts to benefit the airlines, but the lower corporate rate will bring down the value of a company's deferred tax assets, or assets that companies can use to lessen their tax burden when they suffer a loss. Banks like Bank of America ( BAC ) and Citigroup ( C ) have forecast multibillion-dollar hits to profits as a result of the tax cuts' effect on those assets.
Shares of Delta slipped 1.85% to 55.69 in the stock market today , but the stock was still in buy range of a 54.16 entry of a cup-with-handle base.
American Airlines ( AAL ) slid 1.25%. In a letter to employees on Tuesday, American Airlines said it would give $1,000 to non-officer employees - a $130 million reward in total - in the first quarter due to the tax cuts. Southwest Airlines ( LUV ) retreated 2.1%. Southwest Airlines on Tuesday also said it would give $1,000 bonuses to employees this month, and it also stepped up its fleet investments with Boeing (BA).
United Airlines (UAL) sank 0.65%.
American Air, Southwest, United Air and other carriers should report December traffic figures in the coming days.
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Delta also cut its Q4 forecast for flight capacity - a measure of an airline's overall flight coverage - to 2.3% growth, down from a range of 2.5%-3.0% given in December. For December, passenger traffic dipped 0.4%, while capacity rose 0.9% and load factor fell 1.1 percentage points to 84.2%.
The monthly figures come as the airline industry gears up for Q4 earnings season and some three weeks after a bullish investor day, when it forecast earnings-per-share growth of 10%-15% this year. But cost management could be more of a focus for Delta and investors in 2018, after the carrier put more money toward its fleet and hiked employee wages last year.
Meanwhile, in the wake of the Atlanta outage, the carrier said on Tuesday that it was "keeping a close eye on" a winter storm brewing off the southeast coast of the U.S. that could drift further north.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines ( AAL ) slid 1.25%. The company said it still expects passenger unit revenue to increase around 4% in the fourth quarter, with operating margin holding at around 11% as higher fuel prices continue to weigh against strong sales trends. Delta also said, as previously indicated, that it expected to book a one-time charge of $150-$200 million in the fourth quarter due to the tax cuts that President Trump signed into law last month.
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American Airlines ( AAL ) slid 1.25%. Delta Air Lines ( DAL ) on Wednesday forecast higher fourth-quarter costs, partly a reflection of the power outage at the carrier's Atlanta hub in December that forced some 1,400 flight cancellations , and the carrier left its margin and unit revenue outlook unchanged despite signs of strong demand. American Air, Southwest, United Air and other carriers should report December traffic figures in the coming days.
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American Airlines ( AAL ) slid 1.25%. Delta Air Lines ( DAL ) on Wednesday forecast higher fourth-quarter costs, partly a reflection of the power outage at the carrier's Atlanta hub in December that forced some 1,400 flight cancellations , and the carrier left its margin and unit revenue outlook unchanged despite signs of strong demand. Analysts generally expect tax cuts to benefit the airlines, but the lower corporate rate will bring down the value of a company's deferred tax assets, or assets that companies can use to lessen their tax burden when they suffer a loss.
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American Airlines ( AAL ) slid 1.25%. Delta Air Lines ( DAL ) on Wednesday forecast higher fourth-quarter costs, partly a reflection of the power outage at the carrier's Atlanta hub in December that forced some 1,400 flight cancellations , and the carrier left its margin and unit revenue outlook unchanged despite signs of strong demand. Fuel costs should continue to rise for Delta and other carriers.
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7229.0
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2018-01-03 00:00:00 UTC
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ISM Manufacturing Index Shows Factory Growth Accelerated In December
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AAL
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https://www.nasdaq.com/articles/ism-manufacturing-index-shows-factory-growth-accelerated-december-2018-01-03
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nan
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nan
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The Institute for Supply Management's manufacturing survey index out Wednesday rose to 59.7 from November's 58.2, as the factory sector's run of strong growth showed no sign of letting up.
[ibd-display-video id=3060740 width=50 float=left autostart=true] Wall Street economists expected the ISM gauge to dip to 58.1. Readings above 50 signal expansion, while those south of 50 suggest contraction.
The new orders index surged to 69.4 from 64.0, while the current production gauge accelerated to 65.8 from 63.9. The employment gauge cooled moderately to a still-strong 57.0 from a red-hot 59.7.
The Dow Jones industrial average, S&P 500 index and Nasdaq composite stayed firm following the ISM release. The Dow, S&P 500 and Nasdaq all hit fresh record highs. The 10-year Treasury yield moved only a touch higher after the report.
Meanwhile, automakers were reporting December U.S. auto sales. Ford ( F ) reported an unexpected increase in sales . General Motors ( GM ) reported a smaller-than-expected decline while Fiat Chrysler ( FCAU ) sales tumbled as the automaker slashes low-margin fleet sales.
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Minutes of the Federal Reserve's December meeting will be released at 2 p.m. ET and could shed light on the outlook for monetary policy in 2018 amid uncertainty about whether muted inflation will persist.
The factory report may lead to more questions over whether growth may be getting too strong. There were more signs on Wednesday that the economy could get extra juice from tax cuts early in 2018. Southwest Airlines ( LUV ) and American Airlines ( AAL ) were the latest to announce a $1,000 bonus for employees.
Before Christmas, Wells Fargo (WFC) and other banks announced a rise in their minimum wage to $15 an hour.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Southwest Airlines ( LUV ) and American Airlines ( AAL ) were the latest to announce a $1,000 bonus for employees. The Institute for Supply Management's manufacturing survey index out Wednesday rose to 59.7 from November's 58.2, as the factory sector's run of strong growth showed no sign of letting up. The Dow Jones industrial average, S&P 500 index and Nasdaq composite stayed firm following the ISM release.
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Southwest Airlines ( LUV ) and American Airlines ( AAL ) were the latest to announce a $1,000 bonus for employees. Stocks To Buy And Watch: Top IPOs, Big And Small Caps, Growth Stocks Looking For The Best Stocks To Buy And Watch? Start Here The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Southwest Airlines ( LUV ) and American Airlines ( AAL ) were the latest to announce a $1,000 bonus for employees. The Institute for Supply Management's manufacturing survey index out Wednesday rose to 59.7 from November's 58.2, as the factory sector's run of strong growth showed no sign of letting up. General Motors ( GM ) reported a smaller-than-expected decline while Fiat Chrysler ( FCAU ) sales tumbled as the automaker slashes low-margin fleet sales.
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Southwest Airlines ( LUV ) and American Airlines ( AAL ) were the latest to announce a $1,000 bonus for employees. The Institute for Supply Management's manufacturing survey index out Wednesday rose to 59.7 from November's 58.2, as the factory sector's run of strong growth showed no sign of letting up. Meanwhile, automakers were reporting December U.S. auto sales.
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7230.0
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2018-01-02 00:00:00 UTC
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Best Airline Buy: Delta, United, or American?
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AAL
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https://www.nasdaq.com/articles/best-airline-buy-delta-united-or-american-2018-01-02
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nan
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nan
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Airline stocks have generally done extremely well over the past decade, as favorable conditions in the industry have lifted the surviving major airlines following extensive consolidation. Among the biggest carriers, Delta Air Lines (NYSE: DAL) , United Continental Holdings (NYSE: UAL) , and American Airlines Group (NASDAQ: AAL) have all taken their fair share of profits from their businesses. Yet more recently, the pace of gains has slowed somewhat for the major airlines, and some investors want to know which of them has the best prospects for a stronger advance in 2018. Let's compare Delta, United, and American in several key metrics to see which looks more attractive currently.
Valuation and stock performance
The three airline stocks saw mixed performance in 2017. Delta led the pack with a 14% rise, and American was only slightly behind by picking up 11%. United, however, suffered an 8% decline.
All of the airline stocks look fairly inexpensive when you look at earnings-based valuations. Income figures for the past 12 months show United trading below 11 times trailing earnings, with Delta coming in a bit above 11 and American just slightly higher at a trailing multiple of 13. When you look at future earnings estimates, Delta takes the lead with a forward multiple of less than 10, but both American and United sport multiples of less than 11 on a forward basis. There's just not that much of a disparity among the three stocks when it comes to valuations.
Dividends
Where there are some big differences between the major airlines is on the dividend front. United Continental doesn't pay a dividend at all, while American has a yield of just 0.7%. Delta, however, is fairly generous with its dividends, having recently boosted its payout above the 2% mark.
To some extent, dividend policies reflect the recent merger experience of the respective airlines. American just came out of bankruptcy a few years ago, and its merger with US Air required some effort to consolidate effectively. United and Continental are still going through growing pains in their merger, even though it took place before the US Air-American deal. Yet Delta has had the most time to solidify its post-merger business with Northwest's old operations, and that has led not only to healthy dividend payments but also big increases, including 50% jumps in each of the past four years. With a payout ratio of just 20%, Delta is the clear winner when it comes to dividends.
Growth profile and risks
These three major airlines have a lot in common, both in terms of growth and risks. For instance, tax reform is likely to benefit all of the airline companies, because their huge capital expenditures should reap increased tax breaks in the coming years, and lower corporate tax rates will help them significantly .
Yet the airlines also have specific positives and negatives. Delta has done a good job of wooing business travelers , topping one key survey in every major category. However, the airline has had difficulty keeping its costs under control, and although some factors like fuel expenses aren't easy to manage, non-fuel costs have risen at a disturbing pace. Capacity growth and newer aircraft should help reduce some costs, but Delta will have to remain vigilant to avoid problems ahead.
For both American and United, the fact that each has extensive losses that they've carried forward for tax purposes means that the benefits of tax reform won't be as apparent as they've been for Delta. Moreover, some analysts worry that American and United are vulnerable to the rise of smaller carriers, which could see more of an immediate impact from tax reform.
Stories involving bad customer experiences have also had an impact on particular airlines. Early in 2017, United had to deal with fallout after a passenger who had boarded an overbooked flight was forcibly removed from the airplane, creating a social media frenzy and regulatory backlash. Computer outages also affected Delta and United , raising concerns about potential vulnerability to cyberattacks.
From a more fundamental basis, American's chief issue appears to be ensuring that the airline can live up to its ambitious projections for future growth while holding competition at bay. United needs to find a strategic vision that's consistent with industry conditions while at the same time making sure that its fleet is well-positioned to deliver on its strategy. And Delta should keep working to improve efficiency and bolster its reputation.
Your best bet?
Based on all of these factors, Delta Air Lines offers the best mix of value, dividend income, and growth potential. United and American have plenty of potential upside, but so far, Delta has done the best job of the three of capitalizing on the rise in the airline industry, and it has a clear path to further success in 2018 and beyond.
10 stocks we like better than United Continental Holdings
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and United Continental Holdings wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of January 2, 2018
Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Among the biggest carriers, Delta Air Lines (NYSE: DAL) , United Continental Holdings (NYSE: UAL) , and American Airlines Group (NASDAQ: AAL) have all taken their fair share of profits from their businesses. Yet Delta has had the most time to solidify its post-merger business with Northwest's old operations, and that has led not only to healthy dividend payments but also big increases, including 50% jumps in each of the past four years. Early in 2017, United had to deal with fallout after a passenger who had boarded an overbooked flight was forcibly removed from the airplane, creating a social media frenzy and regulatory backlash.
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Among the biggest carriers, Delta Air Lines (NYSE: DAL) , United Continental Holdings (NYSE: UAL) , and American Airlines Group (NASDAQ: AAL) have all taken their fair share of profits from their businesses. Based on all of these factors, Delta Air Lines offers the best mix of value, dividend income, and growth potential. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.
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Among the biggest carriers, Delta Air Lines (NYSE: DAL) , United Continental Holdings (NYSE: UAL) , and American Airlines Group (NASDAQ: AAL) have all taken their fair share of profits from their businesses. Airline stocks have generally done extremely well over the past decade, as favorable conditions in the industry have lifted the surviving major airlines following extensive consolidation. United and American have plenty of potential upside, but so far, Delta has done the best job of the three of capitalizing on the rise in the airline industry, and it has a clear path to further success in 2018 and beyond.
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Among the biggest carriers, Delta Air Lines (NYSE: DAL) , United Continental Holdings (NYSE: UAL) , and American Airlines Group (NASDAQ: AAL) have all taken their fair share of profits from their businesses. Delta led the pack with a 14% rise, and American was only slightly behind by picking up 11%. To some extent, dividend policies reflect the recent merger experience of the respective airlines.
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7231.0
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2017-12-24 00:00:00 UTC
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Can Alaska Air Group Regain Its Poise in 2018?
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AAL
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https://www.nasdaq.com/articles/can-alaska-air-group-regain-its-poise-2018-2017-12-24
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nan
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nan
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Just when it seemed headed for a breakout year following its 2016 purchase of Virgin America, Alaska Air Group (NYSE: ALK) has experienced an unexpectedly rough 2017, and its share price has reacted in kind, declining over 16% year to date. Not all of this fortune reversal should be attributed directly to the carrier, as industry headwinds arose which challenged both Alaska and its close competitors. To gauge what 2018 might bring for the Seattle-based airline, let's revisit specific performance issues, as well as the industry trends that shaped the current year.
Integration, recalibration, and arbitration
Practical difficulty and cost creep within the integration of Virgin America, which the company purchased a year ago this month, has proved Alaska's most vexing problem by far in 2017. As I discussed in a recent article on Alaska's current state , combining the two airlines has proved a more onerous task than expected, consuming a great amount of management's attention, and compressing operating margin perhaps more than investors had expected.
The task of pulling together two disparate airlines opened vulnerability to new problems during the year. As it struggled to contain costs while meeting integration timelines, the airline fell off track managing subsidiary Horizon Air during the second half of 2017.
During Alaska Airlines' most recentearnings conference call CEO Doug Tilden explained that an industry trend of regional airline pilots leaving for mainline jobs for higher wages hit Horizon Air just as it was increasing pilot training time for new Embraer 175 aircraft. Caught off guard by a sudden pilot shortage, Horizon ended up canceling flights and temporarily reducing flight schedules, creating an estimated $25 million to $30 million headwind against Alaska Air Group's 3rd quarter 2017 revenue.
Bringing pilot wages up to par was also a focus of consolidated operations in 2017. The company received a decision in its third-party pilot wage arbitration at the end of October and has agreed to a package that increases top-of-scale Alaska Airlines pilots' wages by 16%, and top-of-scale Virgin America pilots' wages by 33%. Management reports that the net impact of this arbitration award will reach $160 million to $165 million annually, which is a bit larger than its pre-award arbitration offer of $140 million.
The pilot wage increase has pushed up cost per available seat mile, ex-fuel, by $20 million for the remainder of the year, from a previous range of 8.35 to 8.40 cents, to a new range of 8.50 to 8.55 cents. More broadly speaking, the long-term impact of the arbitration will produce a drag on the company's operating margin of roughly 1.75 percentage points.
Industry pressures and a glimpse into 2018
Other factors that will challenge performance in 2018 aren't native to Alaska Air Group. Rising fuel costs are a common hurdle for carriers of all sizes. In 2017, Alaska's economic fuel cost (the "all in" price including refining and hedging costs) rose more than 20% to $2 per gallon -- a steep but manageable trend.
Another industry factor, price competition among major carriers, was set into motion when United Airlines (NYSE: UAL) inexplicably decided to grab market share from ultra-low-cost carrier Spirit Airlines (NASDAQ: SAVE) this year. This appears set to continue at least through the first few months of 2018. With a high fixed-cost structure, network and regional carriers have nothing to gain from escalating fare aggression. But Alaska has typically exhibited disciplined revenue management during such periods.
From a view at cruising altitude, none of the industry pressures or internal issues will keep Alaska from regaining its poise and beginning to improve profitability next year. The company expects that the operational integration of Virgin America will be substantially complete by mid-year 2018. From that point, investors can expect that Alaska will be able to exert tighter cost control to bring operating margin back over the 20% line. Because of the internal and external reasons we've discussed, operating margin has hovered above 18% so far this year, after clearing 25% over the first nine months of 2016.
As for revenue, a flurry of new route openings in 2017, and a more aggressive presence in California, will eventually translate into top-line momentum. Alaska has continued to expand capacity near its historic rates. As of its most recent investor update, capacity for full year 2017 (as measured in available seat miles) is expected to hit approximately 7% growth, right in line with a 20-year average.
Finally, the carrier is steadily chipping away at the $2.1 billion in debt incurred to purchase Virgin America. Through nine months of 2017, Alaska Air Group has reduced total long-term debt by $263 million, to $2.7 billion. Net debt, the difference between total debt and the sum of cash and marketable securities on hand, now stands at $961 million. Given Alaska's traditionally strong operating cash flow, it's quite possible that the airline can return to its favored zero net-debt position within two years.
In sum, during 2017, higher merger costs than anticipated, operational hurdles, and industry headwinds combined to throw Alaska Air Group off balance. But long-term shareholders should feel quite comfortable maintaining the carrier's stock in their portfolios. And given a forward price-to-earnings ratio that has drifted down to 11.0, in line with larger, slower-growth peers such as Delta Airlines and American Airlines , Alaska's valuation should tempt those contemplating a new position in its shares.
10 stocks we like better than Alaska Air Group
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Alaska Air Group wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of December 4, 2017
Asit Sharma has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Spirit Airlines. The Motley Fool recommends Embraer-Empresa Brasileira. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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From a view at cruising altitude, none of the industry pressures or internal issues will keep Alaska from regaining its poise and beginning to improve profitability next year. As of its most recent investor update, capacity for full year 2017 (as measured in available seat miles) is expected to hit approximately 7% growth, right in line with a 20-year average. In sum, during 2017, higher merger costs than anticipated, operational hurdles, and industry headwinds combined to throw Alaska Air Group off balance.
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The company received a decision in its third-party pilot wage arbitration at the end of October and has agreed to a package that increases top-of-scale Alaska Airlines pilots' wages by 16%, and top-of-scale Virgin America pilots' wages by 33%. Through nine months of 2017, Alaska Air Group has reduced total long-term debt by $263 million, to $2.7 billion. In sum, during 2017, higher merger costs than anticipated, operational hurdles, and industry headwinds combined to throw Alaska Air Group off balance.
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During Alaska Airlines' most recentearnings conference call CEO Doug Tilden explained that an industry trend of regional airline pilots leaving for mainline jobs for higher wages hit Horizon Air just as it was increasing pilot training time for new Embraer 175 aircraft. The company received a decision in its third-party pilot wage arbitration at the end of October and has agreed to a package that increases top-of-scale Alaska Airlines pilots' wages by 16%, and top-of-scale Virgin America pilots' wages by 33%. Another industry factor, price competition among major carriers, was set into motion when United Airlines (NYSE: UAL) inexplicably decided to grab market share from ultra-low-cost carrier Spirit Airlines (NASDAQ: SAVE) this year.
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Integration, recalibration, and arbitration Practical difficulty and cost creep within the integration of Virgin America, which the company purchased a year ago this month, has proved Alaska's most vexing problem by far in 2017. From a view at cruising altitude, none of the industry pressures or internal issues will keep Alaska from regaining its poise and beginning to improve profitability next year. Through nine months of 2017, Alaska Air Group has reduced total long-term debt by $263 million, to $2.7 billion.
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7232.0
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2017-12-21 00:00:00 UTC
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Noteworthy Thursday Option Activity: VOYA, BTU, AAL
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AAL
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https://www.nasdaq.com/articles/noteworthy-thursday-option-activity-voya-btu-aal-2017-12-21
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nan
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Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in Voya Financial Inc (Symbol: VOYA), where a total of 10,068 contracts have traded so far, representing approximately 1.0 million underlying shares. That amounts to about 63.8% of VOYA's average daily trading volume over the past month of 1.6 million shares. Especially high volume was seen for the $55 strike call option expiring May 18, 2018 , with 5,526 contracts trading so far today, representing approximately 552,600 underlying shares of VOYA. Below is a chart showing VOYA's trailing twelve month trading history, with the $55 strike highlighted in orange:
Peabody Energy Corp (Symbol: BTU) saw options trading volume of 7,464 contracts, representing approximately 746,400 underlying shares or approximately 56.2% of BTU's average daily trading volume over the past month, of 1.3 million shares. Especially high volume was seen for the $39 strike call option expiring January 19, 2018 , with 5,010 contracts trading so far today, representing approximately 501,000 underlying shares of BTU. Below is a chart showing BTU's trailing twelve month trading history, with the $39 strike highlighted in orange:
And American Airlines Group Inc (Symbol: AAL) saw options trading volume of 23,012 contracts, representing approximately 2.3 million underlying shares or approximately 54.4% of AAL's average daily trading volume over the past month, of 4.2 million shares. Especially high volume was seen for the $55 strike call option expiring January 19, 2018 , with 5,625 contracts trading so far today, representing approximately 562,500 underlying shares of AAL. Below is a chart showing AAL's trailing twelve month trading history, with the $55 strike highlighted in orange:
For the various different available expirations for VOYA options , BTU options , or AAL options , visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Especially high volume was seen for the $55 strike call option expiring January 19, 2018 , with 5,625 contracts trading so far today, representing approximately 562,500 underlying shares of AAL. Below is a chart showing BTU's trailing twelve month trading history, with the $39 strike highlighted in orange: And American Airlines Group Inc (Symbol: AAL) saw options trading volume of 23,012 contracts, representing approximately 2.3 million underlying shares or approximately 54.4% of AAL's average daily trading volume over the past month, of 4.2 million shares. Below is a chart showing AAL's trailing twelve month trading history, with the $55 strike highlighted in orange: For the various different available expirations for VOYA options , BTU options , or AAL options , visit StockOptionsChannel.com.
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Below is a chart showing BTU's trailing twelve month trading history, with the $39 strike highlighted in orange: And American Airlines Group Inc (Symbol: AAL) saw options trading volume of 23,012 contracts, representing approximately 2.3 million underlying shares or approximately 54.4% of AAL's average daily trading volume over the past month, of 4.2 million shares. Especially high volume was seen for the $55 strike call option expiring January 19, 2018 , with 5,625 contracts trading so far today, representing approximately 562,500 underlying shares of AAL. Below is a chart showing AAL's trailing twelve month trading history, with the $55 strike highlighted in orange: For the various different available expirations for VOYA options , BTU options , or AAL options , visit StockOptionsChannel.com.
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Below is a chart showing BTU's trailing twelve month trading history, with the $39 strike highlighted in orange: And American Airlines Group Inc (Symbol: AAL) saw options trading volume of 23,012 contracts, representing approximately 2.3 million underlying shares or approximately 54.4% of AAL's average daily trading volume over the past month, of 4.2 million shares. Especially high volume was seen for the $55 strike call option expiring January 19, 2018 , with 5,625 contracts trading so far today, representing approximately 562,500 underlying shares of AAL. Below is a chart showing AAL's trailing twelve month trading history, with the $55 strike highlighted in orange: For the various different available expirations for VOYA options , BTU options , or AAL options , visit StockOptionsChannel.com.
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Below is a chart showing BTU's trailing twelve month trading history, with the $39 strike highlighted in orange: And American Airlines Group Inc (Symbol: AAL) saw options trading volume of 23,012 contracts, representing approximately 2.3 million underlying shares or approximately 54.4% of AAL's average daily trading volume over the past month, of 4.2 million shares. Especially high volume was seen for the $55 strike call option expiring January 19, 2018 , with 5,625 contracts trading so far today, representing approximately 562,500 underlying shares of AAL. Below is a chart showing AAL's trailing twelve month trading history, with the $55 strike highlighted in orange: For the various different available expirations for VOYA options , BTU options , or AAL options , visit StockOptionsChannel.com.
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7233.0
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2017-12-21 00:00:00 UTC
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5 Transportation Stocks That Escaped 2017 Sector Shortfall
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AAL
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https://www.nasdaq.com/articles/5-transportation-stocks-that-escaped-2017-sector-shortfall-2017-12-21
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nan
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It is a well-documented fact that the widely-diversified transportation sector, which includes airline companies, railroads, truckers and shippers to name a few, has had a turbulent time in 2017 due to multiple headwinds. Issues ranging from customer dissatisfaction, high fuel costs, driver shortages, technological glitches and service disruptions due to hurricanes have let sector participants down at various times of the year.
Lets have a deeper look into the major headwinds that have hampered this sector.
Probably, the most infamous incident to have plagued the sector in 2017 was the David Dao incident at United Airlines, the wholly owned subsidiary of United Continental UAL , on Apr 9. The passenger dragging episode drew flak from across the globe, resulting in multiple apologies from the company. Apart from United Airlines, customer dissatisfaction issues have also hurt other airline operators like Spirit Airlines SAVE .
The rise in fuel prices also do not bode well for transportation stocks as expenses related to the commodity are one of the largest input costs for any sector participant. In fact, oil prices have increased more than 37% in the last three months, hitting a more than two-year high of around $59 recently.
Additionally, the recent hurricanes disrupted operations of major sector participants. Consequently, airline operators like United Continental had to cancel multiple flights causing significant loss of revenues.
Hurricanes also hurt operations of major railroads like Union Pacific Corp. UNP and Norfolk Southern Corp. NSC by damaging important rail lines. Freight costs skyrocketed following the natural disasters. Railroads have also been negatively impacted this year by weakness in the automotive sector due to sluggish vehicle production in the United States.
In 2017, technological glitches have hurt sector participants as well. Operations at FedEx Corp.'s FDX subsidiary, TNT Express, were crippled by a cyberattack in June. The attack caused large-scale service delays.
Due the above-mentioned headwinds, the Zacks transportation sector is currently placed at the bottom among the 16 Zacks Classified sectors.
S&P 500 Going from Strength to Strength
With the domestic economy on a solid footing, it is of little surprise that U.S. stock markets are hitting all-time highs on a fairly regular basis. The S&P 500 also maintained its upward journey for 13 straight months through November. The benchmark index, in fact, hasn't seen a drop of at least 3% since Nov 7, 2016, the longest stretch on record. The index had rallied more than 19% so far this year and is on track to record its best year since 2013.
In fact, strong economic growth has been responsible for this upsurge in the S&P 500 Index. Bullish domestic data released recently are indicative of the healthy position of the U.S. economy.
Per the Commerce Department's second estimate, the U.S. economy expanded at a 3.3% pace in the third quarter. This represents an improvement from the annualized growth rate of 3.1% in the April to June period and the strongest performance since the third quarter of 2014. Meanwhile, President Trump's proposals to overhaul the tax law and make it business friendly, have added to the already buoyant scenario.
Transports Lag the S&P 500 Index
While the S&P 500 equity index has been on an uptrend, it has been a turbulent 2017 for the transportation stocks as enumerated above. Given this contrasting scenario, it is of little wonder that the sector has lagged the coveted S&P 500 Index.
The recent optimism surrounding the tax bill , which on becoming a law is expected to aid transports significantly, is primarily responsible for the sector giving positive returns to investors this year. Despite this, it has not been a great year for the sector participants due to the headwinds mentioned above.
The Zacks transportation sector rallied 10.9% year to date compared with the broader S&P 500's gain of 20.3%.
Our next choice is Union Pacific Corporation . This Zacks Rank #3 (Hold) railroad operator is based in Omaha, NE. As the largest railroad in North America, Union Pacific connects the Pacific and Gulf Coast ports with the Midwest and eastern United States gateways.
The stock has seen the Zacks Consensus Estimate for current-quarter and current-year earnings being revised 2% and 0.7% upward, respectively, over the last 60 days. Additionally, the stock has returned 29.9% year to date. The company has a market capitalization of $101.68 billion.
Moreover, railroads including Union Pacific are seeing good times under President Trump due to his pro-coal stance. Trump is aiming to revive the coal industry by relaxing regulations which were hurting its prospects. As fortunes of railroads are tied to coal, any positive development pertaining to the commodity is a boost for railroad operators.
Additionally, railroads invest significantly for capital expenditure as the industry is capital-intensive in nature. For example, Union Pacific has announced a $3.1 billion capital plan this year, which is in line with its efforts to promote safety and enhance productivity.
In the current scenario, capital expenditures cannot be tax-deducted in the year they are incurred. However, companies will be able to deduct their capital expenditures from taxable income immediately as per the provisions of the tax reform bill. Naturally, this aspect hugely favors railroads and if it materializes companies in the space would be huge gainers.
Our next choice is also a railroad operator - Norfolk Southern Corporation . This Zacks Rank #3 company is based in Norfolk, VA. The stock has seen the Zacks Consensus Estimate for current-quarter and current-year earnings being revised 2% and 1.7% upward, respectively, over the last 60 days. Additionally, the stock has returned 34% year to date. The company has a market capitalization of $40.31 billion.
We are impressed by Norfolk Southern's focus on rewarding shareholders through share repurchases and dividends. The company's cost-cutting efforts to drive the bottom-line are also encouraging. The company expects earnings per share to grow in double digits (compound annual growth rate) by 2020.
Airline behemoth Delta Air LinesDAL has also outperformed the transportation sector this year despite the headwinds. This Zacks Rank #3 company, based in Atlanta, GA, is a leading provider of scheduled air transportation for passengers and cargo throughout the United States and around the world.
The company has a decent record with respect to earnings per share, having beaten the Zacks Consensus Estimate in two of the last four quarters. The average beat is 1.6%. Moreover, the stock has an impressive dividend paying history.
The stock has returned 14.3% year to date. Delta has a market capitalization of $39.39 billion. Moreover, the tax reform bill, on becoming a law is expected to aid airline stocks just like railroads.
Our list of sector outperformers in 2017 is rounded off by American Airlines GroupAAL . The company, headquartered in Fort Worth, TX, operates more than 6,700 daily flights to over 330 destinations in more than 50 nations across the globe. This Zacks Rank #3 company has an impressive record with respect to earnings per share, having beaten the Zacks Consensus Estimate in three of the last four quarters. The average beat is 3%.
Additionally, the stock has returned 11.2% year to date, outperforming the sector despite the difficult year. The company has a market capitalization of $24.03 billion.
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Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Union Pacific Corporation (UNP): Free Stock Analysis Report
Norfolk Souther Corporation (NSC): Free Stock Analysis Report
FedEx Corporation (FDX): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Our list of sector outperformers in 2017 is rounded off by American Airlines GroupAAL . Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report FedEx Corporation (FDX): Free Stock Analysis Report To read this article on Zacks.com click here. Issues ranging from customer dissatisfaction, high fuel costs, driver shortages, technological glitches and service disruptions due to hurricanes have let sector participants down at various times of the year.
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Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report FedEx Corporation (FDX): Free Stock Analysis Report To read this article on Zacks.com click here. Our list of sector outperformers in 2017 is rounded off by American Airlines GroupAAL . Issues ranging from customer dissatisfaction, high fuel costs, driver shortages, technological glitches and service disruptions due to hurricanes have let sector participants down at various times of the year.
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Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report FedEx Corporation (FDX): Free Stock Analysis Report To read this article on Zacks.com click here. Our list of sector outperformers in 2017 is rounded off by American Airlines GroupAAL . Due the above-mentioned headwinds, the Zacks transportation sector is currently placed at the bottom among the 16 Zacks Classified sectors.
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Our list of sector outperformers in 2017 is rounded off by American Airlines GroupAAL . Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report FedEx Corporation (FDX): Free Stock Analysis Report To read this article on Zacks.com click here. Additionally, railroads invest significantly for capital expenditure as the industry is capital-intensive in nature.
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7234.0
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2017-12-20 00:00:00 UTC
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American Airlines: The Year In Review
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AAL
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https://www.nasdaq.com/articles/american-airlines-year-review-2017-12-20
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nan
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nan
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The airline industry in the U.S. saw top and bottom lines jump throughout the first half of the year, while hurting throughout the second half. This is true in the case of American Airlines ( AAL ) as well. The company beat both, the earnings and consensus estimates, in the first two quarters of the year. That said, like many of its competitors, the airline suffered heavily towards the second half of the year on adverse weather conditions that forced the carrier to cancel over 8,000 flights in Q3 alone.
Additionally, unit revenues came in positive throughout every quarter in 2017, making American the only airline among its peers to achieve such a long streak.
Key Highlights From The Year :
The stock price fell severely after the latestearnings callas American announced its decision to more than double its rate of seat supply in 2018. At a time when most carriers are suffering the effects of adverse pricing conditions, American pushed a step further in its attempt to retain market share. Analysts across the board worried that this could lead to an oversupply situation that forces key players to further discount (already low) ticket prices in order to compete efficiently. That said, American Airlines CFO, Derek Kerr, has assured investors that he plans to "take a measured approach to matching our planned capacity levels." We can learn more about this in January, when the airline hopes to lay out its final plan for 2018.
Like United, American managed to find itself in the middle of some bad press in the year. In Q3, the airline was issued a warning by the NAACP. The organization issued a national warning, in which it highlighted disturbing incidents reported by African-American passengers traveling with the airline. According to the report, African-American passengers reported many incidents where the airline had subjected them to disrespectful, discriminatory, or unsafe conditions. Such incidents, and its recognition by the NAACP, hurt the company's reputation, and is consequently expected to hurt the top line going forward. The Q4earnings callwill shed more light on this matter.
In the year, the company continued its aggressive fleet modernization program - slated to be the most aggressive in aviation history. In the Q2, American undertook the delivery of 20 new aircraft in an attempt to replace older aircraft in the fleet. Additionally, in 2017, the airline greatly expanded its Basic Economy and Premium Economy products, thereby allowing more choice to its customers. Further, the company introduced new technologies, like proactive bag notification and auto re-accommodation tools, that made it even easier for customers to fly with the airline.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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This is true in the case of American Airlines ( AAL ) as well. Key Highlights From The Year : The stock price fell severely after the latestearnings callas American announced its decision to more than double its rate of seat supply in 2018. Analysts across the board worried that this could lead to an oversupply situation that forces key players to further discount (already low) ticket prices in order to compete efficiently.
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This is true in the case of American Airlines ( AAL ) as well. According to the report, African-American passengers reported many incidents where the airline had subjected them to disrespectful, discriminatory, or unsafe conditions. Mid & Small Cap | European Large & Mid Cap More Trefis Research The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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This is true in the case of American Airlines ( AAL ) as well. The airline industry in the U.S. saw top and bottom lines jump throughout the first half of the year, while hurting throughout the second half. That said, like many of its competitors, the airline suffered heavily towards the second half of the year on adverse weather conditions that forced the carrier to cancel over 8,000 flights in Q3 alone.
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This is true in the case of American Airlines ( AAL ) as well. The airline industry in the U.S. saw top and bottom lines jump throughout the first half of the year, while hurting throughout the second half. That said, like many of its competitors, the airline suffered heavily towards the second half of the year on adverse weather conditions that forced the carrier to cancel over 8,000 flights in Q3 alone.
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7235.0
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2017-12-20 00:00:00 UTC
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First Week of AAL August 2018 Options Trading
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AAL
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https://www.nasdaq.com/articles/first-week-aal-august-2018-options-trading-2017-12-20
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nan
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Investors in American Airlines Group Inc (Symbol: AAL) saw new options begin trading this week, for the August 2018 expiration. One of the key data points that goes into the price an option buyer is willing to pay, is the time value, so with 240 days until expiration the newly trading contracts represent a possible opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. At Stock Options Channel , our YieldBoost formula has looked up and down the AAL options chain for the new August 2018 contracts and identified one put and one call contract of particular interest.
The put contract at the $50.00 strike price has a current bid of $4.10. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $50.00, but will also collect the premium, putting the cost basis of the shares at $45.90 (before broker commissions). To an investor already interested in purchasing shares of AAL, that could represent an attractive alternative to paying $51.42/share today.
Because the $50.00 strike represents an approximate 3% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 60%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract . Should the contract expire worthless, the premium would represent a 8.20% return on the cash commitment, or 12.47% annualized - at Stock Options Channel we call this the YieldBoost .
Below is a chart showing the trailing twelve month trading history for American Airlines Group Inc, and highlighting in green where the $50.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $55.00 strike price has a current bid of $3.60. If an investor was to purchase shares of AAL stock at the current price level of $51.42/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $55.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 13.96% if the stock gets called away at the August 2018 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if AAL shares really soar, which is why looking at the trailing twelve month trading history for American Airlines Group Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAL's trailing twelve month trading history, with the $55.00 strike highlighted in red:
Considering the fact that the $55.00 strike represents an approximate 7% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 56%. On our website under the contract detail page for this contract , Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 7.00% boost of extra return to the investor, or 10.65% annualized, which we refer to as the YieldBoost .
The implied volatility in the put contract example, as well as the call contract example, are both approximately 30%. Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 253 trading day closing values as well as today's price of $51.42) to be 29%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the Nasdaq 100 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Of course, a lot of upside could potentially be left on the table if AAL shares really soar, which is why looking at the trailing twelve month trading history for American Airlines Group Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAL's trailing twelve month trading history, with the $55.00 strike highlighted in red: Considering the fact that the $55.00 strike represents an approximate 7% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in American Airlines Group Inc (Symbol: AAL) saw new options begin trading this week, for the August 2018 expiration.
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Below is a chart showing AAL's trailing twelve month trading history, with the $55.00 strike highlighted in red: Considering the fact that the $55.00 strike represents an approximate 7% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in American Airlines Group Inc (Symbol: AAL) saw new options begin trading this week, for the August 2018 expiration. At Stock Options Channel , our YieldBoost formula has looked up and down the AAL options chain for the new August 2018 contracts and identified one put and one call contract of particular interest.
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Below is a chart showing AAL's trailing twelve month trading history, with the $55.00 strike highlighted in red: Considering the fact that the $55.00 strike represents an approximate 7% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in American Airlines Group Inc (Symbol: AAL) saw new options begin trading this week, for the August 2018 expiration. At Stock Options Channel , our YieldBoost formula has looked up and down the AAL options chain for the new August 2018 contracts and identified one put and one call contract of particular interest.
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At Stock Options Channel , our YieldBoost formula has looked up and down the AAL options chain for the new August 2018 contracts and identified one put and one call contract of particular interest. Below is a chart showing AAL's trailing twelve month trading history, with the $55.00 strike highlighted in red: Considering the fact that the $55.00 strike represents an approximate 7% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in American Airlines Group Inc (Symbol: AAL) saw new options begin trading this week, for the August 2018 expiration.
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7236.0
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2017-12-20 00:00:00 UTC
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Stocks With Rising Relative Strength: American Airlines
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AAL
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https://www.nasdaq.com/articles/stocks-rising-relative-strength-american-airlines-2017-12-20
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nan
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American Airlines ( AAL ) saw a positive improvement to its Relative Strength ( RS ) Rating on Wednesday, rising from 70 to 74.
[ibd-display-video id=2102289 width=50 float=left autostart=true] This proprietary rating measures technical performance by showing how a stock's price movement over the last 52 weeks compares to that of the other stocks in our database.
Decades of market research reveals that the top-performing stocks often have an 80 or better RS Rating as they begin their biggest climbs. See if American Airlines can continue to rebound and hit that benchmark.
See How IBD Helps You Make More Money In Stocks
American Airlines is trying to complete a cup with handle with a 53.84 entry . See if it can break out in heavy trading.
The company showed -19% earnings growth in its most recent report. Sales increased 3%.
American Airlines earns the No. 10 rank among its peers in the Transportation-Airline industry group. China South Airline ( ZNH ), SkyWest ( SKYW ) and Copa ( CPA ) are among the top 5 highly rated stocks within the group.
RELATED:
Airline Industry News And Stocks To Watch
Stocks With Rising Relative Strength Ratings
Why Should You Use IBD's Relative Strength Rating?
How Relative Strength Line Can Help You Judge A Stock
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines ( AAL ) saw a positive improvement to its Relative Strength ( RS ) Rating on Wednesday, rising from 70 to 74. See How IBD Helps You Make More Money In Stocks American Airlines is trying to complete a cup with handle with a 53.84 entry . China South Airline ( ZNH ), SkyWest ( SKYW ) and Copa ( CPA ) are among the top 5 highly rated stocks within the group.
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American Airlines ( AAL ) saw a positive improvement to its Relative Strength ( RS ) Rating on Wednesday, rising from 70 to 74. Airline Industry News And Stocks To Watch Stocks With Rising Relative Strength Ratings Why Should You Use IBD's Relative Strength Rating? How Relative Strength Line Can Help You Judge A Stock The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines ( AAL ) saw a positive improvement to its Relative Strength ( RS ) Rating on Wednesday, rising from 70 to 74. Airline Industry News And Stocks To Watch Stocks With Rising Relative Strength Ratings Why Should You Use IBD's Relative Strength Rating? How Relative Strength Line Can Help You Judge A Stock The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines ( AAL ) saw a positive improvement to its Relative Strength ( RS ) Rating on Wednesday, rising from 70 to 74. American Airlines earns the No. Airline Industry News And Stocks To Watch Stocks With Rising Relative Strength Ratings Why Should You Use IBD's Relative Strength Rating?
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7237.0
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2017-12-19 00:00:00 UTC
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Will 2018 Bring Better Tidings for Spirit Airlines Stock?
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AAL
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https://www.nasdaq.com/articles/will-2018-bring-better-tidings-for-spirit-airlines-stock-2017-12-19
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nan
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nan
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We are at the tail end of 2017 and it can be safely said that low-cost carrier Spirit AirlinesSAVE has not had the best of times due to multiple headwinds. The stock has shed 22.4% of its value so far this year, where as its industry has gained 13.2%.
Why the Underperformance in 2017
In May, Spirit Airlines had to cancel multiple flights owing to a dispute with its pilots, which resulted in customer dissatisfaction. Consequently, the company had to incur significant costs pertaining to passenger re-accommodation and other factors. The increased costs hurt its bottom line appreciably.
Apart from Spirit Airlines, the likes of United Continental Holdings UAL , Delta Air Lines DAL and American Airlines Group AAL have also faced customer-related issues this year.
Additionally, Spirit Airlines continues to suffer owing to capacity overexpansion. Evidently, load factor (percentage of seats filled by passengers) has declined 170 basis points to 83.4% in the first 11 months of the year, due to traffic growth (13.9%) being outpaced by capacity expansion (16.2%). Pricing pressures have also hurt its performance.
Moreover, the carrier's operations were negatively impacted by the back-to-back hurricanes. As a result, Spirit Airlines had to cancel more than 1,650 flights in the third quarter of 2017. In fact, the dispute with its pilots coupled with the affects of hurricanes caused this low-cost carrier' top line to shrink to the tune of approximately $40 million in the same period. The rising fuel costs have hurt its bottom line as well.
In the final quarter of 2017, high costs are expected to hurt the bottom line. The company's guidance for fourth-quarter total revenue per available seat miles (TRASM: a key measure of unit revenues) is also disappointing. The company expects TRASM for the fourth quarter to decline in the range of 4-6%.
Will the Stock Recover in 2018?
Spirit Airlines has been making efforts to make a turnaround going forward. In 2018, this Zacks Rank #3 (Hold) company expects adjusted unit costs (non-fuel) to decline in the band of 3-5% owing to its prudent cost management initiatives. You can see t he complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Furthermore, the carrier's efforts to modernize its fleet raise optimism. The fleet strength is expected to be 112 by Dec 31 and increase to 122 by 2018-end. The company's efforts to reward stockholders through share buybacks are impressive as well.
In October 2017, the company's board also authorized a share repurchase program worth up to $100 million in aggregate value. The date of expiration of the authorization is Oct 25, 2018.
In addition, Spirit Airlines announced a change at its helm in a bid to improve efficiencies. To this end, it appointed Ted Christie - the company's current executive vice president and chief financial officer - as the new chief executive officer (CEO). He will succeed Bob Fornaro with effect from Jan 1, 2019. However, before assuming that role, Christie will serve as the president and join the company's board of directors from Jan 1, 2018 onward. He will look into the finance, revenues, operations, IT and human resource functions of the organization.
Therefore, it can be safely said that Spirit Airlines is leaving no stone unturned to revive its fortunes. However, only time will tell the extent to which the company is successful in its efforts.
Zacks Editor-in-Chief Goes ""All In"" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Download it free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apart from Spirit Airlines, the likes of United Continental Holdings UAL , Delta Air Lines DAL and American Airlines Group AAL have also faced customer-related issues this year. Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Why the Underperformance in 2017 In May, Spirit Airlines had to cancel multiple flights owing to a dispute with its pilots, which resulted in customer dissatisfaction.
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Apart from Spirit Airlines, the likes of United Continental Holdings UAL , Delta Air Lines DAL and American Airlines Group AAL have also faced customer-related issues this year. Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. In 2018, this Zacks Rank #3 (Hold) company expects adjusted unit costs (non-fuel) to decline in the band of 3-5% owing to its prudent cost management initiatives.
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Apart from Spirit Airlines, the likes of United Continental Holdings UAL , Delta Air Lines DAL and American Airlines Group AAL have also faced customer-related issues this year. Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. In 2018, this Zacks Rank #3 (Hold) company expects adjusted unit costs (non-fuel) to decline in the band of 3-5% owing to its prudent cost management initiatives.
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Apart from Spirit Airlines, the likes of United Continental Holdings UAL , Delta Air Lines DAL and American Airlines Group AAL have also faced customer-related issues this year. Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. As a result, Spirit Airlines had to cancel more than 1,650 flights in the third quarter of 2017.
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7238.0
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2017-12-18 00:00:00 UTC
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Will High Costs be a Dampener to FedEx (FDX) in Q2 Earnings?
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AAL
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https://www.nasdaq.com/articles/will-high-costs-be-a-dampener-to-fedex-fdx-in-q2-earnings-2017-12-18
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FedEx CorporationFDX is set to release second-quarter fiscal 2018 results after the closing bell on Dec 19.
Last quarter, the company posted a negative earnings surprise of 20.8%. Earnings (excluding 32 cents from non-recurring items) of $2.51 per share significantly fell short of the Zacks Consensus Estimate of $3.17. Furthermore, the bottom line declined 13.5% on a year-over-year basis due to higher costs.
Quarterly revenues increased 4.3% year over year to $15,297 million, lagging the Zacks Consensus Estimate of $15,368.7 million. The top line was hurt primarily due to the TNT Express cyberattack.
Things do not look up for the FedEx stock this quarter either. Let's look into the factors responsible for such a bleak outlook.
Factors Likely at Play
FedEx's operations have been hurt by the TNT Express cyberattack in June. The effects of the attack are expected to hamper results in the second quarter too. Additionally, rising costs might affect the company's bottom line growth. Moreover, expenses related to the integration process of TNT Express and the increased investments at its Ground unit are also likely to negatively impact the bottom line in the quarter to be reported.
The company's efforts to meet the surging demand in the peak holiday season are increasing delivery costs with potential to further hit the quarterly earnings performance.
The company's high-debt levels further add to its woes.
However, strong growth of e-commerce is anticipated to boost the top line in the quarter. Notably, the Zacks Consensus Estimate for revenues at the FedEx Express (including TNT Express) division stands at $8,911 million, higher than $6,743 million a year ago. For Ground and Freight revenues, the Zacks Consensus Estimate is pegged at $4,793 million and $1,685 million, respectively, greater than the year-ago figures of $4,419 and $1,597 million, respectively.
Earnings Whispers
Our proven model does not conclusively show that FedEx is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as elaborated below.
Zacks ESP : FedEx has an Earnings ESP of -0.59%. This is because the Most Accurate estimate is pegged at $2.85 per share, higher than the Zacks Consensus Estimate of $2.87. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Zacks Rank : FedEx has a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
FedEx Corporation Price and EPS Surprise
FedEx Corporation Price and EPS Surprise | FedEx Corporation Quote
Stocks to Consider
Investors interested in the broader Transportation sector may consider the following stocks with the right combination of elements to deliver an earnings beat in their upcoming releases:
American Airlines Group, Inc. AAL has an Earnings ESP of +1.41% and a Zacks Rank #3.
Allegiant Travel Company ALGT has an Earnings ESP of +5.07% and is a #3 Ranked player. You can see the complete list of today's Zacks #1 Rank stocks here .
CSX Corporation CSX has an Earnings ESP of +1.24% and a Zacks Rank of 3.
Wall Street's Next Amazon
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Allegiant Travel Company (ALGT): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
CSX Corporation (CSX): Free Stock Analysis Report
FedEx Corporation (FDX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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FedEx Corporation Price and EPS Surprise FedEx Corporation Price and EPS Surprise | FedEx Corporation Quote Stocks to Consider Investors interested in the broader Transportation sector may consider the following stocks with the right combination of elements to deliver an earnings beat in their upcoming releases: American Airlines Group, Inc. AAL has an Earnings ESP of +1.41% and a Zacks Rank #3. Click to get this free report Allegiant Travel Company (ALGT): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis Report FedEx Corporation (FDX): Free Stock Analysis Report To read this article on Zacks.com click here. Moreover, expenses related to the integration process of TNT Express and the increased investments at its Ground unit are also likely to negatively impact the bottom line in the quarter to be reported.
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FedEx Corporation Price and EPS Surprise FedEx Corporation Price and EPS Surprise | FedEx Corporation Quote Stocks to Consider Investors interested in the broader Transportation sector may consider the following stocks with the right combination of elements to deliver an earnings beat in their upcoming releases: American Airlines Group, Inc. AAL has an Earnings ESP of +1.41% and a Zacks Rank #3. Click to get this free report Allegiant Travel Company (ALGT): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis Report FedEx Corporation (FDX): Free Stock Analysis Report To read this article on Zacks.com click here. Notably, the Zacks Consensus Estimate for revenues at the FedEx Express (including TNT Express) division stands at $8,911 million, higher than $6,743 million a year ago.
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FedEx Corporation Price and EPS Surprise FedEx Corporation Price and EPS Surprise | FedEx Corporation Quote Stocks to Consider Investors interested in the broader Transportation sector may consider the following stocks with the right combination of elements to deliver an earnings beat in their upcoming releases: American Airlines Group, Inc. AAL has an Earnings ESP of +1.41% and a Zacks Rank #3. Click to get this free report Allegiant Travel Company (ALGT): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis Report FedEx Corporation (FDX): Free Stock Analysis Report To read this article on Zacks.com click here. Notably, the Zacks Consensus Estimate for revenues at the FedEx Express (including TNT Express) division stands at $8,911 million, higher than $6,743 million a year ago.
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FedEx Corporation Price and EPS Surprise FedEx Corporation Price and EPS Surprise | FedEx Corporation Quote Stocks to Consider Investors interested in the broader Transportation sector may consider the following stocks with the right combination of elements to deliver an earnings beat in their upcoming releases: American Airlines Group, Inc. AAL has an Earnings ESP of +1.41% and a Zacks Rank #3. Click to get this free report Allegiant Travel Company (ALGT): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis Report FedEx Corporation (FDX): Free Stock Analysis Report To read this article on Zacks.com click here. Last quarter, the company posted a negative earnings surprise of 20.8%.
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7239.0
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2017-12-15 00:00:00 UTC
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The Zacks Analyst Blog Highlights: Microsoft, Johnson & Johnson, ExxonMobil, American Airlines and Honda
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AAL
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https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-microsoft-johnson-johnson-exxonmobil-american-airlines
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For Immediate Release
Chicago, IL - December 15, 2017 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include MicrosoftMSFT , Johnson & JohnsonJNJ , ExxonMobilXOM , American AirlinesAAL and HondaHMC .
Here are highlights from Thursday's Analyst Blog:
Top Analyst Reports for Microsoft, J&J and ExxonMobil
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Microsoft, Johnson & Johnson and ExxonMobil. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today's research reports here >>>
Microsoft' s shares have outperformed the Zacks Technology sector in the year to date period (up +37.3% versus +27%) The Zacks analyst expects rapid adoption of Azure and Office 365 to remain the key catalysts for Microsoft in the near future. This, along with lower spending will drive operating margin expansion in fiscal 2018. Further, collaborations with the likes of Amazon, Red Hat, Symantec, Cray and PAREXEL are positive for the company's growth prospects.
Microsoft's strategic initiatives to enter the augmented reality and virtual reality market with the acquisition of Altspace VR and launch of mixed reality headsets will be other positives. Additionally, its recent blockchain deals with Hapoalim and Accenture and its Coco framework are tailwinds. However, intense competition from Sony's PS4 is a major headwind. Additionally, declining PC shipments doesn't bode well for the company.
(You can read the full research report on Microsoft here >>> ).
Shares of Johnson & Johnson have gained +24.1% in the year-to-date period, outperforming the +17.7% gain of the Zacks Large Cap Pharmaceuticals industry. Sales in J&J's domestic Pharma segment decelerated in the first half of 2017 as a number of key growth drivers like Remicade and Concerta are facing competition. However, sales growth accelerated in Q3 and the positive trend is expected to continue in Q4.
The Zacks analyst thinks new products in all segments, label expansion of drugs like Imbruvica and Darzalex and contribution from recent acquisitions -- mainly Actelion -- can support top-line growth. Meanwhile, share buybacks and the restructuring initiative should provide bottom-line support. J&J is also making rapid progress with its pipeline and line extensions.
However, headwinds like generics, pricing pressure and softglobal marketconditions remain. Sluggish growth in the Consumer segment is also a concern.
(You can read the full research report on Johnson & Johnson here >>> ).
ExxonMobil 's shares have underperformed the Zacks Integrated Oil industry (-7.9% vs. +5.2%) as well as peer Chevron (+1.9%) in the year to date period. However, ExxonMobil has a leading position in the energy industry owing to the size and diversity of its asset base, both in terms of business mix and geographical footprint. With a stable cash position, the company's balance sheet is one of the best in the industry, reflecting declining debt load over the first nine months of 2017.
The Zacks analyst likes ExxonMobil's plans to combine its refining & marketing businesses as this will allow the company to take better decisions and boost performance. ExxonMobil will generate more cashflow from downstream activities, also helping it counter the volatility in its upstream business. However, dependence on costly offshore drilling might dent ExxonMobil's cashflow.
(You can read the full research report on ExxonMobil here >>> ).
Other noteworthy reports we are featuring today include American Airlines and Honda.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
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Media Contact
Zacks Investment Research
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss . This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Johnson & Johnson (JNJ): Free Stock Analysis Report
Honda Motor Company, Ltd. (HMC): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Exxon Mobil Corporation (XOM): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Stocks recently featured in the blog include MicrosoftMSFT , Johnson & JohnsonJNJ , ExxonMobilXOM , American AirlinesAAL and HondaHMC . Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Johnson & Johnson (JNJ): Free Stock Analysis Report Honda Motor Company, Ltd. (HMC): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report To read this article on Zacks.com click here. Sales in J&J's domestic Pharma segment decelerated in the first half of 2017 as a number of key growth drivers like Remicade and Concerta are facing competition.
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Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Johnson & Johnson (JNJ): Free Stock Analysis Report Honda Motor Company, Ltd. (HMC): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks recently featured in the blog include MicrosoftMSFT , Johnson & JohnsonJNJ , ExxonMobilXOM , American AirlinesAAL and HondaHMC . Today's Research Daily features new research reports on 16 major stocks, including Microsoft, Johnson & Johnson and ExxonMobil.
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Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Johnson & Johnson (JNJ): Free Stock Analysis Report Honda Motor Company, Ltd. (HMC): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks recently featured in the blog include MicrosoftMSFT , Johnson & JohnsonJNJ , ExxonMobilXOM , American AirlinesAAL and HondaHMC . Today's Research Daily features new research reports on 16 major stocks, including Microsoft, Johnson & Johnson and ExxonMobil.
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Stocks recently featured in the blog include MicrosoftMSFT , Johnson & JohnsonJNJ , ExxonMobilXOM , American AirlinesAAL and HondaHMC . Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Johnson & Johnson (JNJ): Free Stock Analysis Report Honda Motor Company, Ltd. (HMC): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report To read this article on Zacks.com click here. Today's Research Daily features new research reports on 16 major stocks, including Microsoft, Johnson & Johnson and ExxonMobil.
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7240.0
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2017-12-15 00:00:00 UTC
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Delta Air Lines, Inc. Follows Rivals and Raises Its Unit Revenue Guidance
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AAL
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https://www.nasdaq.com/articles/delta-air-lines-inc-follows-rivals-and-raises-its-unit-revenue-guidance-2017-12-15
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A bizarre peak-season price war led to somewhat disappointing earnings results for the four largest U.S. airlines last quarter. However, the fourth quarter is shaping up to be much better.
Earlier this month, Southwest Airlines (NYSE: LUV) and United Continental (NYSE: UAL) boosted their Q4 unit revenue forecasts . Last week -- in conjunction with its investor day -- Delta Air Lines (NYSE: DAL) followed suit. This bodes well for airline investors heading into 2018.
Guidance rising across the industry
In the past two weeks, several airlines' November traffic updates have been accompanied by upward revisions to their unit revenue forecasts. Southwest Airlines now expects revenue per available seat mile (RASM) to rise 1%-2% this quarter, whereas its original guidance called for RASM to be "up slightly," to 1.5%. Meanwhile, United Continental increased its guidance range for passenger revenue per available seat mile (PRASM) by 1 percentage point, although it still expects PRASM to decline 0%-2% this quarter.
Delta Air Lines didn't update its unit revenue guidance when it reported its November traffic results. However, it was just waiting for its annual investor day. On Thursday, Delta revealed that it expects PRASM to rise by about 4% in the fourth quarter.
This would be at the high end of the 2%-4% guidance range that management provided in mid-October. RASM growth, which includes contributions from cargo and "other" revenue, will probably be at least 4.5%, as revenue from those sources is rising at a double-digit rate.
Following the Delta guidance revision, American Airlines (NASDAQ: AAL) is the only one of the top four carriers that hasn't altered its Q4 unit revenue outlook. That's not surprising, though. American Airlines has stopped publishing monthly traffic reports and guidance updates entirely, as management wants investors to focus on long-term trends.
Delta is leading the way
Delta's current unit revenue trend is significantly better than those of Southwest and United. Among the top four U.S. airlines, only American is in the same league. American Airlines' guidance, issued in late October, called for Q4 RASM growth of 2.5%-4.5%. Given that the industry unit revenue environment seems to have improved significantly since then, it will probably reach the high end of that range.
Delta Air Lines President Glen Hauenstein noted during the investor day presentation that Delta is seeing strong unit revenue trends throughout its route network. In fact, this quarter, unit revenue is set to increase in every geographical region -- domestic, Atlantic, Pacific, and Latin America -- for the first time in five years.
Hauenstein expects that momentum to continue in 2018, with PRASM up year over year in each quarter. For the full year, Delta's guidance implies PRASM growth of 2%-3%.
It's about time
Investors should be very pleased about the rising unit revenue forecasts at Delta, Southwest, and United -- not to mention several of their smaller competitors. This unit revenue momentum suggests that airlines are reacting to the recent uptick in fuel costs by reining in discounting.
Higher fuel costs could be a 2-3 percentage point margin headwind for many airlines in 2018. To offset that cost increase -- as well as other inflationary pressures -- it's absolutely critical for airlines to generate steadier unit revenue gains in 2018 than what they've produced this year.
There's still plenty of cause for worry among United Continental shareholders. Even after its guidance update, the carrier still expects RASM to decline this quarter. By contrast, the outlook for Delta Air Lines is quite favorable. Its growing unit revenue momentum across the globe puts the company in good position to return to a double-digit earnings-per-share growth rate in 2018.
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Adam Levine-Weinberg owns shares of Delta Air Lines. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Following the Delta guidance revision, American Airlines (NASDAQ: AAL) is the only one of the top four carriers that hasn't altered its Q4 unit revenue outlook. Guidance rising across the industry In the past two weeks, several airlines' November traffic updates have been accompanied by upward revisions to their unit revenue forecasts. In fact, this quarter, unit revenue is set to increase in every geographical region -- domestic, Atlantic, Pacific, and Latin America -- for the first time in five years.
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Following the Delta guidance revision, American Airlines (NASDAQ: AAL) is the only one of the top four carriers that hasn't altered its Q4 unit revenue outlook. Southwest Airlines now expects revenue per available seat mile (RASM) to rise 1%-2% this quarter, whereas its original guidance called for RASM to be "up slightly," to 1.5%. Meanwhile, United Continental increased its guidance range for passenger revenue per available seat mile (PRASM) by 1 percentage point, although it still expects PRASM to decline 0%-2% this quarter.
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Following the Delta guidance revision, American Airlines (NASDAQ: AAL) is the only one of the top four carriers that hasn't altered its Q4 unit revenue outlook. Delta is leading the way Delta's current unit revenue trend is significantly better than those of Southwest and United. Delta Air Lines President Glen Hauenstein noted during the investor day presentation that Delta is seeing strong unit revenue trends throughout its route network.
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Following the Delta guidance revision, American Airlines (NASDAQ: AAL) is the only one of the top four carriers that hasn't altered its Q4 unit revenue outlook. Meanwhile, United Continental increased its guidance range for passenger revenue per available seat mile (PRASM) by 1 percentage point, although it still expects PRASM to decline 0%-2% this quarter. Delta Air Lines didn't update its unit revenue guidance when it reported its November traffic results.
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7241.0
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2017-12-14 00:00:00 UTC
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Delta Jumps Into Buy Zone On Bullish Revenue Outlook
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AAL
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https://www.nasdaq.com/articles/delta-jumps-buy-zone-bullish-revenue-outlook-2017-12-14
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Shares of Delta Air Lines ( DAL ) burst higher Thursday, as the carrier kicked off its Investor Day with a solid 2018 forecast and a fourth-quarter outlook that included more bullish expectations for unit revenue but weaker margins.
[ibd-display-video id=3023531 width=50 float=left autostart=true] Delta on Thursday also officially announced that it would buy 100 A321neos from Airbus ( EADSY ), a snub to Boeing ( BA ), with whom relations have cooled .
Shares of Delta jumped 3% to 55.25 in the stock market today , once again clearing a cup-with-handle buy point of 54.16. American Airlines ( AAL ) and United Airlines ( UAL ) climbed 0.2% and 0.4%, respectively, both closing off session highs.
Expectations were high ahead of the Investor Day, and Wall Street's main take-aways could revolve around what the carrier has in store for next year as costs for jet fuel and labor rise and some of the nation's biggest airports undergo renovations.
Delta said in a presentation that it was targeting 2018 earnings per share of $5.35-$5.70, higher than Zacks estimates for $5.41. The carrier also said it was "addressing nonfuel unit costs" - which became a source of investor angst during third-quarter earnings season - aiming for nonfuel unit costs of flat to up 2% next year.
Delta expects unit revenue - which measures an airline's operating efficiency by gauging sales from passengers as they relate to an airline's flight capacity - to be up around 4% in the fourth quarter.
That was more aggressive than an outlook given in October for a 2%-4% increase. Delta said the fourth quarter was "producing strong revenue trends with positive unit revenue in all geographic entities." JetBlue (JBLU) on Tuesday also raised its Q4 unit revenue outlook. United and Southwest Airlines (LUV) raised their Q4 unit revenue forecasts last week.
JetBlue, which briefly hit a buy point on Tuesday before reversing sharply lower, fell 1.4%. Southwest Airlines advanced 1.1%, hitting a new high and becoming further extended from a recent breakout.
"Traditionally, the airlines use investor days to discuss significant cost and revenue initiatives," Cowen analyst Helane Becker said in a research note on Monday. "At this point, Delta has been there, done that. Delta continues to need to prove their margins can improve from current levels."
However, the company said that fourth-quarter operating margins were on track to come in at around 11%, compared to an earlier forecast for 11%-13%, with higher fuel prices dragging the figure lower.
Delta expects Q4 flight capacity to be up 2.5%-3% vs. earlier expectations for a roughly 2% increase. That reflects Delta's coverage of Virgin Atlantic flights in the trans-Atlantic market.
And the carrier expects Q4 nonfuel unit costs to increase 5%-5.5%. Those higher costs were pushed higher by "continued investment in our people and product combined with accelerated depreciation of aircraft retirements."
Delta last week said it had agreed to enter into a joint venture with Canadian low-cost carrier WestJet, a move that strengthens Delta's international service.
RELATED:
United, American, Delta Rule Air Travel, But Higher Costs Loom
Airline Industry News And Stocks To Watch
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines ( AAL ) and United Airlines ( UAL ) climbed 0.2% and 0.4%, respectively, both closing off session highs. Shares of Delta Air Lines ( DAL ) burst higher Thursday, as the carrier kicked off its Investor Day with a solid 2018 forecast and a fourth-quarter outlook that included more bullish expectations for unit revenue but weaker margins. Expectations were high ahead of the Investor Day, and Wall Street's main take-aways could revolve around what the carrier has in store for next year as costs for jet fuel and labor rise and some of the nation's biggest airports undergo renovations.
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American Airlines ( AAL ) and United Airlines ( UAL ) climbed 0.2% and 0.4%, respectively, both closing off session highs. United and Southwest Airlines (LUV) raised their Q4 unit revenue forecasts last week. And the carrier expects Q4 nonfuel unit costs to increase 5%-5.5%.
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American Airlines ( AAL ) and United Airlines ( UAL ) climbed 0.2% and 0.4%, respectively, both closing off session highs. Shares of Delta Air Lines ( DAL ) burst higher Thursday, as the carrier kicked off its Investor Day with a solid 2018 forecast and a fourth-quarter outlook that included more bullish expectations for unit revenue but weaker margins. Delta expects unit revenue - which measures an airline's operating efficiency by gauging sales from passengers as they relate to an airline's flight capacity - to be up around 4% in the fourth quarter.
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American Airlines ( AAL ) and United Airlines ( UAL ) climbed 0.2% and 0.4%, respectively, both closing off session highs. Shares of Delta Air Lines ( DAL ) burst higher Thursday, as the carrier kicked off its Investor Day with a solid 2018 forecast and a fourth-quarter outlook that included more bullish expectations for unit revenue but weaker margins. United and Southwest Airlines (LUV) raised their Q4 unit revenue forecasts last week.
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7242.0
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2017-12-14 00:00:00 UTC
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Spirit Airlines Making Big Strides in These 2 Key Metrics
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AAL
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https://www.nasdaq.com/articles/spirit-airlines-making-big-strides-these-2-key-metrics-2017-12-14
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2017 has mostly been a year to forget for Spirit Airlines (NASDAQ: SAVE) investors, with a wave of pilot-related cancellations and a devastating hurricane season wreaking havoc on the company's results . Though the stock has bounced back a bit from its most recent lows, it's still down 28% year to date. However, data released recently by Spirit shows underlying improvements in two key metrics -- unit costs and on-time arrivals -- setting the company up for what should be a much better 2018 and beyond.
SAVE data by YCharts .
A low-cost advantage that's only getting larger
Spirit offers customers rock-bottom fares that are far lower than traditional airlines. The company is able to offer those fares by packing more seats into the same amount of space than its competitors, flying its aircraft more hours per day, and operating without costly amenities like first-class service or airport lounges.
As a result, the company has always enjoyed a healthy unit-cost advantage over its competitors. But Spirit's most recent investor presentation reveals just how much that gap has been widening.
*Based on cost per available seat mile, excluding fuel. Stage-length adjusted to 1,000 miles. Data source: Spirit Airlines November 2017 investor presentation.
On a trailing-12-month basis, five years ago, Southwest Airlines' unit costs were 14% higher than Spirit's. Today, they're 38% higher -- an increase of 24 percentage points. At United, the difference is even more pronounced, with Spirit's relative cost advantage widening by 39 percentage points over the same period.
Spirit's capacity growth has contributed to its impressive cost performance as the company benefits from its scale, with fixed expenses being spread over an increasing number of available seat miles. But according to the company, the larger factor has been the company's relentless focus on controlling costs. Even better for investors, the company expects the unit-cost gap between Spirit and its rivals will continue to increase over the next five years as it keeps adding capacity (available seat miles) more quickly than the competition. In 2018 alone, Spirit is planning capacity growth of 22% to 25%.
This should help moderate fears that Spirit is susceptible to prolonged fare wars with legacy carriers like United, because over the long term, competing on price just doesn't make sense for airlines with such dramatically higher cost structures.
On-time arrivals in October were surprisingly strong
Spirit's fourth quarter is off to a great start in one important area: on-time arrivals. Since CEO Bob Fornaro took the reins in early 2016, the company had been stressing the importance of improving its on-time performance, and had made some good strides through the early part of 2017 -- right up until a pilot-related work stoppage in May and the 1,600-plus cancellations caused by the hurricanes.
But Spirit rebounded big-time in October: With an impressive on-time performance of 87.1%, Spirit said it "expected to land near the top of monthly industry rankings." For context, according to the Department of Transportation, out of the 12 largest carriers, for the 12 months ending September 2017, Spirit ranked 11th.
And though the DOT's report for October isn't out yet, Spirit's 87.1% monthly performance beat Delta by 0.8 percentage points, and beat both United and Southwest by more than 3 percentage points. For a company that has historically landed closer to the bottom of the DOT rankings, that's a big turnaround.
Admittedly, one month doesn't make a trend, and Spirit still has a long way to go to be seen as a reliable airline. But Fornaro appears to be serious about making operational improvements to improve the airline's public perception. If Spirit can eventually shed its reputation for poor service, while continuing to widen its cost advantage versus its peers, the next couple years could turn out very well for current shareholders.
10 stocks we like better than Spirit Airlines
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Spirit Airlines wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of December 4, 2017
Andy Gould owns shares of Spirit Airlines. Andy Gould has the following options: short Dec. 2017 $35 puts on Spirit Airlines. The Motley Fool owns shares of and recommends Spirit Airlines. The Motley Fool recommends JetBlue. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2017 has mostly been a year to forget for Spirit Airlines (NASDAQ: SAVE) investors, with a wave of pilot-related cancellations and a devastating hurricane season wreaking havoc on the company's results . The company is able to offer those fares by packing more seats into the same amount of space than its competitors, flying its aircraft more hours per day, and operating without costly amenities like first-class service or airport lounges. This should help moderate fears that Spirit is susceptible to prolonged fare wars with legacy carriers like United, because over the long term, competing on price just doesn't make sense for airlines with such dramatically higher cost structures.
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And though the DOT's report for October isn't out yet, Spirit's 87.1% monthly performance beat Delta by 0.8 percentage points, and beat both United and Southwest by more than 3 percentage points. *Stock Advisor returns as of December 4, 2017 Andy Gould owns shares of Spirit Airlines. The Motley Fool owns shares of and recommends Spirit Airlines.
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2017 has mostly been a year to forget for Spirit Airlines (NASDAQ: SAVE) investors, with a wave of pilot-related cancellations and a devastating hurricane season wreaking havoc on the company's results . However, data released recently by Spirit shows underlying improvements in two key metrics -- unit costs and on-time arrivals -- setting the company up for what should be a much better 2018 and beyond. But Spirit rebounded big-time in October: With an impressive on-time performance of 87.1%, Spirit said it "expected to land near the top of monthly industry rankings."
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Even better for investors, the company expects the unit-cost gap between Spirit and its rivals will continue to increase over the next five years as it keeps adding capacity (available seat miles) more quickly than the competition. But Spirit rebounded big-time in October: With an impressive on-time performance of 87.1%, Spirit said it "expected to land near the top of monthly industry rankings." *Stock Advisor returns as of December 4, 2017 Andy Gould owns shares of Spirit Airlines.
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7243.0
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2017-12-14 00:00:00 UTC
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5 Airline Stocks in Focus this Winter Holiday Season
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https://www.nasdaq.com/articles/5-airline-stocks-focus-winter-holiday-season-2017-12-14
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Earlier this month, Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, issued a report saying that 51 million passengers are expected to fly globally on U.S. airlines during the upcoming 21-day winter holiday travel period.
An additional 1.7 million people are expected to travel during this period (Dec 15 through Jan 4) compared to last year's 49.3 million people, representing an increase of about 3.5%. The higher demand reflects an improving economy as well as affordable airfares.
According to A4A, 91,000 additional seats will be made available by airlines every day across their networks so that the additional 80,000 daily passengers can be accommodated during this period. Airlines expect to use larger planes and add more flights during the upcoming holiday season. December 21, December 22 and December 26 are expected to be the busiest travel days of the winter holiday season while December 16, Christmas Eve, Christmas Day and New Year's Eve are expected to be the lightest travel days.
With the third quarter of 2017 being challenging for the airline industry due to competitive pricing actions, higher fuel costs, Hurricanes Irma and Harvey and the earthquake in Mexico City, focus will remain on how the industry fares during the holiday season. Here is a look at five U.S. airline stocks that will remain in focus during the 21-day winter holiday season.
American Airlines Group Inc. AAL : American Airlines, together with its wholly-owned regional airline subsidiaries and third-party regional carriers operating as American Eagle, operates an average of almost 6,700 flights daily spanning 350 destinations across more than 50 countries. The Fort Worth, TX-based company has hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington, DC.
The company is investing in new aircraft and also working on driving efficiencies. American Airlines expects cost savings of $1 billion by 2021 on the back of increased use of technology, changes to process and procedures and further elimination of post-merger redundancies.
Shares of American Airlines are up 7.3% year to date, compared to the 11.1% rally of the industry it belongs to.
Southwest Airlines Co. LUV : Dallas, TX-based Southwest Airlines is a major passenger airline providing scheduled air transportation in the United States and near-international markets. At the end of the third quarter, the company had 687 aircraft in its fleet, reflecting the third quarter delivery of six new 737-800 aircraft from Boeing, nine new 737 MAX 8 aircraft from Boeing, and six pre-owned Boeing 737-700 aircraft from third parties. The company, which is replacing its old aircraft, expects to take delivery of 11 new 737-800 aircraft, five new 737 MAX 8 aircraft, and four pre-owned 737-700 aircraft during the fourth quarter. Southwest Airlines expects to exit the year with a fleet of 707 aircraft with the number expected to increase to 750 by the end of 2018.
Southwest Airlines reported a 3.4% increase in revenue passenger miles in November 2017 from the year-ago period and said that it now expects fourth quarter 2017 operating revenue per available seat mile ("RASM") to increase in the 1-2% range from the year-ago period. The company had previously said (on the third quarter conference call) that fourth quarter RASM would be up slightly to up 1.5% year-over-year.
Shares of Southwest Airlines are up 26.7% year to date, compared to the 11.1% rally of the industry it belongs to.
United Airlines UAL : Chicago, IL-based United Airlines operates about 4,500 flights a day to 337 airports spanning five continents through United and its regional carriers. The company's hubs in the United States include Chicago, Denver, Houston, Los Angeles, Newark/New York, San Francisco and Washington, DC. While 751 mainline aircraft are run by United, the airline's United Express carriers operate 489 regional aircraft.
The company recently reported that consolidated traffic (revenue passenger miles) increased 5.1% in November 2017. Moreover, the company witnessed the fewest cancelations of any month in its history and also set a new record with its best ever on-time arrival rate.
Delta Air Lines DAL : Atlanta, GA-based Delta serves more than 180 customers every year. Delta and the Delta Connection carriers offer service to 306 destinations across 52 countries on six continents. Over the last five years, Delta has invested about $2 billion to build a franchise with some of the best airline brands around the world including Virgin Atlantic, AeroMexico, GOL, China Eastern with the latest being an investment in the Air France-KLM group. Key hubs and markets include Atlanta, Boston, Detroit, Los Angeles, Minneapolis-St. Paul, New York-JFK, New York-LaGuardia, Salt Lake City, Seattle, Amsterdam, London-Heathrow, Paris-Charles de Gaulle, and Tokyo-Narita.
Shares of Delta are up 9% year to date, compared to the 11.1% rally of the industry it belongs to.
JetBlue Airways Corporation JBLU : JetBlue provides air transportation services across the United States, the Caribbean and Latin America with an average of 1,000 flights per day. Known as New York's Hometown Airline, JetBlue is the leading carrier in Boston, Fort Lauderdale-Hollywood, Los Angeles (Long Beach), Orlando, and San Juan. The company said that traffic in November increased 2.8% from the year-ago period.
JetBlue also updated its outlook for the fourth quarter with RASM year-over-year growth expected to range between minus 0.5% and 1.5%. This compares favorably to the previously issued guidance of a decline between minus 3% and 0%. The company also expects the negative impact from the recent hurricanes to be less than what had been previously forecasted.
While the stocks discussed above are all Zacks Rank #3 (Hold) stocks, you can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
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Southwest Airlines Company (LUV): Free Stock Analysis Report
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Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
To read this article on Zacks.com click here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines Group Inc. AAL : American Airlines, together with its wholly-owned regional airline subsidiaries and third-party regional carriers operating as American Eagle, operates an average of almost 6,700 flights daily spanning 350 destinations across more than 50 countries. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The company's hubs in the United States include Chicago, Denver, Houston, Los Angeles, Newark/New York, San Francisco and Washington, DC.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc. AAL : American Airlines, together with its wholly-owned regional airline subsidiaries and third-party regional carriers operating as American Eagle, operates an average of almost 6,700 flights daily spanning 350 destinations across more than 50 countries. December 21, December 22 and December 26 are expected to be the busiest travel days of the winter holiday season while December 16, Christmas Eve, Christmas Day and New Year's Eve are expected to be the lightest travel days.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc. AAL : American Airlines, together with its wholly-owned regional airline subsidiaries and third-party regional carriers operating as American Eagle, operates an average of almost 6,700 flights daily spanning 350 destinations across more than 50 countries. Earlier this month, Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, issued a report saying that 51 million passengers are expected to fly globally on U.S. airlines during the upcoming 21-day winter holiday travel period.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc. AAL : American Airlines, together with its wholly-owned regional airline subsidiaries and third-party regional carriers operating as American Eagle, operates an average of almost 6,700 flights daily spanning 350 destinations across more than 50 countries. Here is a look at five U.S. airline stocks that will remain in focus during the 21-day winter holiday season.
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7244.0
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2017-12-13 00:00:00 UTC
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United Continental's New Share Buyback Plan Is Less Impressive Than It Seems
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AAL
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https://www.nasdaq.com/articles/united-continentals-new-share-buyback-plan-less-impressive-it-seems-2017-12-13
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Last week, airline giant United Continental (NYSE: UAL) announced that it is on track to complete its current $2 billion share repurchase authorization by the end of this month. The company's board has also authorized a new $3 billion share buyback program.
Share repurchases have become very popular among airlines in recent years, as low fuel prices and a more rational competitive environment have led to higher industry profitability. However, like fellow major airline American Airlines (NASDAQ: AAL) , United is spending beyond its means on buybacks. This move could be dangerous for investors in the long run.
Returning lots of cash to shareholders
United Continental has been actively returning cash to shareholders through share repurchases since 2014. However, it really ramped up its capital return program in 2015, as falling fuel prices caused free cash flow to surge. United spent about $1.2 billion on share buybacks in 2015 and $2.6 billion in 2016. If United completes its current share repurchase authorization by year-end as planned, it will have spent another $1.8 billion on buybacks in 2017.
Buybacks have reduced United's share count dramatically over the past few years. In the second quarter of 2014, United Continental had a diluted share count of 396 million. That fell to 301 million as of last quarter and will decline further in the fourth quarter.
This 24% reduction in the share count means that United Continental's earnings per share is more than 30% higher than it otherwise would have been. The new authorization would allow United to reduce its share count by another 17%, based on the recent stock price.
American Airlines has repurchased stock at an even faster rate. The 37% reduction in its share count over the past four years represents an EPS tailwind of more than 50%, all else equal.
The case for more buybacks
Share repurchases can be a good tool for a company with an undervalued stock. They also allow management to signal confidence in the business.
Bulls would argue that United Continental stock is significantly undervalued today, having fallen 24% from its all-time high. Furthermore, United Continental stock trades for just 10 times earnings, and United's earnings would move significantly higher if a corporate tax cut goes into effect. From this perspective, a robust share buyback program is warranted.
Where's the cash?
On the other hand, while United Continental remains solidly profitable, its profit margin is receding . In 2015 and 2016, the company produced adjusted pre-tax margins of about 12%. By contrast, it is on track to record a pre-tax margin of 8% this year, because of a combination of higher non-fuel unit costs, higher fuel prices, and stagnant unit revenue.
The picture is even worse when you focus on free cash flow. United Continental was producing as much as $3 billion of free cash flow annually during the "good old days" of 2015 and 2016. However, free cash flow has actually turned negative this year.
United Continental Free Cash Flow (TTM) , data by YCharts .
This means that United Continental has borrowed every dollar it has returned to shareholders this year. Free cash flow may improve somewhat next year, as capex is set to decline after peaking at $4.6 billion-$4.8 billion in 2017. Still, free cash flow is likely to remain far below the peak levels of 2015 and 2016.
Is the outlook really that rosy?
United's sudden lack of free cash flow is one reason for investors to be suspicious of its share repurchase program. That said, American Airlines has bought back a lot of stock even in years when it didn't produce any free cash flow. Low interest rates have allowed both American and United to pay for most of their aircraft purchases with debt, freeing up cash for buybacks.
It's also far from clear that the stock is undervalued. While United Continental recently raised its fourth-quarter revenue outlook , it still expects unit revenue to decline 0%-2% year over year. In the long run, it is likely to face higher competition from low-fare carriers in many markets. The company hopes to offset these headwinds through better segmentation and revenue management, but those efforts aren't guaranteed to succeed.
Moreover, jet fuel prices have moved significantly higher in the past few months. As a result, United Continental may need full-year unit revenue growth of 3%-4% in 2018 just to keep its profit margin stable.
If United's profitability will continue to fall in 2018, 10 times earnings might be a very generous valuation. Meanwhile, adding debt to fund share buybacks boosts EPS, but it could also get the company into trouble during the next recession. United Continental shareholders may eventually come to regret management's current love affair with share buybacks.
10 stocks we like better than United Continental Holdings
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and United Continental Holdings wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of December 4, 2017
Adam Levine-Weinberg has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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However, like fellow major airline American Airlines (NASDAQ: AAL) , United is spending beyond its means on buybacks. Last week, airline giant United Continental (NYSE: UAL) announced that it is on track to complete its current $2 billion share repurchase authorization by the end of this month. Share repurchases have become very popular among airlines in recent years, as low fuel prices and a more rational competitive environment have led to higher industry profitability.
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However, like fellow major airline American Airlines (NASDAQ: AAL) , United is spending beyond its means on buybacks. Returning lots of cash to shareholders United Continental has been actively returning cash to shareholders through share repurchases since 2014. However, it really ramped up its capital return program in 2015, as falling fuel prices caused free cash flow to surge.
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However, like fellow major airline American Airlines (NASDAQ: AAL) , United is spending beyond its means on buybacks. Returning lots of cash to shareholders United Continental has been actively returning cash to shareholders through share repurchases since 2014. Furthermore, United Continental stock trades for just 10 times earnings, and United's earnings would move significantly higher if a corporate tax cut goes into effect.
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However, like fellow major airline American Airlines (NASDAQ: AAL) , United is spending beyond its means on buybacks. United's sudden lack of free cash flow is one reason for investors to be suspicious of its share repurchase program. That said, American Airlines has bought back a lot of stock even in years when it didn't produce any free cash flow.
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7245.0
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2017-12-11 00:00:00 UTC
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Southwest Airlines and United Continental Just Raised Their Q4 Revenue Forecasts
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https://www.nasdaq.com/articles/southwest-airlines-and-united-continental-just-raised-their-q4-revenue-forecasts-2017-12
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Southwest Airlines (NYSE: LUV) and United Continental (NYSE: UAL) disappointed investors in October with their third-quarter earnings reports and fourth-quarter forecasts. While both carriers projected that their unit revenue trends would improve sequentially in the current quarter, analysts still had to slash their Q4 earnings estimates.
However, Southwest and United both raised their unit revenue forecasts late last week. This suggests that the recent round of airline fare wars may be abating, which would be good news for American Airlines (NASDAQ: AAL) and Delta Air Lines (NYSE: DAL) as well.
Resetting investors' expectations
Unit revenue fell at Southwest Airlines and United Continental last quarter. United posted a particularly poor performance, with passenger revenue per available seat mile (PRASM) down 3.7% year over year . The two carriers reported facing a variety of unusual revenue headwinds, including the negative impact of Hurricane Harvey on travel demand in the Houston area.
At the time of its Q3 earnings report, Southwest projected that unit revenue would return to growth this quarter, rising as much as 1.5%. On the other hand, the company acknowledged that unit costs would likely be higher than previously expected in the fourth quarter. Meanwhile, United Continental estimated that PRASM would retreat by 1%-3% in the fourth quarter, leading to another steep margin decline. Furthermore, management didn't offer investors any comfort that the company's profit margin would improve in 2018.
As a result, shares of both companies fell significantly following their respective earnings reports in mid-late October.
Southwest Airlines and United Continental stock performance. Data by YCharts .
By contrast, American Airlines and Delta Air Lines posted more promising earnings results. Delta reported that PRASM increased 2.7% last quarter and projected that PRASM will rise 2%-4% in Q4. American saw a 1.1% increase in total revenue per available seat mile (RASM) in Q3 and expects to report a 2.5%-4.5% RASM gain in Q4.
The outlook isn't so bad, after all
Last Thursday, Southwest Airlines raised its Q4 unit revenue guidance. It now projects that RASM will increase 1%-2% this quarter. A day later, United Continental followed suit. United now expects PRASM to decline 0%-2% in the fourth quarter: 1 percentage point better than its initial forecast.
Neither carrier offered any details about what is driving the better-than-expected revenue results. One possibility is that the improvement is largely concentrated in Houston, where United and Southwest are the two largest airlines by far. An uptick in oil prices in the past two months may have accelerated the post-Hurricane Harvey economic recovery there.
The other possibility is simply that the vicious fare wars that broke out this summer have started to abate. This would be a very good sign for the rest of the airline industry. Travel demand has been strong all year, so there was never a rational reason for such extensive discounting.
Unit revenue growth is critical for airlines' health now
The improving unit revenue outlook -- at least for Southwest Airlines and United Continental -- has come not a moment too soon. The increase in their unit revenue forecasts has done no more than offset the recent rise in fuel prices, which will drive up their unit costs.
Indeed, achieving solid unit revenue growth will be critical for airlines in 2018. Barring another collapse in oil prices, most airlines will need unit revenue increases of 3% or more next year just to keep their profit margins stable.
Investors will get another look at industry unit revenue trends later this week, when Delta Air Lines holds its annual investor day. Delta's management commentary will likely reveal whether the strengthening unit revenue trends at Southwest and United are part of a broader upswing.
10 stocks we like better than Southwest Airlines
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Southwest Airlines wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of December 4, 2017
Adam Levine-Weinberg owns shares of Delta Air Lines. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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This suggests that the recent round of airline fare wars may be abating, which would be good news for American Airlines (NASDAQ: AAL) and Delta Air Lines (NYSE: DAL) as well. While both carriers projected that their unit revenue trends would improve sequentially in the current quarter, analysts still had to slash their Q4 earnings estimates. The two carriers reported facing a variety of unusual revenue headwinds, including the negative impact of Hurricane Harvey on travel demand in the Houston area.
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This suggests that the recent round of airline fare wars may be abating, which would be good news for American Airlines (NASDAQ: AAL) and Delta Air Lines (NYSE: DAL) as well. Resetting investors' expectations Unit revenue fell at Southwest Airlines and United Continental last quarter. At the time of its Q3 earnings report, Southwest projected that unit revenue would return to growth this quarter, rising as much as 1.5%.
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This suggests that the recent round of airline fare wars may be abating, which would be good news for American Airlines (NASDAQ: AAL) and Delta Air Lines (NYSE: DAL) as well. Resetting investors' expectations Unit revenue fell at Southwest Airlines and United Continental last quarter. Unit revenue growth is critical for airlines' health now The improving unit revenue outlook -- at least for Southwest Airlines and United Continental -- has come not a moment too soon.
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This suggests that the recent round of airline fare wars may be abating, which would be good news for American Airlines (NASDAQ: AAL) and Delta Air Lines (NYSE: DAL) as well. Resetting investors' expectations Unit revenue fell at Southwest Airlines and United Continental last quarter. Southwest Airlines and United Continental stock performance.
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7246.0
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2017-12-11 00:00:00 UTC
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Higher Altitudes Expected for Spirit Airlines Incorporated Stock
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https://www.nasdaq.com/articles/higher-altitudes-expected-spirit-airlines-incorporated-stock-2017-12-11
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Spirit Airlines Incorporated (NASDAQ: SAVE ) and SAVE stock appear well-positioned for growth. The Miramar, Florida-based carrier has enjoyed lower cost and higher growth than its peers, including its much-loved rival Southwest Airlines Co (NYSE: LUV ).
SAVE stock has exhibited volatility in the last few years; however, it has recently begun trending upward. This uptrend, along with industry-leading growth numbers, position the stock to fly even higher.
7 Best Dividend ETFs to Buy for 2018
Spirit Succeeds With Its 'Ultra-Low-Cost' Strategy
Spirit has taken the "no frills" concept to new levels, so much so that some classify the airline as an "ultra-low-cost carrier." The strategy employed by SAVE means that when customers buy a plane ticket, a seat on the plane is all that's included. Checked luggage, carry-on bags, even purses and bottles of water all involve added fees.
Where SAVE has outperformed its competitors is in the growthdepartment. Over the past year, Spirit grew its revenue passenger miles (RPMs) by over 20%. Legacy carriers such as American Airlines Group Inc (NASDAQ: AAL ), Delta Air Lines, Inc. (NYSE: DAL ) and United Continental Holdings Inc (NYSE: UAL ) grew this metric in the single digits. Even traditional low-cost carriers such as Southwest and JetBlue Airways Corporation (NASDAQ: JBLU ) did not grow RPM into the double-digits.
This growth has directly benefitted SAVE stock. Annual revenue growth has averaged 16.8% over the last five years. Net income has increased by 28.2% per year on average over the same period. Despite this growth, the stock trades at a price-earnings ratio of just over 13. Southwest, which currently experiences lower growth, trades at a P/E ratio of over 17.
Spirit Airlines operates all over the United States, as well as flying to destinations in Canada, the Caribbean and Latin America. Moreover, the airline has plenty of room to expand. Right now, it only serves 59 total destinations. While the U.S. is well-served, the airline has yet to reach a saturation point. Also, with only two destinations each in Canada and Mexico, SAVE has just scratched the surface on what it can offer in both countries. The airline also has similar room to expand operations throughout South America.
SAVE Stock Benefits From Creative Marketing and Low Costs
SAVE has also employed some unique marketing strategies. For only $59.95 (and $69.95 per year in future years), customers can join the $9 Fare Club. This club allows exclusive access to discounted airfares and vacation packages, as well as 50% off bag fees. United blamed this program for reducing its walk-up sales by 80-90% in just a week.
Like Southwest and JetBlue, SAVE only utilizes a few aircraft types. All of Spirit's aircraft are built by Airbus. Its older planes are mostly Airbus A319-100 aircraft. Those aircraft are being retired. The A320-200, A320neo, and the A321-200 will be its only aircraft in the future.
Spirit has also succeeded in keeping other costs low. According to planestats.com , costs per available seat mile (CASMs) in 2016 amounted to 7.2 cents. This compares favorably to Southwest, which has 10.8 cents in CASMs and JetBlue with CASMs of 10.2 cents. However, one unknown cost could still hurt SAVE stock - pilot salaries.
Cost Issues Remain
Pilot issues have plagued the airline for years. A strike in 2010 led to 850 flight cancellations. According to Forbes , captains with ten years of experience make $100 less per hour flying for Spirit than for United. Moreover, most of its competitors have agreed to increase pilot pay. This means Spirit will likely have to raise pilot pay to retain and attract pilots. Given the company's structure, it's likely the added cost will fall on customers. Where Spirit's costs will fall after an agreement with pilots is finalized remains to be seen.
The labor cost issue, as well as fuel costs that are higher than at any time since the energy price slump, present negatives to SAVE stock. However, the stock appears to have established a floor in the mid-$30s per share. At its current price in the low $40s, the stock appears poised to enjoy more upside in the near term.
Final Thoughts on SAVE Stock
With this uptrend and the company's growth, the SAVE stock price should grow along with it. The airline has achieved higher growth and lower costs than its peers. Moreover, its "ultra-low-cost" strategy has appealed to a wide variety of travelers and has stolen market share from its competitors.
5 Mutual Funds to Buy as Dow Surpasses 24,000
With the added business, SAVE has steadily added routes, planes and new destinations. Likely increases in labor and fuel costs loom over the stock. However, with more routes, destinations and travelers "catching the Spirit," the airline has positioned itself to rule the ultra-low-cost niche.
If one wants a position in the airline industry and SAVE stock specifically, now is a good time to begin boarding.
As of this writing, Will Healy did not hold a position in any of the aforementioned stocks.
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The post Higher Altitudes Expected for Spirit Airlines Incorporated Stock appeared first on InvestorPlace .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Legacy carriers such as American Airlines Group Inc (NASDAQ: AAL ), Delta Air Lines, Inc. (NYSE: DAL ) and United Continental Holdings Inc (NYSE: UAL ) grew this metric in the single digits. The Miramar, Florida-based carrier has enjoyed lower cost and higher growth than its peers, including its much-loved rival Southwest Airlines Co (NYSE: LUV ). Even traditional low-cost carriers such as Southwest and JetBlue Airways Corporation (NASDAQ: JBLU ) did not grow RPM into the double-digits.
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Legacy carriers such as American Airlines Group Inc (NASDAQ: AAL ), Delta Air Lines, Inc. (NYSE: DAL ) and United Continental Holdings Inc (NYSE: UAL ) grew this metric in the single digits. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Spirit Airlines Incorporated (NASDAQ: SAVE ) and SAVE stock appear well-positioned for growth. The Miramar, Florida-based carrier has enjoyed lower cost and higher growth than its peers, including its much-loved rival Southwest Airlines Co (NYSE: LUV ).
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Legacy carriers such as American Airlines Group Inc (NASDAQ: AAL ), Delta Air Lines, Inc. (NYSE: DAL ) and United Continental Holdings Inc (NYSE: UAL ) grew this metric in the single digits. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Spirit Airlines Incorporated (NASDAQ: SAVE ) and SAVE stock appear well-positioned for growth. Final Thoughts on SAVE Stock With this uptrend and the company's growth, the SAVE stock price should grow along with it.
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Legacy carriers such as American Airlines Group Inc (NASDAQ: AAL ), Delta Air Lines, Inc. (NYSE: DAL ) and United Continental Holdings Inc (NYSE: UAL ) grew this metric in the single digits. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Spirit Airlines Incorporated (NASDAQ: SAVE ) and SAVE stock appear well-positioned for growth. This uptrend, along with industry-leading growth numbers, position the stock to fly even higher.
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7247.0
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2017-12-08 00:00:00 UTC
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Analysts Anticipate QQEW To Hit $63
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AAL
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https://www.nasdaq.com/articles/analysts-anticipate-qqew-hit-63-2017-12-08
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nan
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nan
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Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel , we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the First Trust NASDAQ-100 Equal Weighted Index Fund ETF (Symbol: QQEW), we found that the implied analyst target price for the ETF based upon its underlying holdings is $63.07 per unit.
With QQEW trading at a recent price near $57.24 per unit, that means that analysts see 10.18% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of QQEW's underlying holdings with notable upside to their analyst target prices are Hasbro, Inc. (Symbol: HAS), JD.com, Inc. (Symbol: JD), and American Airlines Group Inc (Symbol: AAL). Although HAS has traded at a recent price of $91.35/share, the average analyst target is 18.77% higher at $108.50/share. Similarly, JD has 13.35% upside from the recent share price of $38.13 if the average analyst target price of $43.22/share is reached, and analysts on average are expecting AAL to reach a target price of $57.00/share, which is 12.03% above the recent price of $50.88. Below is a twelve month price history chart comparing the stock performance of HAS, JD, and AAL:
Below is a summary table of the current analyst target prices discussed above:
Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have a valid justification for their targets, or are they behind the curve on recent company and industry developments? A high price target relative to a stock's trading price can reflect optimism about the future, but can also be a precursor to target price downgrades if the targets were a relic of the past. These are questions that require further investor research.
10 ETFs With Most Upside To Analyst Targets »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Below is a twelve month price history chart comparing the stock performance of HAS, JD, and AAL: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of QQEW's underlying holdings with notable upside to their analyst target prices are Hasbro, Inc. (Symbol: HAS), JD.com, Inc. (Symbol: JD), and American Airlines Group Inc (Symbol: AAL). Similarly, JD has 13.35% upside from the recent share price of $38.13 if the average analyst target price of $43.22/share is reached, and analysts on average are expecting AAL to reach a target price of $57.00/share, which is 12.03% above the recent price of $50.88.
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Three of QQEW's underlying holdings with notable upside to their analyst target prices are Hasbro, Inc. (Symbol: HAS), JD.com, Inc. (Symbol: JD), and American Airlines Group Inc (Symbol: AAL). Similarly, JD has 13.35% upside from the recent share price of $38.13 if the average analyst target price of $43.22/share is reached, and analysts on average are expecting AAL to reach a target price of $57.00/share, which is 12.03% above the recent price of $50.88. Below is a twelve month price history chart comparing the stock performance of HAS, JD, and AAL: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now?
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Similarly, JD has 13.35% upside from the recent share price of $38.13 if the average analyst target price of $43.22/share is reached, and analysts on average are expecting AAL to reach a target price of $57.00/share, which is 12.03% above the recent price of $50.88. Below is a twelve month price history chart comparing the stock performance of HAS, JD, and AAL: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of QQEW's underlying holdings with notable upside to their analyst target prices are Hasbro, Inc. (Symbol: HAS), JD.com, Inc. (Symbol: JD), and American Airlines Group Inc (Symbol: AAL).
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Below is a twelve month price history chart comparing the stock performance of HAS, JD, and AAL: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of QQEW's underlying holdings with notable upside to their analyst target prices are Hasbro, Inc. (Symbol: HAS), JD.com, Inc. (Symbol: JD), and American Airlines Group Inc (Symbol: AAL). Similarly, JD has 13.35% upside from the recent share price of $38.13 if the average analyst target price of $43.22/share is reached, and analysts on average are expecting AAL to reach a target price of $57.00/share, which is 12.03% above the recent price of $50.88.
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7248.0
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2017-12-07 00:00:00 UTC
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United Airlines, Southwest Boost Unit Revenue Guidance; Delta Nears Buy
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AAL
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https://www.nasdaq.com/articles/united-airlines-southwest-boost-unit-revenue-guidance-delta-nears-buy-2017-12-07
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nan
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nan
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United Airlines ( UAL ) late Thursday raised its fourth-quarter unit revenue outlook and OK'd a new $3 billion share buyback program. That followed a better unit revenue forecast from Southwest Airlines ( LUV ) earlier in the day.
[ibd-display-video id=3009194 width=50 float=left autostart=true] United said it expected fourth-quarter passenger unit revenue to be flat to down 2%, compared to an earlier forecast for 1%-3% drop. Unit revenue is a key industry metric that tries to gauge an airline's operating efficiency by looking at its revenue as it relates to overall flight capacity.
For November, United said that traffic and capacity both rose 5.1%. United said that it had the fewest cancellations of any month in the company's history.
The carrier said it expected to wrap up a $2 billion buyback offering from July 2016 by the end of this month.
"We continue to invest in our employees, our customer experience and the growth of our business," CFO Andrew Levy said in a statement. "Returning cash to our shareholders reflects the strength of our balance sheet and the confidence we have in our future."
United rose nearly 2% after hours in the stock market today, aiding its recovery from a deep slide that came after the carrier in October gave a murky financial forecast for next year that flat-out terrified investors. United closed the regular session up 2.15% to 63.53.
Southwest Airlines ( LUV ) also hiked its fourth-quarter unit revenue guidance, based on solid November traffic results.
The carrier now expects a unit revenue pickup of 1%-2% in the much-watched industry metric. Thursday's forecast compares to an earlier outlook for a range of "up slightly to up 1.5 percent."
Traffic during November rose 3.4%, while capacity climbed 2.5%.
"The increase in unit revenue appears to be both demand and yield based," Cowen analyst Helane Becker said, referring to the airline's ability to get more money out of passengers when they fly. "We suspect the remainder of the industry will also raise 4Q17 unit revenue guidance, but note rising jet fuel costs might put modest pressure on the EPS accretion from the improved revenue environment."
Shares rose 3.1% to 63.02, now slightly extended from a 59.67 buy point of a cup-with-handle base.
Delta Air Lines ( DAL ), whose stock jumped on Monday after it reported November traffic figures, advanced 2.1% to 53.41. That stock is in a cup-with-handle base with a potential buy point of 54.16, one of several notable big caps nearing buy points .
American Airlines ( AAL ), which is also making its way through a cup-with-handle base with a 53.84 entry, climbed 2.6% to 50.88.
Airline stocks have been a moving target for the latter half of this year, with Wall Street punishing Spirit Airlines ( SAVE ) on fears of steeper fare discounting over the summer, then punishing United and others over concerns about their ability to control rising costs. Some analysts have indicated that Southwest might be best-positioned if Wall Street began to focus more on costs.
IBD'S TAKE:For more on what fare cuts and higher costs mean for the airline business, read this story .
Hawaiian Airlines parent Hawaiian Holdings (HA) on Tuesday also raised its fourth-quarter unit revenue outlook, which Cowen attributed to the bankruptcy filing of Island Air in October. But shares tumbled after the carrier signaled tougher competition on fare prices in the first quarter of next year.
Southwest plans to start offering service to Hawaii next year. United Airlines in June said it would expand service to Hawaii, starting this month.
Hawaiian is also considering whether to launch a no-frills basic economy fare similar to the one available on Delta, American and United, according to CNBC .
Hawaiian popped 4.55% on Thursday to 41.40.
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American Signals Higher '18 Capacity; Another Carrier Warns On Costs
United Airlines Dives On Disastrous Earnings Call; Rival Carriers Fall
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines ( AAL ), which is also making its way through a cup-with-handle base with a 53.84 entry, climbed 2.6% to 50.88. United rose nearly 2% after hours in the stock market today, aiding its recovery from a deep slide that came after the carrier in October gave a murky financial forecast for next year that flat-out terrified investors. "The increase in unit revenue appears to be both demand and yield based," Cowen analyst Helane Becker said, referring to the airline's ability to get more money out of passengers when they fly.
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American Airlines ( AAL ), which is also making its way through a cup-with-handle base with a 53.84 entry, climbed 2.6% to 50.88. That followed a better unit revenue forecast from Southwest Airlines ( LUV ) earlier in the day. Southwest Airlines ( LUV ) also hiked its fourth-quarter unit revenue guidance, based on solid November traffic results.
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American Airlines ( AAL ), which is also making its way through a cup-with-handle base with a 53.84 entry, climbed 2.6% to 50.88. United Airlines ( UAL ) late Thursday raised its fourth-quarter unit revenue outlook and OK'd a new $3 billion share buyback program. Airline stocks have been a moving target for the latter half of this year, with Wall Street punishing Spirit Airlines ( SAVE ) on fears of steeper fare discounting over the summer, then punishing United and others over concerns about their ability to control rising costs.
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American Airlines ( AAL ), which is also making its way through a cup-with-handle base with a 53.84 entry, climbed 2.6% to 50.88. United Airlines ( UAL ) late Thursday raised its fourth-quarter unit revenue outlook and OK'd a new $3 billion share buyback program. [ibd-display-video id=3009194 width=50 float=left autostart=true] United said it expected fourth-quarter passenger unit revenue to be flat to down 2%, compared to an earlier forecast for 1%-3% drop.
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7249.0
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2017-12-07 00:00:00 UTC
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The Zacks Analyst Blog Highlights: American Airlines Group, Delta Air Lines, Hawaiian Holdings and Spirit Airlines
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AAL
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https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-american-airlines-group-delta-air-lines-hawaiian
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nan
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For Immediate Release
Chicago, IL - Dec 7, 2017 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include American Airlines GroupAAL , Delta Air LinesDAL , Hawaiian HoldingsHA and Spirit AirlinesSAVE
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Wednesday's Analyst Blog:
Airline Stock Roundup: AAL, DAL, HA and More
Last week the pilot fiasco at American Airlines Group was the most eye-catching event in the airline space. A scheduling error allowed its pilots to take leave during the upcoming winter holiday period. The prospect of an acute pilot shortage during the busy travel period caused panic among passengers. Some of them also contacted the company to be sure that their travel plans will not be hampered.
Alarmed by the situation, the company finally signed an agreement in principle with its pilots' union - Allied Pilots Association (APA) - to ensure that it operates the flights during December smoothly.
On the traffic front, Delta Air Lines and Hawaiian Holdings' wholly owned subsidiary - Hawaiian Airlines - revealed their respective November traffic numbers in the week. Additionally, Hawaiian Airlines provided an improved outlook on operating revenue per available seat miles (a key measure for unit revenue) for the fourth-quarter as well as 2017. The carrier also revised its fourth-quarter forecast for economic fuel cost per gallon, in line with the scenario of increasing fuel prices.
Furthermore, the International Air Transport Association ("IATA") and Airlines for America (A4A) provided forecasts for 2017 profitability and the upcoming winter holiday season (Dec 15-Jan 4), respectively.
Transportation - Airline Industry 5YR % Return
(Read the last Airline Stock Roundup for Nov 29, 2017 ).
Recap of the Past Week's Most Important Stories
1. In a bid to avoid flight cancellations during the busy winter travel period, American Airlines had offered pilots 150% of their normal hourly pay to operate unassigned flights. However, this measure did not find favor with the APA and it reportedly filed a grievance. According to APA, the company had violated its labor contract. The crisis was resolved over talks between the two parties, prompting APA to withdraw its protest.
Though details of the talks were not disclosed, labor costs are likely to spike further and hurt the bottom line of this Zacks Rank #3 (Hold) carrier in the fourth quarter of 2017. (Read more: Will American Airlines' Pilot Fiasco Hurt Holiday Travel?
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
2. At Delta, November consolidated traffic - measured in revenue passenger miles (RPMs) - came in at 16.15 billion, up 3.5% year over year. This upside was driven by a 3.9% increase in international RPMs. Consolidated capacity (or available seat miles/ASMs) also rose 2.9% year over year to 18.91 billion, primarily owing to 4% rise in domestic ASMs. Moreover, load factor (percentage of seats filled by passengers) improved 40 basis points to 85.4% in the month on the back of traffic growth exceeding capacity expansion. (Read more: Delta Air Lines Reports Strong November Traffic, Stock Up ).
3. At Hawaiian Airlines RPMs increased 6.3% to 1.33 billion in November on a year-over-year basis. Load factor improved 10 basis points to 85.9% as traffic growth outpaced capacity expansion (6.2%) for the month. The carrier now anticipates fourth-quarter economic fuel cost per gallon between $1.80 and $1.90 (previous guidance had estimated the metric between $1.75 and $1.85). Operating unit revenue for the fourth-quarter is also anticipated to grow between 1.5% and 3.5% (previous guidance had estimated the metric to vary between down 1% to up 2%).
For 2017, the metric is estimated to grow between 5.5% and 6.5% (previous guidance had called for growth between 5% and 6%). The company also painted a bright picture for long-term growth at its investor day presentation.
4. The IATA unveiled a rosy view for carriers with respect to the profitability level for 2018. The research firm predicts global net profit of $38.4 billion for the industry. This is much higher than the 2017 profitability forecast of $34.5 billion (increased from the $31.4 billion predicted in June). The bright projection despite increased costs can be attributed to the strong demand for air travel. The bulk of the global profits in 2018 is expected from the North American region ($16.4 billion). The estimated figure is higher than $15.6 billion expected in 2017.
Global net profit margin is expected to improve marginally to 4.7% in 2018 from 4.6% estimated in 2017. The top line is projected to come in at $824 billion next year compared with $754 billion projected in the current year. Cargo revenues are forecasted to increase to $59.2 billion for 2018 (estimated revenues for 2017 are $54.5 billion).
According to the forecast, air travel growth of 6% is expected in 2018 compared with 7.5% growth in 2017. The estimated figure for 2018 is, however, above the average growth of 5.5% in the last 10-20 years. Capacity is projected to rise by 5.7% in 2018. According to the forecast, load factor (percentage of seats filled by passengers) for the next year is expected to touch record levels of 81.4% as capacity expansion is likely to outweigh traffic growth. According to the report, yields are expected to improve 3% in 2018.
The research firm has also predicted that the average net profit per departing passenger would be $8.90 per passenger in 2018 compared with $8.45 in 2017. The firm projects that jet fuel prices are likely to escalate around 12.5% to $73.8 per barrel next year. Fuel bill is likely to account for 20.5% of total costs in 2018 (18.8% in 2017).
However, labor costs are likely to be higher. They are expected to account for 30.9% of total expenses in 2018. Total unit costs in 2018 are expected to grow 4.3% (much higher than the 1.7% increase in 2017). Unit revenue growth for 2018 is projected at 3.5%.
5. According to A4A, the winter holiday season is expected to be a busy one for U.S. carriers. Moreover, the organization expects 51 million passengers to opt for air travel during the period, reflecting a 3.5% increase from the 2016 figure. The forecast reflects an increase of 80,000 passengers per day from the comparable figure last year. Passenger volumes (on a daily basis) is projected to be in the range of 2 million to 2.7 million.
Notably, the busiest days for the holiday period are expected to be Dec 21, Dec 22 and Dec 26 while the lightest travel days are projected to be Dec 16, Christmas Eve, Christmas Day and New Year's Eve. To meet the surge in travel demand, U.S. carriers are increasing the number of available seats by 91,000 per day. The bullish forecast was backed by an improving domestic economy and affordable air fares.
6. Spirit Airlines has announced the addition of 11 new routes, starting next spring. The carrier's move is a prudent one as it is likely to boost traffic on the new routes, thereby driving the top line. (Read more: Spirit Airlines to Offer More Flights for Spring Travel ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free .
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report
Hawaiian Holdings, Inc. (HA): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Stocks recently featured in the blog include American Airlines GroupAAL , Delta Air LinesDAL , Hawaiian HoldingsHA and Spirit AirlinesSAVE Today, Zacks is promoting its ''Buy'' stock recommendations. Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: AAL, DAL, HA and More Last week the pilot fiasco at American Airlines Group was the most eye-catching event in the airline space. Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report Hawaiian Holdings, Inc. (HA): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here.
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Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: AAL, DAL, HA and More Last week the pilot fiasco at American Airlines Group was the most eye-catching event in the airline space. Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report Hawaiian Holdings, Inc. (HA): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks recently featured in the blog include American Airlines GroupAAL , Delta Air LinesDAL , Hawaiian HoldingsHA and Spirit AirlinesSAVE Today, Zacks is promoting its ''Buy'' stock recommendations.
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Stocks recently featured in the blog include American Airlines GroupAAL , Delta Air LinesDAL , Hawaiian HoldingsHA and Spirit AirlinesSAVE Today, Zacks is promoting its ''Buy'' stock recommendations. Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report Hawaiian Holdings, Inc. (HA): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: AAL, DAL, HA and More Last week the pilot fiasco at American Airlines Group was the most eye-catching event in the airline space.
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Stocks recently featured in the blog include American Airlines GroupAAL , Delta Air LinesDAL , Hawaiian HoldingsHA and Spirit AirlinesSAVE Today, Zacks is promoting its ''Buy'' stock recommendations. Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: AAL, DAL, HA and More Last week the pilot fiasco at American Airlines Group was the most eye-catching event in the airline space. Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report Hawaiian Holdings, Inc. (HA): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here.
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7250.0
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2017-12-05 00:00:00 UTC
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American Airlines Writes Another Check to Solve Another Problem
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AAL
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https://www.nasdaq.com/articles/american-airlines-writes-another-check-solve-another-problem-2017-12-05
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nan
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nan
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Last week, American Airlines (NASDAQ: AAL) and its pilots union revealed that as many as 15,000 December flights didn't have a full crew of pilots assigned. This raised the specter of a reputation-busting surge in flight cancellations later this month.
Fortunately for its customers, American Airlines has reached an agreement with its pilots union that will keep its holiday flights in late December fully staffed. Unfortunately, the carrier had to pay a steep price to correct its error. This will extend its unseemly trend of rapid cost inflation .
American Airlines resolves its crew shortage issue
Airline crew scheduling procedures are extremely complex, particularly for large carriers. Pilots and flight attendants can put in detailed preferences for when and where they want to fly. Airlines have computer systems that reconcile those preferences with staffing needs, ensuring that every flight is fully staffed and that there are adequate reserve crews to account for potential delays, cancellations, illness, etc. More senior pilots and flight attendants have priority in terms of getting the schedules they want.
American Airlines' holiday staffing shortage was initially attributed to a computer glitch, but the company now says that a clerical error was the cause. The carrier mislabeled tens of thousands of late-December flights in an app that its pilots can use to customize their schedules. This allowed pilots to drop undesirable flights from their schedules in the second half of December.
Initially, American Airlines offered to pay pilots 150% of their normal hourly wage for picking up open flights. It also planned to draw from its reserve pool to crew certain flights. However, the union cried foul over not having been consulted in the crafting of this solution. Additionally, the use of reserve pilots to fill in on flights without a full crew would have made it extremely difficult for American Airlines to recover in the event of bad weather.
Ultimately, it didn't take long for the airline and the union to reach an amicable agreement. American Airlines will offer its pilots double pay to pick up open flights during the second half of this month.
Paying up to fix problems is nothing new
It's good that American Airlines won't have to cancel lots of flights during the holiday season. This would have caused long-term damage to its reputation. On the other hand, it's not good that the company keeps spending freely to fix problems.
For example, American Airlines hired 1,900 extra employees two years ago to beef up staffing during the height of its merger integration process. The integration itself went smoothly, but the increase in head count and payroll never went away. More recently, American Airlines handed out big raises to its pilots and flight attendants to quell resentment among those employees, even though both work groups were under contract through 2019.
Viewed separately, all of these moves seem reasonable. However, in combination they have caused unit costs to spike higher since 2015, undermining American Airlines' profitability.
Margin deterioration continues
Through the first three quarters of 2017, American Airlines' pre-tax margin declined to 9.8% from 14.1% in the prior-year period. The company's margin decline will continue this quarter. Its official guidance calls for an adjusted pre-tax margin of 4.5%-6.5%, down from 7.9% in Q4 2016. That forecast may still be too ambitious because of a recent spike in jet fuel prices and the cost associated with offering double pay to pilots on certain holiday flights.
American Airlines expects non-fuel unit cost growth to slow dramatically after 2017. However, given how much unit costs have spiked in the past few years, that isn't very impressive. Furthermore, based on the recent price of jet fuel, American could face a 3-percentage-point margin headwind in 2018 just from higher fuel costs.
As a result, American Airlines will be hard pressed to get its profit margin moving in the right direction again in 2018. Perhaps 2019 will be the year that American's margin finally recovers. But based on the company's track record, it's possible that some other unforeseen problem will lead to additional cost inflation then.
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Adam Levine-Weinberg has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Last week, American Airlines (NASDAQ: AAL) and its pilots union revealed that as many as 15,000 December flights didn't have a full crew of pilots assigned. Fortunately for its customers, American Airlines has reached an agreement with its pilots union that will keep its holiday flights in late December fully staffed. Additionally, the use of reserve pilots to fill in on flights without a full crew would have made it extremely difficult for American Airlines to recover in the event of bad weather.
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Last week, American Airlines (NASDAQ: AAL) and its pilots union revealed that as many as 15,000 December flights didn't have a full crew of pilots assigned. American Airlines will offer its pilots double pay to pick up open flights during the second half of this month. However, in combination they have caused unit costs to spike higher since 2015, undermining American Airlines' profitability.
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Last week, American Airlines (NASDAQ: AAL) and its pilots union revealed that as many as 15,000 December flights didn't have a full crew of pilots assigned. Fortunately for its customers, American Airlines has reached an agreement with its pilots union that will keep its holiday flights in late December fully staffed. American Airlines will offer its pilots double pay to pick up open flights during the second half of this month.
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Last week, American Airlines (NASDAQ: AAL) and its pilots union revealed that as many as 15,000 December flights didn't have a full crew of pilots assigned. Fortunately for its customers, American Airlines has reached an agreement with its pilots union that will keep its holiday flights in late December fully staffed. However, in combination they have caused unit costs to spike higher since 2015, undermining American Airlines' profitability.
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7251.0
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2017-12-04 00:00:00 UTC
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Here's Why Delta Air Lines Stock Is Near A Buy Point
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AAL
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https://www.nasdaq.com/articles/heres-why-delta-air-lines-stock-near-buy-point-2017-12-04
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Shares of Delta Air Lines ( DAL ) popped on Monday, closing in on a buy point after the carrier reported strong results for the month of November.
[ibd-display-video id=3002382 width=50 float=left autostart=true] Passenger traffic rose 3.5% during the month, outpacing a flight capacity increase of 2.9%. Load factor, a measure of seats filled, rose 0.4 percentage points to 85.4%.
Delta said that it set a "new No. 1 system and domestic revenue day during the Thanksgiving holiday travel period" on Sunday, Nov. 26, and that it had no cancellations during the holiday period, which it characterized as lasting from Wednesday through Sunday.
Shares of Delta 1.6% to 52.91 in the stock market today , making their way through a cup-with-handle base with a potential buy point of 54.16. Delta hit 54.13 intraday.
American Airlines ( AAL ) advanced 1.9% to 49.93, heading for its own cup-with-handle entry of 53.84. United Airlines ( UAL ) added 2 cents to 62.59, off session highs of 64.33. Southwest ( LUV ) popped 3.5% to 62.03, still in buy range after breaking out from a 55.99 flat-base buy point last week.
IBD'S TAKE: As an investor, you may wonderwhy buy points are important. The chart action of thesetop stocksoffers an answer.
During November, Delta also got the OK from the U.S. Department of Transportation for its joint venture with Korean Air, a move that will strengthen its alliances in the increasingly competitive trans-Pacific market.
RELATED:
United, American, Delta Rule Air Travel, But Higher Costs Loom
These Low-Cost Airlines Are Getting Hundreds Of New Passenger Jets
Airline Industry News And Stocks To Watch
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines ( AAL ) advanced 1.9% to 49.93, heading for its own cup-with-handle entry of 53.84. Shares of Delta Air Lines ( DAL ) popped on Monday, closing in on a buy point after the carrier reported strong results for the month of November. During November, Delta also got the OK from the U.S. Department of Transportation for its joint venture with Korean Air, a move that will strengthen its alliances in the increasingly competitive trans-Pacific market.
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American Airlines ( AAL ) advanced 1.9% to 49.93, heading for its own cup-with-handle entry of 53.84. 1 system and domestic revenue day during the Thanksgiving holiday travel period" on Sunday, Nov. 26, and that it had no cancellations during the holiday period, which it characterized as lasting from Wednesday through Sunday. United, American, Delta Rule Air Travel, But Higher Costs Loom These Low-Cost Airlines Are Getting Hundreds Of New Passenger Jets Airline Industry News And Stocks To Watch The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines ( AAL ) advanced 1.9% to 49.93, heading for its own cup-with-handle entry of 53.84. Shares of Delta Air Lines ( DAL ) popped on Monday, closing in on a buy point after the carrier reported strong results for the month of November. Shares of Delta 1.6% to 52.91 in the stock market today , making their way through a cup-with-handle base with a potential buy point of 54.16.
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American Airlines ( AAL ) advanced 1.9% to 49.93, heading for its own cup-with-handle entry of 53.84. Shares of Delta Air Lines ( DAL ) popped on Monday, closing in on a buy point after the carrier reported strong results for the month of November. Southwest ( LUV ) popped 3.5% to 62.03, still in buy range after breaking out from a 55.99 flat-base buy point last week.
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7252.0
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2017-12-01 00:00:00 UTC
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United, American, Delta Rule Air Travel, But Higher Costs Loom
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AAL
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https://www.nasdaq.com/articles/united-american-delta-rule-air-travel-higher-costs-loom-2017-12-01
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A price war that threatens to upend the airline industry likely began this spring, after thousands of Spirit Airlines ( SAVE ) passengers in May learned their flights were canceled. The low-cost airline blamed pilots, who were entangled in a pay dispute, for engaging in a "pervasive illegal work slowdown" - an account the pilots disputed.
[ibd-display-video id=2102289 width=50 float=left autostart=true] Customers were furious, and a fight broke out at a Spirit counter in Fort Lauderdale, Fla. People were arrested. After passengers booked elsewhere, Spirit cut fares to try to lure them back. As it scrambled to contain the damage, United Airlines ( UAL ) swooped in, matching some of Spirit's prices in several of the legacy carrier's biggest, most prized airport hubs.
United, American Airlines ( AAL ) and Delta Air Lines ( DAL ) in years past might not have always seen no-frills, bargain-hunting customers as their own. But flush with cash, they now look to tighten their grip on the skies above the U.S. and drive out ultra-low-cost challengers, potentially limiting competition further in an industry that has already seen dramatic consolidation.
The shift has prompted analysts to question if passengers have any reason left to fly airlines like Spirit if the legacy network airlines are copying their strategy - either with bare-bones, high-restriction "basic economy" seats or fares that cost as little as dinner and a drink or two.
"I don't know that the basic fact has changed: that low costs tend to win in the airline industry," said Seth Kaplan, managing partner at Airline Weekly. "But this is maybe the most interesting moment in history to test that, now that the big three airlines are so successful and now that they have such good balance sheets."
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Following 40 bankruptcy-riddled years, the airline industry has consolidated into four airlines that control about 80% of the U.S. market: United, American, Delta and Southwest ( LUV ). Such market sway has helped improve earnings, and the big airlines have vowed not to let ultra-low-cost carriers (ULCCs) beat them on price.
The carriers' path to greater market dominance will be tested in the year ahead. Costs are rising for everything from employee pay to fuel prices to the landing fees that will fund airports' efforts to add parking and transportation and renovate terminals to look more sleek or at least less depressing.
The higher expenses to run an airline will threaten profits and the willingness to match bargain fares of the ultra-low-cost carriers, who face some of the same cost pressures.
"If your costs are going up, it's not sustainable that you keep lowering your fares," Cowen analyst Helane Becker said of United's discounting onslaught, adding: "I don't know that I would say (United) would back off first. I would just say that you will see fares trend higher in general."
Ultra-Low-Cost Carriers' Model Doubted
In years past, the U.S. legacy carriers and the discounters viewed the passengers they pursued as existing in more clearly separated markets, Kaplan says. An airline like Spirit saw itself attracting a more price-sensitive bunch who might otherwise spend their money on, say, going to the movies rather than another airline, he says.
Ultra-low-cost carriers generally operate with lower structural costs than their larger rivals do, meaning they can offer super-low fares more easily. Spirit tends to skimp more on seat space, allowing the carrier to cram in more seats and spread costs across more passengers. ULCCs also tend to fly point to point, without guaranteed connections, cutting down on the time - and money - spent on the ground waiting for connecting passengers.
As the big three carriers rolled out basic economy, their vast networks offered an advantage on connections, even if the fare class didn't guarantee that, say, a family of four can sit together.
With Spirit, you can still sit together. But when United tried to match ULCCs on fares last summer, Spirit had to back off from plans to raise fares to stay competitive with the giants. Spirit stock tanked 18% in a single day in July.
"Clearly, the ULCC model is being questioned by the Street," Wolfe Research analyst Hunter Keay wrote in a research note following that dive.
Shares of the network carriers weren't faring much better. When a bigger, higher-expense rival like United tries to emulate Spirit, United either loses more money than Spirit or makes less money.
Point To Point vs. Hub And Spoke
In particular, plans by low-cost Frontier Airlines to push into Denver were seen by United as a shift away from its point-to-point model and toward a more costly and complex hub-and-spoke model. In hub and spoke, passengers are routed to big airports and then put on connecting flights.
"I've believed for many years that the ultra-low-cost-carrier business model can't work when a network carrier decides to compete on price," United President Scott Kirby said in July. "This is the first public validation that one of the ULCCs has thrown in the towel on the point-to-point business model."
Frontier denied it was changing the way it flies. But ULCCs face tough questions about their future .
Asked at a conference in September whether ULCCs were doomed when a major carrier cuts prices, Spirit CFO Ted Christie replied "absolutely not." He said "rumors of the death of the ULCC model are clearly overstated" and that people like low fares.
Airline Industry Costs
New concerns over industry costs have since recast the debate. In October, United management unnerved investors by making cagey responses to questions about the airline's 2018 outlook.
The carrier said that health care costs, pensions and airport fees were rising. But it offered no specifics, saying only that it was "in the middle" of mapping out 2018 costs and taking a "very different approach" to them.
The remarks signaled that expectations set last year may be softening. Those targets included keeping nonfuel unit cost growth under 1%, producing $4.8 billion in "earnings improvement" by 2020, and lopping roughly $1 billion off the carrier's capital expenditures this year.
Worries grew about United's ability to catch up with Delta on margins. Investors laid into United's stock, sinking it 12% in one day.
"Making it worse was poor commentary on the (third-quarter earnings) call where UAL wouldn't address, even qualitatively, 2018 (unit costs)," Wolfe Research's Keay said in a research note. "In fact, we felt warned on it."
Airline Labor Expenses
A week later, Alaska Air Group (ALK) shares tanked as Wall Street worried over its ability to manage costs as it brings Virgin America under its wing. Concerns included its efforts to resolve a pilot shortage with higher pay amid rising competition.
Then American got hit. Shares tumbled after it forecast greater capacity growth and higher-than-expected costs in 2018, with pay raises, benefit hikes and increased maintenance costs weighing.
Southwest forecast higher-than-expected costs in the fourth quarter due to ad spending, tech expenses and costs related to getting the OK to fly to Hawaii.
The prevalence of cost fears distracted Wall Street from the only industry statistic it generally cares about: unit revenue, which tries to gauge an airline's efficiency by measuring sales in relation to an airline's available supply of seats and flights. That metric, actually, has been OK.
The market had a "sobering recollection that airlines also have cost structures," JPMorgan analyst Jamie Baker observed wryly in a research note. He pointed out that management isn't typically ready to talk about unit costs and capacity for the year ahead in October. But he said "we still wish that most had been better prepared."
Now it was Spirit's turn to gloat.
"Consolidation didn't really improve the cost structure" of legacy airlines, Spirit CEO Bob Fornaro said in October. "It improved the networks, but the costs are going higher."
ULCCs' Challenges
Spirit hasn't been spared these cost concerns. Costs are certain to rise if management can strike a deal with its employees. The big three airlines all agreed to pay hikes for employees last year.
But some ULCCs have support in high places, and are getting new planes that will enable them to compete even harder.
Investor Bill Franke, whose Indigo Partners owns Frontier and other ULCCs, agreed on Nov. 15 to buy 430 new Airbus (EADSY) jets for his carriers, including Frontier, in a deal valued at $49.5 billion at list prices.
Frontier will get 100 A320neo jets and 34 A321neos. The narrow-body planes are increasingly popular with airlines, as their range and fuel efficiency have opened more direct routes that previously weren't economical.
At a press conference after the pact was announced, Franke, who helped transform Spirit into a ULCC, argued that adding loyalty programs, amenities and other things that raise an airline's costs opens up "a path to hell," according to Bloomberg.
"We're firm believers in the ultra-low-cost model," Franke told reporters at the Dubai Airshow, where the order - Airbus' largest ever - was announced. "At the end of the day, in a competitive environment, the lower the cost, the lower the fares, is a winning strategy."
But the big airlines also appear to be firm believers in offering passengers a low-fare option, and American Airlines CEO Doug Parker sees an endgame on the horizon. He said in October that the industry was in the "final stages of a maturation process," in which ULCCs, seeking new markets, run into trouble moving into the nation's big airport hubs.
RELATED :
New Flights Signal Spirit Airlines Is Still Taking Fight To United, Rivals
American Signals Higher '18 Capacity; Another Carrier Warns On Costs
Airline Stocks To Watch And Industry News
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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United, American Airlines ( AAL ) and Delta Air Lines ( DAL ) in years past might not have always seen no-frills, bargain-hunting customers as their own. Costs are rising for everything from employee pay to fuel prices to the landing fees that will fund airports' efforts to add parking and transportation and renovate terminals to look more sleek or at least less depressing. Airline Labor Expenses A week later, Alaska Air Group (ALK) shares tanked as Wall Street worried over its ability to manage costs as it brings Virgin America under its wing.
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United, American Airlines ( AAL ) and Delta Air Lines ( DAL ) in years past might not have always seen no-frills, bargain-hunting customers as their own. "I don't know that the basic fact has changed: that low costs tend to win in the airline industry," said Seth Kaplan, managing partner at Airline Weekly. Shares tumbled after it forecast greater capacity growth and higher-than-expected costs in 2018, with pay raises, benefit hikes and increased maintenance costs weighing.
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United, American Airlines ( AAL ) and Delta Air Lines ( DAL ) in years past might not have always seen no-frills, bargain-hunting customers as their own. The shift has prompted analysts to question if passengers have any reason left to fly airlines like Spirit if the legacy network airlines are copying their strategy - either with bare-bones, high-restriction "basic economy" seats or fares that cost as little as dinner and a drink or two. "I don't know that the basic fact has changed: that low costs tend to win in the airline industry," said Seth Kaplan, managing partner at Airline Weekly.
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United, American Airlines ( AAL ) and Delta Air Lines ( DAL ) in years past might not have always seen no-frills, bargain-hunting customers as their own. Following 40 bankruptcy-riddled years, the airline industry has consolidated into four airlines that control about 80% of the U.S. market: United, American, Delta and Southwest ( LUV ). Shares of the network carriers weren't faring much better.
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7253.0
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2017-11-29 00:00:00 UTC
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1 Reason I Won't Touch American Airlines Stock
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AAL
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https://www.nasdaq.com/articles/1-reason-i-wont-touch-american-airlines-stock-2017-11-29
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nan
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American Airlines (NASDAQ: AAL) has a very confident management team. CEO Doug Parker and President Robert Isom routinely tell investors that the whole airline industry has been radically transformed -- and that American will never again lose money. Parker even bet a hedge fund analyst a bottle of wine that American Airlines stock will hit $60 by next November.
However, this confidence is based on "faith" more than facts. Quite simply, management seems to be out of touch. That's a very good reason for investors to avoid American Airlines stock.
Playing the long game?
At American Airlines' investor day back in September, management talked a lot about playing the long game. This entails making significant investments in technology, aircraft upgrades, and ground facilities; paying employees best-in-class wages; and continuing to grow the carrier's route network to bolster its future competitiveness.
All of these plans seem entirely reasonable. Indeed, corporate CEOs should be focusing their energy on crafting a long-term strategy, rather than just trying to maximize short-term profits.
The problem in this case is that what American Airlines' management characterizes as short-term profitability issues may in fact be symptoms of deeper, long-term competitive challenges. If so, the company's strategy may not be appropriate to its circumstances.
A shaky record
One sign that American Airlines' management may not be on top of things is its poor forecasting track record. On American's Q3 2015 earnings call, Parker told analysts that industry profit margins might decline in 2016, due to fuel prices being roughly flat while unit revenue fell in response to the flood of capacity that entered the market during 2015. However, he predicted that margins would rebound in 2017 and eventually surpass 2015 levels.
Reality has been a lot different. American Airlines posted a strong adjusted pre-tax margin of 15.3% in 2015. Its average fuel price actually plunged by another $0.30/gallon in 2016, yet its adjusted pre-tax margin still slipped to 12.6%. Year to date, American's adjusted pre-tax margin has fallen by another 4.3 percentage points, putting it on track to end 2017 at 9% or less .
Parker has never really explained what went wrong with his forecast. As a result, it's hard to feel confident that his theory of how the airline industry has been "transformed" is accurate.
There's no reason for investors to trust management
One of the first slides from American's investor day presentation should have set off alarm bells for anyone who owns American Airlines stock. The slide described a "leap of faith" to believing that American Airlines and the industry as a whole "have been materially and permanently transformed."
This was effectively an admission that management doesn't have much evidence to support its view of the world. Investors are just expected to take it on faith. Yet there is no compelling reason anyone should put this kind of faith in American Airlines' current management team.
Leaving aside Parker's botched forecasts about American's likely 2016 and 2017 performance, the company's long-term earnings forecasts are troubling. American Airlines projects that its pre-tax profit will average $5 billion a year, with earnings as low as $3 billion in a bad year and as high as $7 billion in a great year.
However, American Airlines is on pace to end 2017 with a pre-tax profit of around $3.7 billion , and this could hardly be considered a bad year. Jet fuel prices are still well below historical averages, consumer confidence and business confidence are buoyant, and the economy has been growing nonstop for more than eight years. (To be fair, American identified specific initiatives at the investor day that could add billions of dollars to the bottom line going forward -- at least in theory.)
Additionally, the industry concentration that has boosted the legacy carriers' profitability may be a "long moment" rather than a permanent change. The top four U.S. carriers currently carry about 80% of domestic traffic. However, the smaller carriers that make up the other 20% of the industry are growing at a much faster rate.
For example, Frontier Airlines recently announced that it plans to triple in size over the next 10 years. Collectively, the smaller carriers will likely be at least twice as large as their current size a decade from now. That would boost their combined market share from around 20% today to roughly 30%. The increased competition will put pressure on the incumbents' margins.
Logic, the history of the airline industry, and recent trends all suggest that American Airlines' best days are probably behind it. For me to consider investing in American Airlines stock, management would need to back up its bullish outlook with facts, not faith.
10 stocks we like better than American Airlines Group
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and American Airlines Group wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of November 6, 2017
Adam Levine-Weinberg has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines (NASDAQ: AAL) has a very confident management team. CEO Doug Parker and President Robert Isom routinely tell investors that the whole airline industry has been radically transformed -- and that American will never again lose money. This entails making significant investments in technology, aircraft upgrades, and ground facilities; paying employees best-in-class wages; and continuing to grow the carrier's route network to bolster its future competitiveness.
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American Airlines (NASDAQ: AAL) has a very confident management team. At American Airlines' investor day back in September, management talked a lot about playing the long game. American Airlines projects that its pre-tax profit will average $5 billion a year, with earnings as low as $3 billion in a bad year and as high as $7 billion in a great year.
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American Airlines (NASDAQ: AAL) has a very confident management team. At American Airlines' investor day back in September, management talked a lot about playing the long game. There's no reason for investors to trust management One of the first slides from American's investor day presentation should have set off alarm bells for anyone who owns American Airlines stock.
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American Airlines (NASDAQ: AAL) has a very confident management team. At American Airlines' investor day back in September, management talked a lot about playing the long game. There's no reason for investors to trust management One of the first slides from American's investor day presentation should have set off alarm bells for anyone who owns American Airlines stock.
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7254.0
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2017-11-29 00:00:00 UTC
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American Airlines to Launch More Flights to Canada in 2018
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AAL
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https://www.nasdaq.com/articles/american-airlines-to-launch-more-flights-to-canada-in-2018-2017-11-29
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nan
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American Airlines Group Inc.AAL has announced addition of flights to Canada from its hub at Chicago O'Hare International Airport. The carrier will start service to Calgary International Airport and Vancouver International Airport from Chicago O'Hare.
Daily flights to Vancouver will begin from May 4, 2018, while the seasonal service to Calgary will commence from Jun 7, 2018.
Tickets for the new route will be on sale from Dec 4.
The carrier will also add flights from the U.S. East Coast to Eastern Canada and increase seasonal operations to popular destinations in Canada. We believe, this decision to expand its presence is prudent as it is likely to boost the carrier's top line by attracting significant traffic on the routes introduced.
The airline will be augmenting flight frequency during winters between Phoenix Sky Harbor International Airport and Edmonton International Airport. The flights will operate twice daily from Dec. 15, 2017 to Apr 2, 2018.
Starting Feb 15, 2018, the carrier will be offering additional service between New York LaGuardia ("LGA") and Toronto Pearson International Airport ("YYZ"). Whereas from May 4, 2018, the airline will be adding an extra trip from Ronald Reagan Washington National Airport ("DCA") to YYZ. The year-round LGA-YYZ service will be operational five times daily, while the year-round flights between DCA and YYZ will operate thrice daily.
Further, the carrier will be offering an additional service connecting Philadelphia International Airport ("PHL") with Ottawa International Airport. This year-round service will operate thrice daily.
Moreover, the existing service between PHL and Quebec City Jean Lesage International Airport has been extended till Nov 3, 2018.
American Airlines Group, Inc. Price
American Airlines Group, Inc. Price | American Airlines Group, Inc. Quote
Zacks Rank & Key Picks
American Airlines carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the airline space are Gol Linhas Aereas Inteligentes S.A. GOL , International Consolidated Airlines Group SA ICAGY and SkyWest, Inc. SKYW , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Shares of Gol Linhas, International Consolidated Airlines and SkyWest have surged more than 100%, 46% and 35%, respectively, in a year.
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American Airlines Group, Inc. (AAL): Free Stock Analysis Report
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Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines Group Inc.AAL has announced addition of flights to Canada from its hub at Chicago O'Hare International Airport. Click to get this free report Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report SkyWest, Inc. (SKYW): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report International Consolidated Airlines Group SA (ICAGY): Free Stock Analysis Report To read this article on Zacks.com click here. We believe, this decision to expand its presence is prudent as it is likely to boost the carrier's top line by attracting significant traffic on the routes introduced.
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Click to get this free report Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report SkyWest, Inc. (SKYW): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report International Consolidated Airlines Group SA (ICAGY): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc.AAL has announced addition of flights to Canada from its hub at Chicago O'Hare International Airport. American Airlines Group, Inc. Price American Airlines Group, Inc. Price | American Airlines Group, Inc. Quote Zacks Rank & Key Picks American Airlines carries a Zacks Rank #3 (Hold).
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Click to get this free report Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report SkyWest, Inc. (SKYW): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report International Consolidated Airlines Group SA (ICAGY): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc.AAL has announced addition of flights to Canada from its hub at Chicago O'Hare International Airport. American Airlines Group, Inc. Price American Airlines Group, Inc. Price | American Airlines Group, Inc. Quote Zacks Rank & Key Picks American Airlines carries a Zacks Rank #3 (Hold).
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American Airlines Group Inc.AAL has announced addition of flights to Canada from its hub at Chicago O'Hare International Airport. Click to get this free report Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report SkyWest, Inc. (SKYW): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report International Consolidated Airlines Group SA (ICAGY): Free Stock Analysis Report To read this article on Zacks.com click here. The year-round LGA-YYZ service will be operational five times daily, while the year-round flights between DCA and YYZ will operate thrice daily.
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7255.0
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2017-11-27 00:00:00 UTC
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United Continental Continues Its Small-City Expansion
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AAL
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https://www.nasdaq.com/articles/united-continental-continues-its-small-city-expansion-2017-11-27
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Since joining airline giant United Continental (NYSE: UAL) last year, company president Scott Kirby and CFO Andrew Levy have pushed a strategy of expanding in smaller cities. The first big batch of new routes associated with this strategy started up in June. Since then, management has made it clear that additional small-city routes would be coming next year.
Sure enough, United Continental announced a new set of routes to small cities last week. However, while its interest in small cities makes sense, United may have trouble competing with Delta Air Lines (NYSE: DAL) and American Airlines (NASDAQ: AAL) in some of these markets, due to its reliance on 50-seat jets.
The logic of smaller cities
Price competition from budget carriers has made American, Delta, and United more reliant on travel to and from small cities in recent years. Routes between big cities have been prime targets for low-cost carriers, driving down fares and making it harder for high-cost airlines to earn good profit margins.
By contrast, network carriers' key competitive advantage over low-cost carriers is that they fly to hundreds of cities across the globe and can connect travelers between all of these destinations. In many cases, the only options for flying to or from a small city are American Airlines, Delta Air Lines, and United Continental. As a result, the fares tend to be significantly higher, leading to stronger profit margins.
Earlier this year, United added four small cities to its route map: Champaign/Urbana, Illinois; Columbia, Missouri; Rochester, Minnesota; and Santa Rosa, California. The carrier is preparing for another wave of expansion in small cities in the first half of 2018.
The next round of expansion
Last Tuesday, United announced that it will launch 10 new routes to small cities next spring. In April, it will begin flying from Chicago to El Paso, Texas; from Chicago and Washington, D.C., to Wilmington, North Carolina; from Denver to Jacksonville, Florida; from Los Angeles to Redmond and Medford, Oregon; and from Newark, New Jersey (just outside New York City), to Elmira, New York. United will operate two daily flights on all of these routes, except for Denver-Jacksonville, which will be served once daily.
In June, United will add seasonal, once-daily flights from Chicago to Fresno, California, and from Los Angeles to Kalispell and Missoula, Montana.
For the most part, these new routes will connect existing United Airlines "spokes" to additional United hubs. However, this round of expansion will also add two more cities to United's route map: Elmira and Wilmington.
Some good moves here -- and some head-scratchers
Several of United Continental's new routes make sense. For example, the time is right to return to Elmira -- a city that the carrier pulled out of in 2016 -- because American Airlines recently exited that market and because United can now fly to its hub in Newark, just 175 miles away. Previously, slot constraints forced United to route its Elmira flights to Chicago, which is nearly 600 miles distant.
Seasonal flights from Chicago to Fresno (which is near Yosemite National Park) and from Los Angeles to Kalispell and Missoula (which are in the Rockies) should benefit from strong tourist demand in the summer. Meanwhile, Jacksonville and El Paso aren't exactly small cities -- multiple budget carriers serve each one -- but connecting them to Denver and Chicago, respectively, will allow United to offer significantly more connecting itineraries.
On the other hand, adding more year-round regional flights in Los Angeles seems like a mistake . United Airlines already flies to Medford and Redmond from San Francisco -- a city that is 250-300 miles closer and offers far more connecting opportunities. United will also face nonstop competition from American Airlines and Allegiant Travel on the Medford-Los Angeles route.
Finally, entering Wilmington with flights to two different hubs seems excessive, given the small size of the market.
50-seat jets could pose a challenge
The biggest problem with United's plan to grow in smaller cities is that it will serve most of its new routes with 50-seat jets. These planes have been falling out of favor for years because they are expensive to operate (on a per-seat basis) and uncomfortable for passengers.
By contrast, Delta Air Lines has significantly reduced its reliance on 50-seat jets by reaching a deal with its pilots to add 88 small (110-seat) mainline jets in exchange for the right to use more outsourced dual-class 70- to 76-seat regional jets. American Airlines also has more flexibility to use dual-class regional jets, which are significantly roomier and feature a full complement of first-class and extra-legroom seats as upgrade options for loyal customers.
As a result, in Wilmington, United Airlines will be competing with 50-seat regional jets against mainline and large regional jets used by American and Delta. People flying to or from Redmond and Medford also have ample access to larger aircraft.
In this context, the choice between United Airlines and either of its competitors will be obvious for most travelers -- and it won't be favorable for United. Thus, a better schedule won't fix United Continental's financial problems if it entails using vastly inferior airplanes.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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However, while its interest in small cities makes sense, United may have trouble competing with Delta Air Lines (NYSE: DAL) and American Airlines (NASDAQ: AAL) in some of these markets, due to its reliance on 50-seat jets. Since joining airline giant United Continental (NYSE: UAL) last year, company president Scott Kirby and CFO Andrew Levy have pushed a strategy of expanding in smaller cities. American Airlines also has more flexibility to use dual-class regional jets, which are significantly roomier and feature a full complement of first-class and extra-legroom seats as upgrade options for loyal customers.
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However, while its interest in small cities makes sense, United may have trouble competing with Delta Air Lines (NYSE: DAL) and American Airlines (NASDAQ: AAL) in some of these markets, due to its reliance on 50-seat jets. The logic of smaller cities Price competition from budget carriers has made American, Delta, and United more reliant on travel to and from small cities in recent years. Meanwhile, Jacksonville and El Paso aren't exactly small cities -- multiple budget carriers serve each one -- but connecting them to Denver and Chicago, respectively, will allow United to offer significantly more connecting itineraries.
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However, while its interest in small cities makes sense, United may have trouble competing with Delta Air Lines (NYSE: DAL) and American Airlines (NASDAQ: AAL) in some of these markets, due to its reliance on 50-seat jets. The logic of smaller cities Price competition from budget carriers has made American, Delta, and United more reliant on travel to and from small cities in recent years. In many cases, the only options for flying to or from a small city are American Airlines, Delta Air Lines, and United Continental.
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However, while its interest in small cities makes sense, United may have trouble competing with Delta Air Lines (NYSE: DAL) and American Airlines (NASDAQ: AAL) in some of these markets, due to its reliance on 50-seat jets. The logic of smaller cities Price competition from budget carriers has made American, Delta, and United more reliant on travel to and from small cities in recent years. In April, it will begin flying from Chicago to El Paso, Texas; from Chicago and Washington, D.C., to Wilmington, North Carolina; from Denver to Jacksonville, Florida; from Los Angeles to Redmond and Medford, Oregon; and from Newark, New Jersey (just outside New York City), to Elmira, New York.
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7256.0
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2017-11-22 00:00:00 UTC
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Flying This Holiday Season? Find Out Which Carriers Dominate Your Airport
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AAL
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https://www.nasdaq.com/articles/flying-holiday-season-find-out-which-carriers-dominate-your-airport-2017-11-22
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Airline hubs are specific airports that an airline company uses as a transfer sport to get travelers to their intended destination. This system is part of the spoke-hub transportation model, which has been favored by many airlines since the industry was deregulated in 1978. The model consists of a system of connections in which all airline traffic moves across spokes linked to the hub at the center.
For example, Denver and Los Angeles represent hubs, with many spokes reaching outward to other cities. The purpose of this model is simple: to save airlines money and to provide passengers better routes to their selected destinations. Today, most airlines have at least one main airport that their flights must travel through, and from there, the flights go outwards on different network spokes.
So which airlines dominate which airports? Let's take a look at seven major U.S. airlines, and see where their hubs are located.
American Airlines AAL
The world's largest airline by fleet size and revenue, American Airlines has been an industry staple since its formation in 1930. The company is headquartered in Fort Worth, Texas, and since its merger with US Airways in 2013, American Airlines operates nine domestic hubs:
Dallas-Fort Worth International Airport
Charlotte-Douglas International Airport
Chicago O'Hare International Airport
Philadelphia International Airport
Phoenix Sky Harbor International Airport
Miami International Airport
Ronald Reagan Washington International Airport
Los Angeles Airport
New York City's John F. Kennedy International Airport
Alaska Airlines ALK
Alaska Airlines is American airline founded back in 1932. Originally offering flights from Anchorage, Alaska, the airlines today has flights to more than 100 destinations including Alaska, Hawaii, Canada, Costa Rica, and Mexico. Alaska Airlines' fleet consists of mostly Boeing (BA) 737 aircraft, as well as Bombardier and Embraer planes. The company has three main hubs:
Seattle-Tacoma International Airport
Portland International Airport
Ted Stevens Anchorage International Airport
And two focus cities:
San Diego International Airport
San Jose International Airport
Delta Airlines DAL
Like American, Delta has been present in the U.S. airline industry for decades. It began carrying passengers in 1929, and has grown rapidly since then due to many airline mergers. Headquartered in Atlanta, Georgia, Delta operates 10 domestic hubs:
Hartsfield-Jackson Atlanta International Airport
Detroit Metropolitan Wayne County Airport
Cincinnati/Northern Kentucky International Airport
JFK International Airport
New York City's La Guardia Airport
Boston Logan International Airport
Los Angeles International Airport
Minneapolis-St. Paul International Airport
Salt Lake City International Airport
Seattle-Tacoma International Airport
And three international hubs:
Amsterdam Airport Schiphol
Tokyo Narita International Airport
Paris-Charles de Gaulle Airport
Frontier Airlines
Founded in 1994, Frontier Airlines is a popular, privately-held, ultra-low-cost carrier headquartered in Denver Colorado. It recently announced a huge route expansion, and Frontier is adding 21 new destinations and 85 new routes to its network. Additionally, Frontier is adding dozens of non-stop flights between other cities that it already serves. With this network increase, Frontier's route map will grow to 82 cities by next summer. The airline operates out of one main hub:
Denver International Airport
And seven focus cities:
Cincinnati/Northern Kentucky International Airport
Cleveland Hopkins International Airport
Hartsfield-Jackson Atlanta International Airport
Las Vegas' McCarran International Airport
Orlando International Airport
Philadelphia International Airport
Trenton-Mercer Airport
JetBlue Airways JBLU
JetBlue is a popular low-cost airline option headquartered in Long Island in New York City. It serves 97 destinations in the U.S., Mexico, the Caribbean, Central America, and South America. JetBlue was founded in 1998, and primarily uses Airbus and Embraer aircraft. JetBlue utilizes the old0fashioned point-to-point system , which carries passengers short distances with few connecting flights, the airline operates out of six domestic focus cities:
JFK International Airport
Fort Lauderdale-Hollywood International Airport
Boston Logan International Airport
Long Beach Airport
San Juan's Luis Munoz Marin International Airport
Orlando International Airport
Southwest Airlines LUV
Touted as the world's largest low-cost carrier, Southwest Airlines was launched in 1967 and is known for its Rapid Rewards frequent-flyer program. Its headquarters is in Dallas, Texas. While Southwest does not use the hub and spoke transportation model (it prefers the point-to-point system like JetBlue) the airline still operates out of 10 major domestic cities:
Chicago Midway International Airport
Baltimore-Washington International Airport
McCarran International Airport
Dallas Love Field Airport
Denver International Airport
Phoenix Sky Harbor International Airport
Houston's William P. Hobby Airport
Hartsfield-Jackson Atlanta International Airport
Orlando International Airport
Los Angeles International Airport
United Continental Holdings UAL
Headquartered in Chicago, United Continental Holdings is an airline holding company for United Airlines and Continental Airlines, which formed in a merger back in 2010. Operating more than 700 mainline aircraft, United Continental needs a lot of hubs. The airline company has nine hubs in total, eight domestic:
Chicago O'Hare International Airport
Houston's George Bush Intercontinental Airport
Denver International Airport
Los Angeles International Airport
Newark Liberty International Airport
San Francisco International Airport
Washington Dulles International Airport
Guam A.B. Wan Pat International Airport
And one international:
Tokyo Narita International Airport
As you can see, these seven major airlines overlap in their hub or major operating city locations nationwide, which can be looked at as a positive thing for frequent travelers. The hub and spoke model offers each airline (even Southwest and JetBlue) a way to replace a high number of half-empty routes with fewer, fuller ones, leading to less delays and a wide variety of connections.
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Southwest Airlines Company (LUV): Free Stock Analysis Report
JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Alaska Air Group, Inc. (ALK): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines AAL The world's largest airline by fleet size and revenue, American Airlines has been an industry staple since its formation in 1930. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. The model consists of a system of connections in which all airline traffic moves across spokes linked to the hub at the center.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines AAL The world's largest airline by fleet size and revenue, American Airlines has been an industry staple since its formation in 1930. The company is headquartered in Fort Worth, Texas, and since its merger with US Airways in 2013, American Airlines operates nine domestic hubs: Dallas-Fort Worth International Airport Charlotte-Douglas International Airport Chicago O'Hare International Airport Philadelphia International Airport Phoenix Sky Harbor International Airport Miami International Airport Ronald Reagan Washington International Airport Los Angeles Airport New York City's John F. Kennedy International Airport Alaska Airlines ALK Alaska Airlines is American airline founded back in 1932.
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American Airlines AAL The world's largest airline by fleet size and revenue, American Airlines has been an industry staple since its formation in 1930. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. The company is headquartered in Fort Worth, Texas, and since its merger with US Airways in 2013, American Airlines operates nine domestic hubs: Dallas-Fort Worth International Airport Charlotte-Douglas International Airport Chicago O'Hare International Airport Philadelphia International Airport Phoenix Sky Harbor International Airport Miami International Airport Ronald Reagan Washington International Airport Los Angeles Airport New York City's John F. Kennedy International Airport Alaska Airlines ALK Alaska Airlines is American airline founded back in 1932.
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American Airlines AAL The world's largest airline by fleet size and revenue, American Airlines has been an industry staple since its formation in 1930. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Today, most airlines have at least one main airport that their flights must travel through, and from there, the flights go outwards on different network spokes.
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7257.0
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2017-11-22 00:00:00 UTC
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AAL January 2018 Options Begin Trading
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AAL
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https://www.nasdaq.com/articles/aal-january-2018-options-begin-trading-2017-11-22
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Investors in American Airlines Group Inc (Symbol: AAL) saw new options become available today, for the January 2018 expiration. At Stock Options Channel , our YieldBoost formula has looked up and down the AAL options chain for the new January 2018 contracts and identified one put and one call contract of particular interest.
The put contract at the $48.00 strike price has a current bid of 10 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $48.00, but will also collect the premium, putting the cost basis of the shares at $47.90 (before broker commissions). To an investor already interested in purchasing shares of AAL, that could represent an attractive alternative to paying $48.71/share today.
Because the $48.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 58%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract . Should the contract expire worthless, the premium would represent a 0.21% return on the cash commitment, or 1.73% annualized - at Stock Options Channel we call this the YieldBoost .
Below is a chart showing the trailing twelve month trading history for American Airlines Group Inc, and highlighting in green where the $48.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $49.00 strike price has a current bid of 6 cents. If an investor was to purchase shares of AAL stock at the current price level of $48.71/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $49.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 0.72% if the stock gets called away at the January 2018 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if AAL shares really soar, which is why looking at the trailing twelve month trading history for American Airlines Group Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAL's trailing twelve month trading history, with the $49.00 strike highlighted in red:
Considering the fact that the $49.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 50%. On our website under the contract detail page for this contract , Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 0.12% boost of extra return to the investor, or 1.02% annualized, which we refer to as the YieldBoost .
The implied volatility in the put contract example is 31%, while the implied volatility in the call contract example is 30%. Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 253 trading day closing values as well as today's price of $48.71) to be 29%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the Nasdaq 100 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Of course, a lot of upside could potentially be left on the table if AAL shares really soar, which is why looking at the trailing twelve month trading history for American Airlines Group Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAL's trailing twelve month trading history, with the $49.00 strike highlighted in red: Considering the fact that the $49.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in American Airlines Group Inc (Symbol: AAL) saw new options become available today, for the January 2018 expiration.
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Below is a chart showing AAL's trailing twelve month trading history, with the $49.00 strike highlighted in red: Considering the fact that the $49.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in American Airlines Group Inc (Symbol: AAL) saw new options become available today, for the January 2018 expiration. At Stock Options Channel , our YieldBoost formula has looked up and down the AAL options chain for the new January 2018 contracts and identified one put and one call contract of particular interest.
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Below is a chart showing AAL's trailing twelve month trading history, with the $49.00 strike highlighted in red: Considering the fact that the $49.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in American Airlines Group Inc (Symbol: AAL) saw new options become available today, for the January 2018 expiration. At Stock Options Channel , our YieldBoost formula has looked up and down the AAL options chain for the new January 2018 contracts and identified one put and one call contract of particular interest.
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At Stock Options Channel , our YieldBoost formula has looked up and down the AAL options chain for the new January 2018 contracts and identified one put and one call contract of particular interest. Below is a chart showing AAL's trailing twelve month trading history, with the $49.00 strike highlighted in red: Considering the fact that the $49.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in American Airlines Group Inc (Symbol: AAL) saw new options become available today, for the January 2018 expiration.
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7258.0
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2017-11-22 00:00:00 UTC
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The Zacks Analyst Blog Highlights: United Continental Holdings, Allegiant Travel, American Airlines Group, Delta Air Lines and SkyWest
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AAL
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https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-united-continental-holdings-allegiant-travel-american
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For Immediate Release
Chicago, IL - November 22, 2017 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include United Continental HoldingsUAL , Allegiant Travel CompanyALGT , American Airlines GroupAAL , Delta Air LinesDAL and SkyWest Inc.SKYW .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Tuesday's Analyst Blog:
3 Dividend-Paying Airline Stocks to Consider
It is a well-known fact that companies in the airline space have been facing challenges due to multiple headwinds. Stocks in this space have been hurt by high costs (labor and fuel), disruptions caused by the recent hurricanes, capacity overexpansion, among others.
Evidently, United Continental Holdings' third-quarter pre-tax income was affected to the tune of approximately $185 million due to the storms. As a result, the company cancelled 8,300 flights in the same period.
Additionally, the massacre (described as the deadliest mass shooting in modern U.S. history) in Las Vegas on Oct 1, 2017, pushed back airline stocks, particularly those with exposure to Las Vegas' McCarran International Airport. For instance, bookings at Allegiant Travel Company for the fourth quarter have been hurt. The company now expects total revenue per available seat miles (TRASM) to decline between 0.5% and 3% mainly due to Irma and the Las Vegas mass shooting incident.
In view of the above struggles, it is of little surprise that the Zacks Airline industry has underperformed the broader market year to date. While the S&P 500 Index gained 15.6%, the industry rallied 11.4%.
Warren Buffett Still Rooting for Airlines - A Positive Sign
Despite the sector's recent struggles, Warren Buffett - one of the most revered investors of all time - still continues to support the airline stocks. According to a third-quarter filing by Berkshire Hathaway, Buffett still has stakes in American Airlines Group, Delta Air Lines and others. Initially Buffett had shown interest in the sector last year, after staying away from it for a long time. In fact, his last investment in airlines was in the 1980s.
Buffett's investing style has always remained simple: buy shares in great companies and hold them for a significant period of time. These companies have reliable business models that have stood the test of time.
As one of the greatest investors ever is still showing faith in airlines despite the recent turbulence, it is obvious that airline companies fit into his scheme of long-term sustainability. Therefore, it can be safely concluded that all is not lost for the sector and one should remain focused on them.
Dividend-Paying Stocks to the Rescue
Companies with strong fundamentals are generally payers of dividends. Such companies are financially stable and mature and can even generate steady cash flow irrespective of market and sector conditions.
In fact, dividend stocks are a safe bet to create wealth as the payouts generally act as a hedge against uncertainty and simultaneously provide downside protection by offering sizable yields on a regular basis.
Three Airline Stocks in Focus
In view of the virtues associated with dividend paying companies, we have zeroed in on three airline stocks, which have a strong dividend paying history. Also, they have raised their dividend payouts in the last 12 months.
Delta Air Lines is a leading provider of scheduled air transportation for passengers and cargo in the United States and around the world. The company, based in Atlanta, GA, currently carries a Zacks Rank #3 (Hold) and has a Value Score of A. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
The company has a dividend yield of 2.45%. Also, Delta has been consistently rewarding its shareholders through dividends since 2013. Notably, it has hiked dividend pay-outs significantly for four consecutive years since then. The latest hike was announced in May 2017, when the company's board of directors approved a 50.6% dividend hike in its quarterly cash dividend to 30.5 cents per share.
Southwest Airlines with a Zacks Rank #3, is based in Dallas, TX. In May 2017, this low-cost carrier raised its cash quarterly dividend to 12.5 cents per share, reflecting an increase of 25% over the previous quarterly payout of 10 cents per share. The company has a dividend yield of 0.91%. Moreover, its past records substantiate the fact that Southwest Airlines has a stable dividend payment history. The company with a Value Score of B, has made dividend payments for more than 160 consecutive quarters.
SkyWest Inc. operates a regional airline in the United States through its subsidiaries. The company has a Zacks Rank #2 (Buy) and a Value Score of B. The carrier, with a dividend yield of 0.64%, has paid dividends for more than 80 quarters in succession. In February 2017, the company's board of directors approved a 60% dividend hike in its quarterly cash dividend to 8 cents per share.
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About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
SkyWest, Inc. (SKYW): Free Stock Analysis Report
Allegiant Travel Company (ALGT): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Stocks recently featured in the blog include United Continental HoldingsUAL , Allegiant Travel CompanyALGT , American Airlines GroupAAL , Delta Air LinesDAL and SkyWest Inc.SKYW . Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report SkyWest, Inc. (SKYW): Free Stock Analysis Report Allegiant Travel Company (ALGT): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. In fact, dividend stocks are a safe bet to create wealth as the payouts generally act as a hedge against uncertainty and simultaneously provide downside protection by offering sizable yields on a regular basis.
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Stocks recently featured in the blog include United Continental HoldingsUAL , Allegiant Travel CompanyALGT , American Airlines GroupAAL , Delta Air LinesDAL and SkyWest Inc.SKYW . Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report SkyWest, Inc. (SKYW): Free Stock Analysis Report Allegiant Travel Company (ALGT): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The latest hike was announced in May 2017, when the company's board of directors approved a 50.6% dividend hike in its quarterly cash dividend to 30.5 cents per share.
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Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report SkyWest, Inc. (SKYW): Free Stock Analysis Report Allegiant Travel Company (ALGT): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks recently featured in the blog include United Continental HoldingsUAL , Allegiant Travel CompanyALGT , American Airlines GroupAAL , Delta Air LinesDAL and SkyWest Inc.SKYW . Three Airline Stocks in Focus In view of the virtues associated with dividend paying companies, we have zeroed in on three airline stocks, which have a strong dividend paying history.
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Stocks recently featured in the blog include United Continental HoldingsUAL , Allegiant Travel CompanyALGT , American Airlines GroupAAL , Delta Air LinesDAL and SkyWest Inc.SKYW . Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report SkyWest, Inc. (SKYW): Free Stock Analysis Report Allegiant Travel Company (ALGT): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. In fact, his last investment in airlines was in the 1980s.
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7259.0
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2017-11-22 00:00:00 UTC
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Southwest Airlines Co Stock Poised to Gain New Heights
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AAL
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https://www.nasdaq.com/articles/southwest-airlines-co-stock-poised-gain-new-heights-2017-11-22
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Southwest Airlines Co (NYSE: LUV ) has mastered one task that's unusual for an airline carrier - sustained profitability. The Dallas-based company again beat expectations in its latest earnings report. LUV stock is on track to report its 45th consecutive year of profitability.
Source: Jerry Landers via Flickr (Modified)
The 10 Best ETFs to Buy for Yield-Starved Investors
However, revenue troubles have plagued the airline this year and it also has underperformed upstart carriers JetBlue Airways Corporation (NASDAQ: JBLU ) and Spirit Airlines Incorporated (NASDAQ: SAVE ) in some respects. Still, its business model should keep LUV on track for sustained revenue, profit, and traffic growth.
LUV Stock Remains the Most Solid in the Industry
LUV stock's consistent record of profits makes it unique among its peers. In an industry where legacy carriers such as American Airlines Group Inc (NASDAQ: AAL ), Delta Air Lines, Inc. (NYSE: DAL ) and United Continental Holdings Inc (NYSE: UAL ) have struggled with highly-publicized passenger complaints and periodic bankruptcies, Southwest stands out as a solid performer.
With rare exceptions, Southwest has almost always reported quarterly profits since soon after its founding 46 years ago. Its costs remain low, and it provides customer satisfaction in many areas where legacy carriers have not. Southwest is one of the few airlines that allows flight changes without fees. It also avoided the trend of charging for checked bags.
Growth Has Been Slowed by Expected and Unexpected Costs
The LUV stock price has experienced a mediocre year after the company reported revenue would grow 1-2% this year. This figure stands well below 5-year average revenue growth of over 5.4%. This also places the company's revenue growth below that of JetBlue and Spirit. Like all airlines, LUV struggled as an unusually active hurricane season disrupted flight schedules.
Also, LUV has started retiring 737-300 aircraft in favor of the 737 MAX 8 . The move will give Southwest more fuel-efficient, longer-range aircraft, while still maintaining the simplicity of operating only Boeing 737 aircraft. Exclusive reliance on 737s has made aircraft maintenance simpler and less costly - a trend that will continue.
This move will also add to costs in the near term. The company carries about $3.3 billion in combined long- and short-term debt. However, with a $32 billion market cap, financing these more efficient planes should not cause issues. Moreover, lower fuel costs will help the bottom line. Longer ranges also make more direct flight routes possible.
LUV Stock Should Continue Rising
Paying for the new planes has also been helped by the growth of LUV stock. Equity moved steadily downward from 2000 to 2012, but, since then, the LUV stock price has risen from below $9 per share to as high as $64 per share. With the recent revenue struggles, the stock has fallen into the mid-$50 per share range. However, it maintains a price-earnings ratio of just under 16. While that's high compared to industry peers, it remains below S&P 500 averages.
A likely catalyst in LUV's bull run has been dividend increases. After years of paying a negligible dividend, the company began annual dividend increases in 2012. The dividend now stands at 50 cents per share with a yield just over 0.75% - below the S&P 500 average, but much better than before.
Given this, now might be a good time to buy. In addition to the low PE, the worst hurricane season in 12 years has ended and abnormally high levels of snow have not manifested this winter. Hence, weather-related disruptions should return to normal levels.
LUV will also tap a new growth market. Southwest announced it will start flying to Hawaii in 2018. This will bring the airline into one of the few domestic markets it doesn't currently serve. In future years, this should open Southwest to the lucrative island-hopping market, where it can carry passengers across the state.
Concluding Thoughts
Despite service issues and the cost of upgrading its fleet, the trend in LUV stock of steady, consistent profit growth appears poised to continue. While its new fleet will be costly, LUV remains financially strong enough to carry the debt burden. Also, entering the Hawaii market will bring new growth, as well as opening markets in the future to other parts of the state.
5 Blue-Chip Stocks to Buy for December
Most of these moves mean added cost in the near term, but they should improve the bottom line in future years. Investors who want steady growth and consistent profits should onboard LUV stock and enjoy a long ride at cruising altitude.
As of this writing, Will Healy did not hold a position in any of the aforementioned stocks.
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The post Southwest Airlines Co Stock Poised to Gain New Heights appeared first on InvestorPlace .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In an industry where legacy carriers such as American Airlines Group Inc (NASDAQ: AAL ), Delta Air Lines, Inc. (NYSE: DAL ) and United Continental Holdings Inc (NYSE: UAL ) have struggled with highly-publicized passenger complaints and periodic bankruptcies, Southwest stands out as a solid performer. In addition to the low PE, the worst hurricane season in 12 years has ended and abnormally high levels of snow have not manifested this winter. Concluding Thoughts Despite service issues and the cost of upgrading its fleet, the trend in LUV stock of steady, consistent profit growth appears poised to continue.
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In an industry where legacy carriers such as American Airlines Group Inc (NASDAQ: AAL ), Delta Air Lines, Inc. (NYSE: DAL ) and United Continental Holdings Inc (NYSE: UAL ) have struggled with highly-publicized passenger complaints and periodic bankruptcies, Southwest stands out as a solid performer. LUV Stock Remains the Most Solid in the Industry LUV stock's consistent record of profits makes it unique among its peers. Like all airlines, LUV struggled as an unusually active hurricane season disrupted flight schedules.
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In an industry where legacy carriers such as American Airlines Group Inc (NASDAQ: AAL ), Delta Air Lines, Inc. (NYSE: DAL ) and United Continental Holdings Inc (NYSE: UAL ) have struggled with highly-publicized passenger complaints and periodic bankruptcies, Southwest stands out as a solid performer. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Southwest Airlines Co (NYSE: LUV ) has mastered one task that's unusual for an airline carrier - sustained profitability. LUV Stock Remains the Most Solid in the Industry LUV stock's consistent record of profits makes it unique among its peers.
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In an industry where legacy carriers such as American Airlines Group Inc (NASDAQ: AAL ), Delta Air Lines, Inc. (NYSE: DAL ) and United Continental Holdings Inc (NYSE: UAL ) have struggled with highly-publicized passenger complaints and periodic bankruptcies, Southwest stands out as a solid performer. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Southwest Airlines Co (NYSE: LUV ) has mastered one task that's unusual for an airline carrier - sustained profitability. Growth Has Been Slowed by Expected and Unexpected Costs The LUV stock price has experienced a mediocre year after the company reported revenue would grow 1-2% this year.
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7260.0
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2017-11-21 00:00:00 UTC
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Delta Air Lines Is Adding Lie-Flat Seats on More Domestic Flights
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AAL
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https://www.nasdaq.com/articles/delta-air-lines-adding-lie-flat-seats-more-domestic-flights-2017-11-21
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For more than a decade, many airlines have offered international-style service -- complete with flat-bed first class or business class seats -- on flights from New York to Los Angeles and San Francisco. Yet American Airlines (NASDAQ: AAL) , Delta Air Lines (NYSE: DAL) , and United Continental (NYSE: UAL) never bothered to roll out a similar premium experience to other longer domestic routes.
However, in the past few years, JetBlue Airways (NASDAQ: JBLU) has disrupted the market for transcontinental business class travel. Most notably, it began to expand its Mint premium service beyond the traditional New York-Los Angeles and New York-San Francisco routes last year.
On Monday, Delta Air Lines announced that it will introduce its "Delta One" premium cabin (which features lie-flat seats) on half a dozen additional domestic routes next spring. This is a sign that Delta is starting to take the threat from JetBlue very seriously.
JetBlue is coming for the legacy carriers' most valuable customers
In 2014, JetBlue launched its upscale Mint service on its flights from New York to Los Angeles and San Francisco. The company had relatively modest expectations, but hoped that the move to cater to business travelers and wealthier leisure travelers would make it more competitive with American, Delta, and United on those two key routes.
In the end, Mint was successful beyond management's wildest dreams. Demand for premium seats has been much higher than expected. This encouraged JetBlue to add more flights on the New York-Los Angeles and New York-San Francisco routes. The increase in schedule options has in turn boosted unit revenue in the back of the plane.
Based on this stunning success, it was almost a no-brainer for JetBlue to introduce Mint service in its second-largest focus city, Boston. In 2016, it launched Mint on the Boston-San Francisco and Boston-Los Angeles routes. Earlier this year, JetBlue continued its Mint expansion, converting its Fort Lauderdale-Los Angeles and Fort Lauderdale-San Francisco routes to Mint service. The carrier is now bringing Mint to its routes from New York and Boston to San Diego, Las Vegas, and Seattle.
These new Mint routes may not be quite as popular with business travelers as the New York-Los Angeles and New York-San Francisco routes. Yet there is still plenty of premium demand. As JetBlue enters additional markets with the most luxurious product, it will be in position to steal more of the most lucrative airline customers from its larger rivals.
Delta is fighting back
Earlier this year, Delta Air Lines began flying between Boston and San Francisco as part of a broader expansion in Boston. Recognizing the need to keep up with JetBlue, Delta launched this route using a 757 equipped with lie-flat seats in the first class cabin. The carrier, however, is still using standard domestic aircraft in competition with Mint on many routes.
In 2018, Delta will expand its lie-flat seat offering to six additional domestic routes: Boston-Los Angeles, New York-San Diego, New York-Seattle, New York-Las Vegas, Atlanta-Honolulu, and Minneapolis-Honolulu. JetBlue operates Mint-equipped aircraft (or soon will) on all of these routes, except for the two Hawaii flights.
Delta doesn't plan to offer lie-flat seats on every single flight for the four routes where it is going head-to-head with JetBlue's Mint product. Instead, it will offer just one or two daily roundtrips with the international-style configuration, presumably focused on redeye flights. For the rest of its schedule, Delta believes that its existing domestic first class product is sufficient.
By expanding its domestic lie-flat seat offerings, Delta Air Lines will put pressure on United Airlines and American Airlines to follow suit. For example, back in June, United upgraded the business class section for its Boston-San Francisco flights to lie-flat seats just as Delta was entering the market.
JetBlue is setting the agenda
Delta's recent actions show that the legacy carriers can't afford to ignore JetBlue's moves in the premium travel space. The threat is real: JetBlue is offering a superior premium seating product at a lower price point, in many cases.
If history is a guide, JetBlue will start adding extra flights on its new Mint routes as soon as next year, and it could be ready to launch additional Mint routes by 2019. This would help JetBlue continue poaching deep-pocketed customers from American, Delta, and United.
Delta Air Lines is at least making an effort to hold on to its best customers. By contrast, it seems like the American Airlines and United Continental management teams may be asleep at the wheel. Both carriers have been aggressively matching budget carriers' fares in order to appeal to price-sensitive leisure travelers. But instead of competing for the least lucrative customers around, American and United should put more effort into retaining their best customers.
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Adam Levine-Weinberg owns shares of Delta Air Lines and JetBlue Airways and is long January 2019 $10 calls on JetBlue Airways. The Motley Fool recommends JetBlue Airways. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Yet American Airlines (NASDAQ: AAL) , Delta Air Lines (NYSE: DAL) , and United Continental (NYSE: UAL) never bothered to roll out a similar premium experience to other longer domestic routes. Most notably, it began to expand its Mint premium service beyond the traditional New York-Los Angeles and New York-San Francisco routes last year. In 2018, Delta will expand its lie-flat seat offering to six additional domestic routes: Boston-Los Angeles, New York-San Diego, New York-Seattle, New York-Las Vegas, Atlanta-Honolulu, and Minneapolis-Honolulu.
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Yet American Airlines (NASDAQ: AAL) , Delta Air Lines (NYSE: DAL) , and United Continental (NYSE: UAL) never bothered to roll out a similar premium experience to other longer domestic routes. Earlier this year, JetBlue continued its Mint expansion, converting its Fort Lauderdale-Los Angeles and Fort Lauderdale-San Francisco routes to Mint service. In 2018, Delta will expand its lie-flat seat offering to six additional domestic routes: Boston-Los Angeles, New York-San Diego, New York-Seattle, New York-Las Vegas, Atlanta-Honolulu, and Minneapolis-Honolulu.
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Yet American Airlines (NASDAQ: AAL) , Delta Air Lines (NYSE: DAL) , and United Continental (NYSE: UAL) never bothered to roll out a similar premium experience to other longer domestic routes. JetBlue is coming for the legacy carriers' most valuable customers In 2014, JetBlue launched its upscale Mint service on its flights from New York to Los Angeles and San Francisco. Delta doesn't plan to offer lie-flat seats on every single flight for the four routes where it is going head-to-head with JetBlue's Mint product.
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Yet American Airlines (NASDAQ: AAL) , Delta Air Lines (NYSE: DAL) , and United Continental (NYSE: UAL) never bothered to roll out a similar premium experience to other longer domestic routes. For more than a decade, many airlines have offered international-style service -- complete with flat-bed first class or business class seats -- on flights from New York to Los Angeles and San Francisco. Delta doesn't plan to offer lie-flat seats on every single flight for the four routes where it is going head-to-head with JetBlue's Mint product.
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7261.0
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2017-11-21 00:00:00 UTC
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Alaska Air Group Traffic Rises in October, Load Factor Dips
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AAL
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https://www.nasdaq.com/articles/alaska-air-group-traffic-rises-in-october-load-factor-dips-2017-11-21
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Alaska Air Group Inc.ALK recently reported traffic statistics for October. Traffic, measured in revenue passenger miles (RPMs), increased 11% to 4.37 billion.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 11.6% to 5.21 billion. However, load factor or percentage of seats filled by passengers contracted 40 basis points (bps) to 83.8% as capacity expansion outpaced traffic growth.
On a year-to-date basis, Alaska Air Group generated RPMs of 40.61 billion (up 7% year over year) and ASMs of 48.22 billion (up 6.6% year over year). Load factor stood at 84.5% compared with 84.2% in the first 10 months of 2016.
Alaska Air Group, Inc. Price
Alaska Air Group, Inc. Price | Alaska Air Group, Inc. Quote
Alaska Air Group has been making continuous efforts to expand its operations. Toward this end, the airline recently announced plans to start operating daily flights connecting Seattle with Pittsburgh. These nonstop flights are anticipated to be operational from Sep 6, 2018 and will be the first of its kind to connect the two popular destinations.
On the other hand, this Zacks Rank #5 (Strong Sell) company has announced its decision to stop Cuba operations. The carrier will operate its last Los Angeles-Havana flight on Jan 22, 2018. The tweaked Cuba policy announced by President Donald Trump earlier this month might have influenced Alaska Air Group's decision. Notably, the new policy prohibits individual travel to the island nation among other clauses. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Also, Cuba has ceased to be an attractive site for U.S.-based carriers due to lower-than-expected demand. The likes of American Airlines Group AAL and JetBlue Airways JBLU have already trimmed their services to the nation. Plus, Frontier Airlines and Spirit Airlines SAVE have terminated their flights to Cuba for the same reason.
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JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Alaska Air Group, Inc. (ALK): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The likes of American Airlines Group AAL and JetBlue Airways JBLU have already trimmed their services to the nation. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. However, load factor or percentage of seats filled by passengers contracted 40 basis points (bps) to 83.8% as capacity expansion outpaced traffic growth.
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Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. The likes of American Airlines Group AAL and JetBlue Airways JBLU have already trimmed their services to the nation. Alaska Air Group, Inc. Price Alaska Air Group, Inc. Price | Alaska Air Group, Inc. Quote Alaska Air Group has been making continuous efforts to expand its operations.
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Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. The likes of American Airlines Group AAL and JetBlue Airways JBLU have already trimmed their services to the nation. On a year-to-date basis, Alaska Air Group generated RPMs of 40.61 billion (up 7% year over year) and ASMs of 48.22 billion (up 6.6% year over year).
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Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. The likes of American Airlines Group AAL and JetBlue Airways JBLU have already trimmed their services to the nation. However, load factor or percentage of seats filled by passengers contracted 40 basis points (bps) to 83.8% as capacity expansion outpaced traffic growth.
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7262.0
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2017-11-21 00:00:00 UTC
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A Sumptuous Spread of ETFs & Stocks for Thanksgiving
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https://www.nasdaq.com/articles/sumptuous-spread-etfs-stocks-thanksgiving-2017-11-21
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The time has arrived to thankall good things in life. Like every year, most Americans warm up for their celebratory meals and vacations with family and friends on the fourth Thursday of November. Thanksgiving also marks the start of the one month-long holiday season.
This year too, savings on gas stations, an improving job market and still-contained inflation should lay a grand spread on the Thanksgiving table.
How Pricey Will Thanksgiving Meal be This Year?
The average cost of this year's Thanksgiving feast for 10 is $49.12 , down 75 cents from last year's average of $49.87, according to the American Farm Bureau Federation. The cost is the cheapest in five years. Even the main item of the event, the turkey, is coming at 2 cents less per pound. So, one can expect copious consumption of Turkey this year.
However, the U.S. Department of Labor's Consumer Price Index for food-at-home indicates a 0.5% rise in costs compared with the Farm Bureau's 1.5% decline. As per an article published on usatoday.com , "the discrepancy is likely a result of the Farm Bureau's emphasis on a select group of holiday fare."
Forget dine-at-home, dining outside should also be in the cards. Restaurants like Denny's DENN , Bob Evans BOBE , Cracker Barrel CBRL , DineEquity DIN , Maggiano's Little Italy of Brinker International Restaurants EAT , Rudy Tuesday RT and Ruth's Hospitality Group, Inc. RUTHwill be open on Turkey Day. Several of these restaurants offer fat deals on this occasion.
Apart from restaurants, stores like WalmartWMT and Target TGT will likely see increased footfall thanks to deals and offerings.
How About Thanking Travel & Hotel Demand?
According to travel service provider AAA, thanksgiving holiday travel is expected to hit levels not seen in 12 years . Auto travel is expected to increase 3.2% from last year while air travel will likely jump 5%. The auto club projects that about 89% will take long car trips while almost 8% will take to the skies (read: Will Airline ETF Crash on Subdued Q3 or Take Off on Value? ).
The average price of hotels rated by AAA as three-diamond jumped 14% a night, as indicated by auto club. However, the average rate for two-diamond hotels declined 5% to $117.
All in all, food and beverage as well as travel-related companies are eyeing huge profits this Thanksgiving, some sales and some realization driven. This is a key business-boosting occasion for these stocks and the related ETFs. Let's take a look at the stocks and ETFs that investors can stuff in their portfolio for some gains this Thanksgiving.
ETF & Stock Picks
F&B
PowerShares Dynamic Food & Beverage PortfolioPBJ
This product offers exposure to stocks that are engaged in the manufacture, sale or distribution of food and beverage products, agricultural products and products related to the development of new food technologies. PBJ charges 59 bps in fees.
Arcos Dorados Holdings Inc. ARCO
The company operates as a franchisee of McDonald's with its operations distributed in Brazil, North Latin America division, South Latin America and the Caribbean division. It has a Zacks Rank #2 (Buy) and a VGM (Value, Growth, Momentum) Score of A.
Agri-Business
VanEck Vectors Agribusiness ETF MOO
This fund gives investors exposure to the overall performance of the global agribusiness industry. The United States makes up over half of the basket. MOO charges 56 bps in fees.
Cosan Limited CZZ
This ethanol and sugar company has a Zacks Rank #2 and a VGM Score of A.
Auto
First Trust NASDAQ Global Auto Index FundCARZ
The fund is designed to track the performance of the largest and most-liquid companies engaged in manufacturing of automobiles. It charges 70 bps in fees (read: October Retail Sales Steady: 4 ETF & Stock Picks ).
AutoWeb Inc. AUTO
This Zacks Rank #2 provider of consumer leads and associated marketing services,primarily to automotive dealers and manufacturers, has a Zacks Rank #2 and a VGM Score of A.
Airlines
U.S. Global Jets ETFJETS
As per an article published on Reuters , "the busiest Thanksgiving travel period in more than a decade" could benefit airlines stocks and this ETF. It charges 60 bps in fees (read: 7 ETF Picks for November ).
American Airlines Group Inc. AAL
This Zacks Rank #3 (Hold) airlines company has a VGM Score of C, at the time of writing.
Leisure
PowerShares Dynamic Leisure and Entertainment Portfolio PEJ
The underlying index of the fund comprises stocks of U.S. leisure and entertainment companies. It charges 61 bps in fees.
Camping World Holdings Inc. CWH
This Zacks Rank #2 company is a provider of services, protection plans, products and resources for recreational vehicle enthusiasts. The stock has a VGM Score of A.
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American Airlines Group, Inc. (AAL): Free Stock Analysis Report
PACIFIC (EX: JA (PEJ): ETF Research Reports
PWRSH-DYN FD&BV (PBJ): ETF Research Reports
FT-NDQ GL AUTO (CARZ): ETF Research Reports
US GLOBAL JETS (JETS): ETF Research Reports
VANECK-AGRIBUS (MOO): ETF Research Reports
Camping World Holdings Inc. (CWH): Free Stock Analysis Report
Wal-Mart Stores, Inc. (WMT): Free Stock Analysis Report
Target Corporation (TGT): Free Stock Analysis Report
Cracker Barrel Old Country Store, Inc. (CBRL): Free Stock Analysis Report
Denny's Corporation (DENN): Free Stock Analysis Report
Bob Evans Farms, Inc. (BOBE): Free Stock Analysis Report
Ruth's Hospitality Group, Inc. (RUTH): Free Stock Analysis Report
DineEquity, Inc (DIN): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines Group Inc. AAL This Zacks Rank #3 (Hold) airlines company has a VGM Score of C, at the time of writing. Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report PACIFIC (EX: JA (PEJ): ETF Research Reports PWRSH-DYN FD&BV (PBJ): ETF Research Reports FT-NDQ GL AUTO (CARZ): ETF Research Reports US GLOBAL JETS (JETS): ETF Research Reports VANECK-AGRIBUS (MOO): ETF Research Reports Camping World Holdings Inc. (CWH): Free Stock Analysis Report Wal-Mart Stores, Inc. (WMT): Free Stock Analysis Report Target Corporation (TGT): Free Stock Analysis Report Cracker Barrel Old Country Store, Inc. (CBRL): Free Stock Analysis Report Denny's Corporation (DENN): Free Stock Analysis Report Bob Evans Farms, Inc. (BOBE): Free Stock Analysis Report Ruth's Hospitality Group, Inc. (RUTH): Free Stock Analysis Report DineEquity, Inc (DIN): Free Stock Analysis Report To read this article on Zacks.com click here. This year too, savings on gas stations, an improving job market and still-contained inflation should lay a grand spread on the Thanksgiving table.
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Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report PACIFIC (EX: JA (PEJ): ETF Research Reports PWRSH-DYN FD&BV (PBJ): ETF Research Reports FT-NDQ GL AUTO (CARZ): ETF Research Reports US GLOBAL JETS (JETS): ETF Research Reports VANECK-AGRIBUS (MOO): ETF Research Reports Camping World Holdings Inc. (CWH): Free Stock Analysis Report Wal-Mart Stores, Inc. (WMT): Free Stock Analysis Report Target Corporation (TGT): Free Stock Analysis Report Cracker Barrel Old Country Store, Inc. (CBRL): Free Stock Analysis Report Denny's Corporation (DENN): Free Stock Analysis Report Bob Evans Farms, Inc. (BOBE): Free Stock Analysis Report Ruth's Hospitality Group, Inc. (RUTH): Free Stock Analysis Report DineEquity, Inc (DIN): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc. AAL This Zacks Rank #3 (Hold) airlines company has a VGM Score of C, at the time of writing. Restaurants like Denny's DENN , Bob Evans BOBE , Cracker Barrel CBRL , DineEquity DIN , Maggiano's Little Italy of Brinker International Restaurants EAT , Rudy Tuesday RT and Ruth's Hospitality Group, Inc. RUTHwill be open on Turkey Day.
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Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report PACIFIC (EX: JA (PEJ): ETF Research Reports PWRSH-DYN FD&BV (PBJ): ETF Research Reports FT-NDQ GL AUTO (CARZ): ETF Research Reports US GLOBAL JETS (JETS): ETF Research Reports VANECK-AGRIBUS (MOO): ETF Research Reports Camping World Holdings Inc. (CWH): Free Stock Analysis Report Wal-Mart Stores, Inc. (WMT): Free Stock Analysis Report Target Corporation (TGT): Free Stock Analysis Report Cracker Barrel Old Country Store, Inc. (CBRL): Free Stock Analysis Report Denny's Corporation (DENN): Free Stock Analysis Report Bob Evans Farms, Inc. (BOBE): Free Stock Analysis Report Ruth's Hospitality Group, Inc. (RUTH): Free Stock Analysis Report DineEquity, Inc (DIN): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc. AAL This Zacks Rank #3 (Hold) airlines company has a VGM Score of C, at the time of writing. The average cost of this year's Thanksgiving feast for 10 is $49.12 , down 75 cents from last year's average of $49.87, according to the American Farm Bureau Federation.
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American Airlines Group Inc. AAL This Zacks Rank #3 (Hold) airlines company has a VGM Score of C, at the time of writing. Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report PACIFIC (EX: JA (PEJ): ETF Research Reports PWRSH-DYN FD&BV (PBJ): ETF Research Reports FT-NDQ GL AUTO (CARZ): ETF Research Reports US GLOBAL JETS (JETS): ETF Research Reports VANECK-AGRIBUS (MOO): ETF Research Reports Camping World Holdings Inc. (CWH): Free Stock Analysis Report Wal-Mart Stores, Inc. (WMT): Free Stock Analysis Report Target Corporation (TGT): Free Stock Analysis Report Cracker Barrel Old Country Store, Inc. (CBRL): Free Stock Analysis Report Denny's Corporation (DENN): Free Stock Analysis Report Bob Evans Farms, Inc. (BOBE): Free Stock Analysis Report Ruth's Hospitality Group, Inc. (RUTH): Free Stock Analysis Report DineEquity, Inc (DIN): Free Stock Analysis Report To read this article on Zacks.com click here. The average cost of this year's Thanksgiving feast for 10 is $49.12 , down 75 cents from last year's average of $49.87, according to the American Farm Bureau Federation.
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7263.0
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2017-11-21 00:00:00 UTC
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Noteworthy Tuesday Option Activity: AAL, NEM, CBOE
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AAL
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https://www.nasdaq.com/articles/noteworthy-tuesday-option-activity-aal-nem-cboe-2017-11-21
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Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in American Airlines Group Inc (Symbol: AAL), where a total volume of 22,924 contracts has been traded thus far today, a contract volume which is representative of approximately 2.3 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 53.9% of AAL's average daily trading volume over the past month, of 4.3 million shares. Particularly high volume was seen for the $50 strike call option expiring December 15, 2017 , with 9,638 contracts trading so far today, representing approximately 963,800 underlying shares of AAL. Below is a chart showing AAL's trailing twelve month trading history, with the $50 strike highlighted in orange:
Newmont Mining Corp (Symbol: NEM) options are showing a volume of 22,623 contracts thus far today. That number of contracts represents approximately 2.3 million underlying shares, working out to a sizeable 49.7% of NEM's average daily trading volume over the past month, of 4.6 million shares. Especially high volume was seen for the $37 strike call option expiring December 15, 2017 , with 11,741 contracts trading so far today, representing approximately 1.2 million underlying shares of NEM. Below is a chart showing NEM's trailing twelve month trading history, with the $37 strike highlighted in orange:
And Cboe Global Markets Inc (Symbol: CBOE) options are showing a volume of 3,453 contracts thus far today. That number of contracts represents approximately 345,300 underlying shares, working out to a sizeable 40.6% of CBOE's average daily trading volume over the past month, of 850,525 shares. Especially high volume was seen for the $125 strike call option expiring January 19, 2018 , with 387 contracts trading so far today, representing approximately 38,700 underlying shares of CBOE. Below is a chart showing CBOE's trailing twelve month trading history, with the $125 strike highlighted in orange:
For the various different available expirations for AAL options , NEM options , or CBOE options , visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Particularly high volume was seen for the $50 strike call option expiring December 15, 2017 , with 9,638 contracts trading so far today, representing approximately 963,800 underlying shares of AAL. Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in American Airlines Group Inc (Symbol: AAL), where a total volume of 22,924 contracts has been traded thus far today, a contract volume which is representative of approximately 2.3 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 53.9% of AAL's average daily trading volume over the past month, of 4.3 million shares.
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Below is a chart showing AAL's trailing twelve month trading history, with the $50 strike highlighted in orange: Newmont Mining Corp (Symbol: NEM) options are showing a volume of 22,623 contracts thus far today. Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in American Airlines Group Inc (Symbol: AAL), where a total volume of 22,924 contracts has been traded thus far today, a contract volume which is representative of approximately 2.3 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 53.9% of AAL's average daily trading volume over the past month, of 4.3 million shares.
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Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in American Airlines Group Inc (Symbol: AAL), where a total volume of 22,924 contracts has been traded thus far today, a contract volume which is representative of approximately 2.3 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 53.9% of AAL's average daily trading volume over the past month, of 4.3 million shares. Particularly high volume was seen for the $50 strike call option expiring December 15, 2017 , with 9,638 contracts trading so far today, representing approximately 963,800 underlying shares of AAL.
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Below is a chart showing CBOE's trailing twelve month trading history, with the $125 strike highlighted in orange: For the various different available expirations for AAL options , NEM options , or CBOE options , visit StockOptionsChannel.com. Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in American Airlines Group Inc (Symbol: AAL), where a total volume of 22,924 contracts has been traded thus far today, a contract volume which is representative of approximately 2.3 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 53.9% of AAL's average daily trading volume over the past month, of 4.3 million shares.
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7264.0
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2017-11-18 00:00:00 UTC
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Another One Bites the Dust: Alaska Airlines Is Pulling Out of Cuba
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AAL
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https://www.nasdaq.com/articles/another-one-bites-dust-alaska-airlines-pulling-out-cuba-2017-11-18
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nan
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Last fall, U.S. airlines were falling over themselves to add flights to Cuba , after the Obama administration loosened restrictions on travel to the Caribbean island nation.
What a difference a year makes. During 2017, the stampede of airlines leaving Cuba has been almost as dramatic as the stampede of airlines competing for the right to fly to Havana a year earlier. Continuing this trend, in early 2018, Alaska Air (NYSE: ALK) will become the next airline to stop flying to Cuba.
The end of Alaska's Havana experiment
Alaska Airlines currently operates a single daily route to Cuba, connecting Los Angeles and Havana. On Tuesday, it announced that it will drop this route after Jan. 22. Customers who have booked tickets beyond then can be rebooked on a different airline, or they can request a refund.
Alaska Airlines' last flight to Cuba will be on Jan. 22. Image source: Alaska Airlines.
In its official statement, Alaska Air blamed the route cancellation on a change in U.S. policy. The Trump administration recently eliminated one category of permitted travel to Cuba: individual "people-to-people" educational trips. (All U.S. visitors to Cuba will now have to travel as part of a group.) About 80% of customers on the Los Angeles-Havana route traveled under this exception, so the new rules were bound to eviscerate demand.
That said, Alaska representatives also acknowledged that the recent policy change wasn't the only reason for the carrier exiting the market. While there was solid demand over the summer, bookings had already tailed off for the fall season. As a result, Alaska Airlines had been thinking about dropping the route even before the new rules went into effect.
The exodus from Cuba continues
Alaska's recent announcement makes it the fourth U.S. airline to stop flying to Cuba in the span of a year. This spring, ultra-low-cost carriers Spirit Airlines and Frontier Airlines and regional airline Silver Airways dropped all of their routes from South Florida to Cuba, as demand failed to live up to expectations. Most of the other airlines that started flying to Cuba last fall -- including American Airlines (NASDAQ: AAL) , JetBlue Airways (NASDAQ: JBLU) , and Southwest Airlines (NYSE: LUV) -- have cut capacity there as well.
Given that overall demand for travel to Cuba has fallen short of expectations, it's surprising that Alaska's route lasted as long as it did. Most of the Cuban-American population is concentrated in Florida. Furthermore, Havana is just a few hundred miles from Florida's major cities, whereas it's 2,300 miles from Los Angeles. That means Alaska had a dramatically higher breakeven fare for its route than the airlines flying between Florida and Cuba.
The squabble for routes to Havana continues
Considering how many airlines have given up on Cuba -- and how virtually all of the others have pared back capacity there over time -- you might assume that nobody would be interested in expanding there. Nevertheless, half a dozen airlines are still looking to add flights to Havana in order to grab a bigger slice of the 20 daily roundtrips that U.S. airlines are permitted to operate there.
As of September, American Airlines, JetBlue Airways, Southwest Airlines, Delta Air Lines , and United Continental were fighting over the three slots that opened up when Frontier and Spirit exited the market. Once again, the airlines have collectively requested significantly more flights than are available. In fact, JetBlue wants all three for itself!
Alaska Airlines' decision to drop its Havana route in January will create a fourth open slot for U.S. carriers looking to expand there. This will give the Department of Transportation a little more wiggle room in making its allocation decision.
Maximizing competition is likely to be the DOT's first priority, as was the case in 2016. This means that low-cost carriers JetBlue and Southwest are both likely to get additional frequencies, whereas American Airlines (which holds the most Havana slots today) will probably have to make do with what it already has. Lastly, Delta and United may get the remaining frequencies that are up for grabs, to prevent them from falling too far behind in Cuba.
10 stocks we like better than Alaska Air Group
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Adam Levine-Weinberg owns shares of Alaska Air Group, Delta Air Lines, JetBlue Airways, and Spirit Airlines and is long January 2019 $10 calls on JetBlue Airways. The Motley Fool owns shares of and recommends Spirit Airlines. The Motley Fool recommends JetBlue Airways. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Most of the other airlines that started flying to Cuba last fall -- including American Airlines (NASDAQ: AAL) , JetBlue Airways (NASDAQ: JBLU) , and Southwest Airlines (NYSE: LUV) -- have cut capacity there as well. The squabble for routes to Havana continues Considering how many airlines have given up on Cuba -- and how virtually all of the others have pared back capacity there over time -- you might assume that nobody would be interested in expanding there. Alaska Airlines' decision to drop its Havana route in January will create a fourth open slot for U.S. carriers looking to expand there.
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Most of the other airlines that started flying to Cuba last fall -- including American Airlines (NASDAQ: AAL) , JetBlue Airways (NASDAQ: JBLU) , and Southwest Airlines (NYSE: LUV) -- have cut capacity there as well. As of September, American Airlines, JetBlue Airways, Southwest Airlines, Delta Air Lines , and United Continental were fighting over the three slots that opened up when Frontier and Spirit exited the market. *Stock Advisor returns as of November 6, 2017 Adam Levine-Weinberg owns shares of Alaska Air Group, Delta Air Lines, JetBlue Airways, and Spirit Airlines and is long January 2019 $10 calls on JetBlue Airways.
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Most of the other airlines that started flying to Cuba last fall -- including American Airlines (NASDAQ: AAL) , JetBlue Airways (NASDAQ: JBLU) , and Southwest Airlines (NYSE: LUV) -- have cut capacity there as well. The end of Alaska's Havana experiment Alaska Airlines currently operates a single daily route to Cuba, connecting Los Angeles and Havana. This spring, ultra-low-cost carriers Spirit Airlines and Frontier Airlines and regional airline Silver Airways dropped all of their routes from South Florida to Cuba, as demand failed to live up to expectations.
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Most of the other airlines that started flying to Cuba last fall -- including American Airlines (NASDAQ: AAL) , JetBlue Airways (NASDAQ: JBLU) , and Southwest Airlines (NYSE: LUV) -- have cut capacity there as well. Last fall, U.S. airlines were falling over themselves to add flights to Cuba , after the Obama administration loosened restrictions on travel to the Caribbean island nation. Alaska Airlines' last flight to Cuba will be on Jan. 22.
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7265.0
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2017-11-17 00:00:00 UTC
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The Zacks Analyst Blog Highlights: Delta Air Lines, Southwest Airlines, American Airlines Group, United Continental Holdings and JetBlue Airways
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AAL
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https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-delta-air-lines-southwest-airlines-american-airlines-0
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For Immediate Release
Chicago, IL - November 17, 2017 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Delta Air Lines, Inc.DAL , Southwest Airlines Co.LUV , American Airlines Group, Inc.AAL , United Continental Holdings, Inc.UAL and JetBlue Airways Corp.JBLU .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Thursday's Analyst Blog:
High Costs, Hurricanes Hurt Airlines in Q3: The Road Ahead
The third-quarter earnings have drawn to a close for the airline companies. Notably, most carriers have managed to surpass estimates in the reported period, despite back-to-back natural calamities, primarily owing to reduced expectations.
However, the broader scenario does not seem so bright for the companies with earnings having declined massively on a year-over-year basis.
Q3 Results
The third quarter of 2017 saw major airline companies like Delta Air Lines, Inc., Southwest Airlines Co., American Airlines Group, Inc. and United Continental Holdings, Inc. topping earnings estimates.
However, earnings decreased on a year-over-year basis due to higher costs. At Delta Air Lines and Southwest Airlines, the bottom line declined 7.6% and 5.4%, respectively, while at United Continental, the metric decreased 28.6%. American Airlines too reported a significant reduction in earnings in the quarter.
The hurricanes have significantly disrupted operations of the airlines. The multiple flight cancellations as well as continued soft demand for air travel to and from the affected areas due to Hurricane Harvey have hampered the companies' top line.
Southwest Airlines' Passenger revenues per available seat mile (PRASM: a key measure of unit revenues) slid 1.4%, while RASM (revenues per available seat mile) was down 0.5% year over year.
United Continental's top line also slipped 0.4% on a year-over-year basis in the quarter. This Zacks Rank #3 (Hold) company, which had to cancel 8,300 flights in the quarter under review due to weather-related disturbances, reported a 3.7% fall in PRASM. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
High Costs Hitting Airlines
Persistent high costs pertaining to fuel and labor have been hurting the bottom-line growth of airline stocks for quite some time now.
Further, adding to the woes, Harvey contributed to an increase in oil prices . Higher fuel prices are expected to limit the earnings growth of the carriers in the fourth quarter as well.
Also, with most carriers inking multiple labor deals, such costs have been on a rise of late. In fact this downside has been denting the earnings picture for the airlines over the past few quarters and the fourth quarter is likely to be no exception.
Bearish Q4 and Full-Year View
Several airline companies have provided a grim outlook for the final quarter of 2017 as well as the full year. United Continental expects consolidated PRASM to decline between 1% and 3% (year over year) in the fourth quarter of 2017. In addition, the company anticipates unit costs (excluding Fuel, Profit Sharing & Third Party business costs) to increase in the band of 2.5-3.5% due to higher labor and fuel costs. Average fuel price per gallon (consolidated) is projected between $1.80 and $1.85.
For the fourth quarter of 2017, JetBlue Airways Corp. expects consolidated operating cost per available seat mile (excluding fuel) to grow in the band of 5-7%. For 2017, the metric is projected to grow in the 4-5% range. RASM is anticipated to grow in the range of (3%) to 0% on a year-over-year basis.
Price Performance
The dull outlook for the airlines is evident from the fact that the Zacks Airline Industry has underperformed the broader market in the last three months. While the S&P 500 Index has gained 4.1%, the industry has declined 2.1%.
Zacks Industry Rank Denotes the Drab Scenario
The Zacks Industry Rank of 201 (of 250 plus groups) carried by the Zacks Airline industry further highlights the woes of the airlines. This unfavorable rank places the companies in the bottom 21% of the Zacks industries.
We classify our entire 250-plus industries into two groups: the top half (i.e. industries with the best average Zacks Rank) and the bottom half (the industries with the worst average Zacks Rank).
Using a week's rebalance for over 10 years now, the top half has been beating the bottom half by a factor of more than 2 to 1.
Click here to know more: About Zacks Industry Rank
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Southwest Airlines Company (LUV): Free Stock Analysis Report
JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Stocks recently featured in the blog include Delta Air Lines, Inc.DAL , Southwest Airlines Co.LUV , American Airlines Group, Inc.AAL , United Continental Holdings, Inc.UAL and JetBlue Airways Corp.JBLU . Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The multiple flight cancellations as well as continued soft demand for air travel to and from the affected areas due to Hurricane Harvey have hampered the companies' top line.
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Stocks recently featured in the blog include Delta Air Lines, Inc.DAL , Southwest Airlines Co.LUV , American Airlines Group, Inc.AAL , United Continental Holdings, Inc.UAL and JetBlue Airways Corp.JBLU . Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Q3 Results The third quarter of 2017 saw major airline companies like Delta Air Lines, Inc., Southwest Airlines Co., American Airlines Group, Inc. and United Continental Holdings, Inc. topping earnings estimates.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks recently featured in the blog include Delta Air Lines, Inc.DAL , Southwest Airlines Co.LUV , American Airlines Group, Inc.AAL , United Continental Holdings, Inc.UAL and JetBlue Airways Corp.JBLU . Q3 Results The third quarter of 2017 saw major airline companies like Delta Air Lines, Inc., Southwest Airlines Co., American Airlines Group, Inc. and United Continental Holdings, Inc. topping earnings estimates.
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Stocks recently featured in the blog include Delta Air Lines, Inc.DAL , Southwest Airlines Co.LUV , American Airlines Group, Inc.AAL , United Continental Holdings, Inc.UAL and JetBlue Airways Corp.JBLU . Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Q3 Results The third quarter of 2017 saw major airline companies like Delta Air Lines, Inc., Southwest Airlines Co., American Airlines Group, Inc. and United Continental Holdings, Inc. topping earnings estimates.
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7266.0
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2017-11-16 00:00:00 UTC
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RWC Asset Management LLP Buys The Kroger Co, American Airlines Group Inc, Progress Software ...
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AAL
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https://www.nasdaq.com/articles/rwc-asset-management-llp-buys-kroger-co-american-airlines-group-inc-progress-software-2017
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nan
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RWC Asset Management LLPTD AmeritradeE*TRADE
New Purchases: PRGS , KAR , IAC , QSR, SIX, BHGE, MTCH,
Added Positions:KR, AAL, AMTD, CSX, HBAN, CHTR, EXP, LAZ, SKYW, BID,
Reduced Positions:PLNT, AMZN, JNJ, EBAY, STZ, LUV, CL, PM, MON, PG,
Sold Out:MHK, CZR, RAI, ETFC, ORCL, MAS, STKL, GOOGL, MMM, FMC,
For the details of RWC Asset Management LLP's stock buys and sells, go to http://www.gurufocus.com/StockBuy.php?GuruName=RWC+Asset+Management+LLP
These are the top 5 holdings of RWC Asset Management LLP
Amazon.com Inc ( AMZN ) - 62,775 shares, 4.62% of the total portfolio. Shares reduced by 18.56%
Microsoft Corp ( MSFT ) - 744,446 shares, 4.24% of the total portfolio. Shares reduced by 5.09%
CSX Corp ( CSX ) - 936,500 shares, 3.89% of the total portfolio. Shares added by 22.28%
American Airlines Group Inc ( AAL ) - 1,057,145 shares, 3.84% of the total portfolio. Shares added by 30.41%
Johnson & Johnson ( JNJ ) - 336,806 shares, 3.35% of the total portfolio. Shares reduced by 19.16%
New Purchase: Progress Software Corp (PRGS)
RWC Asset Management LLP initiated holdings in Progress Software Corp. The purchase prices were between $30.9 and $37.94, with an estimated average price of $33.3. The stock is now traded at around $41.41. The impact to the portfolio due to this purchase was 0.88%. The holdings were 300,000 shares as of 2017-09-30.
New Purchase: KAR Auction Services Inc (KAR)
RWC Asset Management LLP initiated holdings in KAR Auction Services Inc. The purchase prices were between $40.31 and $47.74, with an estimated average price of $43.6. The stock is now traded at around $47.53. The impact to the portfolio due to this purchase was 0.81%. The holdings were 222,000 shares as of 2017-09-30.
New Purchase: Restaurant Brands International Inc (QSR)
RWC Asset Management LLP initiated holdings in Restaurant Brands International Inc. The purchase prices were between $59.25 and $65.58, with an estimated average price of $61.79. The stock is now traded at around $65.17. The impact to the portfolio due to this purchase was 0.73%. The holdings were 150,000 shares as of 2017-09-30.
New Purchase: IAC/InterActiveCorp (IAC)
RWC Asset Management LLP initiated holdings in IAC/InterActiveCorp. The purchase prices were between $101.04 and $118.25, with an estimated average price of $108.42. The stock is now traded at around $124.45. The impact to the portfolio due to this purchase was 0.73%. The holdings were 80,808 shares as of 2017-09-30.
New Purchase: Six Flags Entertainment Corp (SIX)
RWC Asset Management LLP initiated holdings in Six Flags Entertainment Corp. The purchase prices were between $51.9 and $60.88, with an estimated average price of $56.04. The stock is now traded at around $64.96. The impact to the portfolio due to this purchase was 0.58%. The holdings were 125,000 shares as of 2017-09-30.
New Purchase: Baker Hughes, a GE Co (BHGE)
RWC Asset Management LLP initiated holdings in Baker Hughes, a GE Co. The purchase prices were between $32.54 and $37.91, with an estimated average price of $35.47. The stock is now traded at around $30.15. The impact to the portfolio due to this purchase was 0.33%. The holdings were 119,360 shares as of 2017-09-30.
Added: The Kroger Co (KR)
RWC Asset Management LLP added to the holdings in The Kroger Co by 78.83%. The purchase prices were between $19.94 and $24.63, with an estimated average price of $22.55. The stock is now traded at around $22.28. The impact to the portfolio due to this purchase was 0.95%. The holdings were 1,404,343 shares as of 2017-09-30.
Added: American Airlines Group Inc ( AAL )
RWC Asset Management LLP added to the holdings in American Airlines Group Inc by 30.41%. The purchase prices were between $42.92 and $54.22, with an estimated average price of $48.42. The stock is now traded at around $47.68. The impact to the portfolio due to this purchase was 0.9%. The holdings were 1,057,145 shares as of 2017-09-30.
Added: TD Ameritrade Holding Corp (AMTD)
RWC Asset Management LLP added to the holdings in TD Ameritrade Holding Corp by 48.94%. The purchase prices were between $42.43 and $48.88, with an estimated average price of $44.81. The stock is now traded at around $49.09. The impact to the portfolio due to this purchase was 0.78%. The holdings were 636,693 shares as of 2017-09-30.
Added: CSX Corp ( CSX )
RWC Asset Management LLP added to the holdings in CSX Corp by 22.28%. The purchase prices were between $48.14 and $55.19, with an estimated average price of $51.49. The stock is now traded at around $50.12. The impact to the portfolio due to this purchase was 0.71%. The holdings were 936,500 shares as of 2017-09-30.
Added: Huntington Bancshares Inc (HBAN)
RWC Asset Management LLP added to the holdings in Huntington Bancshares Inc by 22.49%. The purchase prices were between $12.18 and $13.87, with an estimated average price of $13.14. The stock is now traded at around $13.40. The impact to the portfolio due to this purchase was 0.58%. The holdings were 2,973,996 shares as of 2017-09-30.
Added: Charter Communications Inc (CHTR)
RWC Asset Management LLP added to the holdings in Charter Communications Inc by 22.30%. The purchase prices were between $328.67 and $402.5, with an estimated average price of $371.66. The stock is now traded at around $340.63. The impact to the portfolio due to this purchase was 0.49%. The holdings were 97,378 shares as of 2017-09-30.
Sold Out: Mohawk Industries Inc (MHK)
RWC Asset Management LLP sold out the holdings in Mohawk Industries Inc. The sale prices were between $238.34 and $259.69, with an estimated average price of $248.94.
Sold Out: Caesars Entertainment Corp (CZR)
RWC Asset Management LLP sold out the holdings in Caesars Entertainment Corp. The sale prices were between $11.15 and $13.15, with an estimated average price of $12.1.
Sold Out: Reynolds American Inc (RAI)
RWC Asset Management LLP sold out the holdings in Reynolds American Inc. The sale prices were between $63.94 and $66.89, with an estimated average price of $65.08.
Sold Out: E*TRADE Financial Corp (ETFC)
RWC Asset Management LLP sold out the holdings in E*TRADE Financial Corp. The sale prices were between $38.45 and $43.2, with an estimated average price of $40.53.
Sold Out: Oracle Corp (ORCL)
RWC Asset Management LLP sold out the holdings in Oracle Corp. The sale prices were between $47.92 and $52.8, with an estimated average price of $49.76.
Sold Out: Masco Corp (MAS)
RWC Asset Management LLP sold out the holdings in Masco Corp. The sale prices were between $36.3 and $39.02, with an estimated average price of $37.68.
Warning! GuruFocus has detected 2 Warning Sign with KR. Click here to check it out.
KR 15-Year Financial Data
The intrinsic value of KR
Peter Lynch Chart of KR
Premium Members
This article first appeared on GuruFocus .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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RWC Asset Management LLPTD AmeritradeE*TRADE New Purchases: PRGS , KAR , IAC , QSR, SIX, BHGE, MTCH, Added Positions:KR, AAL, AMTD, CSX, HBAN, CHTR, EXP, LAZ, SKYW, BID, Reduced Positions:PLNT, AMZN, JNJ, EBAY, STZ, LUV, CL, PM, MON, PG, Sold Out:MHK, CZR, RAI, ETFC, ORCL, MAS, STKL, GOOGL, MMM, FMC, For the details of RWC Asset Management LLP's stock buys and sells, go to http://www.gurufocus.com/StockBuy.php?GuruName=RWC+Asset+Management+LLP These are the top 5 holdings of RWC Asset Management LLP Amazon.com Inc ( AMZN ) - 62,775 shares, 4.62% of the total portfolio. Shares added by 22.28% American Airlines Group Inc ( AAL ) - 1,057,145 shares, 3.84% of the total portfolio. Added: American Airlines Group Inc ( AAL ) RWC Asset Management LLP added to the holdings in American Airlines Group Inc by 30.41%.
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RWC Asset Management LLPTD AmeritradeE*TRADE New Purchases: PRGS , KAR , IAC , QSR, SIX, BHGE, MTCH, Added Positions:KR, AAL, AMTD, CSX, HBAN, CHTR, EXP, LAZ, SKYW, BID, Reduced Positions:PLNT, AMZN, JNJ, EBAY, STZ, LUV, CL, PM, MON, PG, Sold Out:MHK, CZR, RAI, ETFC, ORCL, MAS, STKL, GOOGL, MMM, FMC, For the details of RWC Asset Management LLP's stock buys and sells, go to http://www.gurufocus.com/StockBuy.php?GuruName=RWC+Asset+Management+LLP These are the top 5 holdings of RWC Asset Management LLP Amazon.com Inc ( AMZN ) - 62,775 shares, 4.62% of the total portfolio. Shares added by 22.28% American Airlines Group Inc ( AAL ) - 1,057,145 shares, 3.84% of the total portfolio. Added: American Airlines Group Inc ( AAL ) RWC Asset Management LLP added to the holdings in American Airlines Group Inc by 30.41%.
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RWC Asset Management LLPTD AmeritradeE*TRADE New Purchases: PRGS , KAR , IAC , QSR, SIX, BHGE, MTCH, Added Positions:KR, AAL, AMTD, CSX, HBAN, CHTR, EXP, LAZ, SKYW, BID, Reduced Positions:PLNT, AMZN, JNJ, EBAY, STZ, LUV, CL, PM, MON, PG, Sold Out:MHK, CZR, RAI, ETFC, ORCL, MAS, STKL, GOOGL, MMM, FMC, For the details of RWC Asset Management LLP's stock buys and sells, go to http://www.gurufocus.com/StockBuy.php?GuruName=RWC+Asset+Management+LLP These are the top 5 holdings of RWC Asset Management LLP Amazon.com Inc ( AMZN ) - 62,775 shares, 4.62% of the total portfolio. Shares added by 22.28% American Airlines Group Inc ( AAL ) - 1,057,145 shares, 3.84% of the total portfolio. Added: American Airlines Group Inc ( AAL ) RWC Asset Management LLP added to the holdings in American Airlines Group Inc by 30.41%.
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RWC Asset Management LLPTD AmeritradeE*TRADE New Purchases: PRGS , KAR , IAC , QSR, SIX, BHGE, MTCH, Added Positions:KR, AAL, AMTD, CSX, HBAN, CHTR, EXP, LAZ, SKYW, BID, Reduced Positions:PLNT, AMZN, JNJ, EBAY, STZ, LUV, CL, PM, MON, PG, Sold Out:MHK, CZR, RAI, ETFC, ORCL, MAS, STKL, GOOGL, MMM, FMC, For the details of RWC Asset Management LLP's stock buys and sells, go to http://www.gurufocus.com/StockBuy.php?GuruName=RWC+Asset+Management+LLP These are the top 5 holdings of RWC Asset Management LLP Amazon.com Inc ( AMZN ) - 62,775 shares, 4.62% of the total portfolio. Shares added by 22.28% American Airlines Group Inc ( AAL ) - 1,057,145 shares, 3.84% of the total portfolio. Added: American Airlines Group Inc ( AAL ) RWC Asset Management LLP added to the holdings in American Airlines Group Inc by 30.41%.
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7267.0
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2017-11-15 00:00:00 UTC
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These Low-Cost Airlines Are Getting Hundreds Of New Passenger Jets
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AAL
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https://www.nasdaq.com/articles/these-low-cost-airlines-are-getting-hundreds-new-passenger-jets-2017-11-15
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nan
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Discount carrier Frontier Airlines is set to get a whole bunch of new jets that could give it more options as it skirmishes with United Airlines ( UAL ) over cheap fares.
[ibd-display-video id=2652448 width=50 float=left autostart=true] Boeing ( BA ) rival Airbus ( EADSY ) on Wednesday announced a deal to sell 430 jets to Frontier Airlines and three other partner airlines of Bill Franke's Indigo Partners, a big investor in discount airlines, in a deal valued at as much as $49.5 billion.
The memorandum-of-understanding agreement, which Airbus said was its "largest single announcement ever," was announced at the Dubai Airshow . It would hand Frontier 100 A320neo jets - a narrow-body jet that usually seats around 150 people - and 34 A321neos, which typically seat around 185 people.
The remaining A320s and A321s would go to other ultra discounters when the agreements with each are finalized: Wizz Air in Hungary, JetSmart in Chile, and Volaris in Mexico.
"This significant commitment for 430 additional aircraft underscores our optimistic view of the growth potential of our family of low-cost airlines, as well as our confidence in the A320neo Family as a platform for that growth," Franke, managing partner of Indigo, said in a statement on Wednesday.
United Airlines closed up 0.5% on the stock market today , Delta Air Lines ( DAL ) rose 0.9%, while American Airlines ( AAL ) climbed 3%, and Southwest (LUV) added 1.6%. Ultra low-cost carrier Spirit Airlines (SAVE) rallied 2.7%, and Alaska Air (ALK) jumped 4.5%.
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The deal comes as new types of jets give budget carriers more ways to make their business models work.
Frontier, a carrier known for the "National-Geographic"-esque portraits of animals on its tail fins, this year has made more of a push into Denver, a big, profitable United hub. United, which has tried to match Frontier and Spirit on some fares in its biggest markets, this summer said Frontier's move amounted to a tacit admission that cracks were forming in the ultra-low-cost model.
United President Scott Kirby, during the carrier's second-quarter earnings call, said that in moving into a hub, Frontier was taking on the much more complicated duties of handling connecting flights. He added the battle was one that "I guarantee United will win."
But Airbus' fuel-efficient A321 jets have made low-cost long-haul flights more viable. Such flights have become particularly common between Europe and the U.S. The cheaper airfares offered by the likes of Norwegian Air and WOW air have chipped away at the stronghold Delta, American and United had built up over the Atlantic.
JetBlue (JBLU), which has been considering whether offer flights to Europe, has added A321neos to its fleet and has an option to take delivery of the Airbus A321LR - an alternate version of the A321neo.
On its website, Airbus says the A321LR is "ideally suited to transatlantic routes, and enables airlines to tap into new long-haul markets that were not previously accessible with current single-aisle aircraft."
RELATED:
Boeing Reportedly Mulls 767 Passenger-Jet Reboot As '797' Looms
Will Delta Air Lines' Spat With Boeing Weigh On Massive Plane Order?
American Signals Higher '18 Capacity; Another Carrier Warns On Costs
United Airlines Dives On Disastrous Earnings Call; Rival Carriers Fall
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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United Airlines closed up 0.5% on the stock market today , Delta Air Lines ( DAL ) rose 0.9%, while American Airlines ( AAL ) climbed 3%, and Southwest (LUV) added 1.6%. Frontier, a carrier known for the "National-Geographic"-esque portraits of animals on its tail fins, this year has made more of a push into Denver, a big, profitable United hub. United President Scott Kirby, during the carrier's second-quarter earnings call, said that in moving into a hub, Frontier was taking on the much more complicated duties of handling connecting flights.
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United Airlines closed up 0.5% on the stock market today , Delta Air Lines ( DAL ) rose 0.9%, while American Airlines ( AAL ) climbed 3%, and Southwest (LUV) added 1.6%. [ibd-display-video id=2652448 width=50 float=left autostart=true] Boeing ( BA ) rival Airbus ( EADSY ) on Wednesday announced a deal to sell 430 jets to Frontier Airlines and three other partner airlines of Bill Franke's Indigo Partners, a big investor in discount airlines, in a deal valued at as much as $49.5 billion. Ultra low-cost carrier Spirit Airlines (SAVE) rallied 2.7%, and Alaska Air (ALK) jumped 4.5%.
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United Airlines closed up 0.5% on the stock market today , Delta Air Lines ( DAL ) rose 0.9%, while American Airlines ( AAL ) climbed 3%, and Southwest (LUV) added 1.6%. Discount carrier Frontier Airlines is set to get a whole bunch of new jets that could give it more options as it skirmishes with United Airlines ( UAL ) over cheap fares. [ibd-display-video id=2652448 width=50 float=left autostart=true] Boeing ( BA ) rival Airbus ( EADSY ) on Wednesday announced a deal to sell 430 jets to Frontier Airlines and three other partner airlines of Bill Franke's Indigo Partners, a big investor in discount airlines, in a deal valued at as much as $49.5 billion.
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United Airlines closed up 0.5% on the stock market today , Delta Air Lines ( DAL ) rose 0.9%, while American Airlines ( AAL ) climbed 3%, and Southwest (LUV) added 1.6%. [ibd-display-video id=2652448 width=50 float=left autostart=true] Boeing ( BA ) rival Airbus ( EADSY ) on Wednesday announced a deal to sell 430 jets to Frontier Airlines and three other partner airlines of Bill Franke's Indigo Partners, a big investor in discount airlines, in a deal valued at as much as $49.5 billion. United President Scott Kirby, during the carrier's second-quarter earnings call, said that in moving into a hub, Frontier was taking on the much more complicated duties of handling connecting flights.
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7268.0
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2017-11-15 00:00:00 UTC
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United Continental (UAL) Slips to 52-Week Low: Here's Why
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AAL
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https://www.nasdaq.com/articles/united-continental-ual-slips-to-52-week-low%3A-heres-why-2017-11-15
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nan
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nan
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Shares of United Continental HoldingsUAL tumbled to a 52-week low of $56.60 on Nov 14. However, the figure recovered marginally to close the trading session at $57.20, down 1.06% from the closing price of Nov 13.
In fact, shares of the carrier have underperformed the Zacks Airline industry on a year-to-date basis. The stock has been down 21.5%, as against the industry's growth of 6.2%.
What's Pulling the Stock Down?
United Continental, like its peers such as American Airlines Group AAL , had to cancel multiple flights due to the recent hurricanes. This is because Harvey has affected United Continental the most as Houston is the carrier's second-largest hub.
In fact, the carrier's results in the third quarter of 2017 were also hurt due to Harvey. The company cancelled 8,300 flights due to Harvey, Irma, and Maria. Consequently, its third-quarter pre-tax income was adversely affected to the tune of approximately $185 million.
Moreover, the company's bottom line in the third quarter of 2017 was impacted by the surge in labor and fuel costs. Earnings in the quarter declined 28.6% year over year due to higher costs. However, average fuel price per gallon (on a consolidated basis), excluding hedge losses, increased 14.1% year over year to $1.70. Also, consolidated unit cost or cost per available seat mile (CASM) - excluding fuel, third-party business expenses and profit sharing - increased 2.6% year over year, primarily owing to the labor deals inked by the company.
Passenger unit revenue (PRASM) declined 3.7% in the reported quarter mainly due to the weather-related disruptions. United Continental expects consolidated PRASM to decline between 1% and 3% (year over year) in the final quarter of 2017.
In fact, shares of this Zacks Rank #3 (Hold) stock fell approximately 12% on Oct 19 despite reporting better-than-expected earnings per share and revenues. The lack of clarity provided by the company, on the conference call, pertaining to its efforts to check costs and boost revenues disappointed investors. Consequently, the stock tumbled, registering its biggest one-day percentage decline in the past eight years.
We are also concerned about the capacity overexpansion at United Continental. In fact, on the third-quarter conference call, the company announced that it will continue to expand capacity in a bid to maintain market share at major airport hubs to deal with competition from discount carriers like Spirit Airlines SAVE .
Load factor (percentage of seats filled by passengers) declined in the quarter as capacity expansion outweighed traffic growth. The metric declined in the month of October as well, due to the same reason.
A Key Airline Pick
Investors interested in the airline space may consider Deutsche Lufthansa DLAKY , which holds a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Shares of Deutsche Lufthansa have gained more than 100% in a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report
Deutsche Lufthansa AG (DLAKY): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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United Continental, like its peers such as American Airlines Group AAL , had to cancel multiple flights due to the recent hurricanes. Click to get this free report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report Deutsche Lufthansa AG (DLAKY): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The lack of clarity provided by the company, on the conference call, pertaining to its efforts to check costs and boost revenues disappointed investors.
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Click to get this free report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report Deutsche Lufthansa AG (DLAKY): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. United Continental, like its peers such as American Airlines Group AAL , had to cancel multiple flights due to the recent hurricanes. Passenger unit revenue (PRASM) declined 3.7% in the reported quarter mainly due to the weather-related disruptions.
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Click to get this free report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report Deutsche Lufthansa AG (DLAKY): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. United Continental, like its peers such as American Airlines Group AAL , had to cancel multiple flights due to the recent hurricanes. Also, consolidated unit cost or cost per available seat mile (CASM) - excluding fuel, third-party business expenses and profit sharing - increased 2.6% year over year, primarily owing to the labor deals inked by the company.
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United Continental, like its peers such as American Airlines Group AAL , had to cancel multiple flights due to the recent hurricanes. Click to get this free report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report Deutsche Lufthansa AG (DLAKY): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. This is because Harvey has affected United Continental the most as Houston is the carrier's second-largest hub.
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7269.0
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2017-11-15 00:00:00 UTC
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American Airlines to Add Dallas/Fort Worth-Reykjavik Flights
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AAL
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https://www.nasdaq.com/articles/american-airlines-to-add-dallas-fort-worth-reykjavik-flights-2017-11-15
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nan
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nan
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American Airlines Group Inc.AAL will extend its European reach with a new service to Reykjavik-Keflavik, Iceland. The service is expected to begin on Jun 7 next year, subject to government approval, from the airline's hub, Dallas/Fort Worth International Airport.
The new service complements the existing ones from Dallas/Fort Worth to Rome and Amsterdam. The carrier offers more than 760 daily flights from Dallas/Fort Worth covering around 200 destinations across 31 countries.
The Boeing 757-200 aircraft will ply on this route. The 176-seater aircraft features lie-flat Business Class seats and a full suite of luxurious products such as Casper bedding and Cole Haan amenity kits in the premium cabin. Tickets on the route will be on sale from Nov 20.
The carrier has been focusing on expanding its European base for quite some time now. Earlier in the year, the airline announced special summer services to Budapest and Prague from Philadelphia, plus an additional flight to Venice from Chicago. The services are scheduled to begin from May 4, 2018.
American Airlines Group, Inc. Price
American Airlines Group, Inc. Price | American Airlines Group, Inc. Quote
Zacks Rank & Key Picks
American Airlines carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are International Consolidated Airlines Group SA ICAGY , Deutsche Lufthansa AG DLAKY and C.H. Robinson Worldwide, Inc. CHRW . While International Consolidated Airlines sport a Zacks Rank #1 (Strong Buy), Deutsche Lufthansa and C.H. Robinson carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Shares of International Consolidated Airlines, Deutsche Lufthansa and C.H. Robinson have gained more than 37%, 100% and 8% respectively, in a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Deutsche Lufthansa AG (DLAKY): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
International Consolidated Airlines Group SA (ICAGY): Free Stock Analysis Report
C.H. Robinson Worldwide, Inc. (CHRW): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines Group Inc.AAL will extend its European reach with a new service to Reykjavik-Keflavik, Iceland. Click to get this free report Deutsche Lufthansa AG (DLAKY): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report International Consolidated Airlines Group SA (ICAGY): Free Stock Analysis Report C.H. The 176-seater aircraft features lie-flat Business Class seats and a full suite of luxurious products such as Casper bedding and Cole Haan amenity kits in the premium cabin.
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Click to get this free report Deutsche Lufthansa AG (DLAKY): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report International Consolidated Airlines Group SA (ICAGY): Free Stock Analysis Report C.H. American Airlines Group Inc.AAL will extend its European reach with a new service to Reykjavik-Keflavik, Iceland. American Airlines Group, Inc. Price American Airlines Group, Inc. Price | American Airlines Group, Inc. Quote Zacks Rank & Key Picks American Airlines carries a Zacks Rank #3 (Hold).
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Click to get this free report Deutsche Lufthansa AG (DLAKY): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report International Consolidated Airlines Group SA (ICAGY): Free Stock Analysis Report C.H. American Airlines Group Inc.AAL will extend its European reach with a new service to Reykjavik-Keflavik, Iceland. American Airlines Group, Inc. Price American Airlines Group, Inc. Price | American Airlines Group, Inc. Quote Zacks Rank & Key Picks American Airlines carries a Zacks Rank #3 (Hold).
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Click to get this free report Deutsche Lufthansa AG (DLAKY): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report International Consolidated Airlines Group SA (ICAGY): Free Stock Analysis Report C.H. American Airlines Group Inc.AAL will extend its European reach with a new service to Reykjavik-Keflavik, Iceland. While International Consolidated Airlines sport a Zacks Rank #1 (Strong Buy), Deutsche Lufthansa and C.H.
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7270.0
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2017-11-15 00:00:00 UTC
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Alaska Air Group (ALK) Subsidiary to Cease Havana Operations
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AAL
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https://www.nasdaq.com/articles/alaska-air-group-alk-subsidiary-to-cease-havana-operations-2017-11-15
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nan
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nan
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Alaska Air Group Inc. 's ALK wholly-owned subsidiary, Alaska Airlines, has announced that it will discontinue service between Los Angeles and Havana, Cuba, primarily due to soft demand.
Around 80% of the passengers to Havana visited the place for people-to-people educational travel on U.S. allowance. However, President Donald Trump's recent changes to U.S. policy have discarded such allowances. Coupled with a severe drop in demand since August, the airline was driven to take such a step.
The last plane on the Los Angeles-Havana route will ply on Jan 22, 2018. The carrier will redeploy the Boeing 737 aircraft, used to serve Havana, on the Seattle-Orange County, CA route where demand is higher.
With this move, the carrier joins other U.S. airlines, which are either reducing flights to Cuba or terminating the service entirely. Spirit Airlines SAVE , Frontier Airlines and Silver Airways have also ceased services to this destination. Moreover, the likes of American Airlines Group AAL and JetBlue Airways JBLU have trimmed their services to the nation.
Alaska Air Group, Inc. Price
Alaska Air Group, Inc. Price | Alaska Air Group, Inc. Quote
This Zacks Rank #5 (Strong Sell) company began the Los Angeles-Havana flight on Jan 5, 2017. The carrier has launched 44 new routes so far this year and the numbers are expected to increase as per forecasts. The company expects growth of 7.2% this year. For 2018, the airline aims to add capacity in the existing markets and achieve approximately 8% network growth. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The airline's travelers with bookings to Havana post Jan 22 will be rebooked on another airline free of cost. Conversely, they may be offered a full refund.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Alaska Air Group, Inc. (ALK): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Moreover, the likes of American Airlines Group AAL and JetBlue Airways JBLU have trimmed their services to the nation. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. The carrier will redeploy the Boeing 737 aircraft, used to serve Havana, on the Seattle-Orange County, CA route where demand is higher.
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Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Moreover, the likes of American Airlines Group AAL and JetBlue Airways JBLU have trimmed their services to the nation. Alaska Air Group, Inc. Price Alaska Air Group, Inc. Price | Alaska Air Group, Inc. Quote This Zacks Rank #5 (Strong Sell) company began the Los Angeles-Havana flight on Jan 5, 2017.
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Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Moreover, the likes of American Airlines Group AAL and JetBlue Airways JBLU have trimmed their services to the nation. Alaska Air Group Inc. 's ALK wholly-owned subsidiary, Alaska Airlines, has announced that it will discontinue service between Los Angeles and Havana, Cuba, primarily due to soft demand.
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Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Moreover, the likes of American Airlines Group AAL and JetBlue Airways JBLU have trimmed their services to the nation. The carrier has launched 44 new routes so far this year and the numbers are expected to increase as per forecasts.
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7271.0
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2017-11-14 00:00:00 UTC
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After WOW Offers $100 Iceland Flight, American Opens Reykjavik Route
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AAL
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https://www.nasdaq.com/articles/after-wow-offers-100-iceland-flight-american-opens-reykjavik-route-2017-11-14
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nan
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nan
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American Airlines ( AAL ) on Tuesday said it will add seasonal service between Dallas and Iceland, while ultra-low-cost carrier Spirit Airlines ( SAVE ) announced new service from Richmond, Va., to Orlando and Fort Lauderdale, Fla.
[ibd-display-video id=2642056 width=50 float=left autostart=true] The announcements come as American and legacy rivals Delta Air Lines ( DAL ) and United Airlines ( UAL ) look for ways to compete against budget long-haul carriers in Europe, and as Spirit positions itself for Spring Break.
American said that it would begin offering its seasonal service from its Dallas-Fort Worth hub to Iceland's Reykjavik-Keflavik airport on June 7. Tickets go on sale on Nov. 20. The move would pit American against WOW air, a low-cost, long-haul carrier in Iceland that also offers flights between those two airports.
Reykjavik, American noted, has become "a very popular leisure destination" and complements its "continued growth from Dallas-Fort Worth, including Rome and Amsterdam."
WOW Air in August said it would add flights from four Midwestern U.S. cities to Reykjavik starting this coming spring for as low as $99.99 one way .
During its third-quarter earnings call last month, American said that unit revenue in the trans-Atlantic market, where competition from European discounters is intense, rose during the third quarter. Better pricing and "easing comps from past terror events" in 2016 helped with the improvement.
Still, management said that they expected to see more of the same in the region for the fourth quarter, with discounting from expanding low-cost carriers still "aggressive." However, the company said premium-cabin fare offerings, and the carrier's Premium Economy fare class, would help prop up results.
Delta last month said also said that its trans-Atlantic business would show a bigger quarter-to-quarter improvement than any other segment in Q4. The carrier cited stronger business travel and Europe's rebound from a recession as reasons.
Shares of American were up 0.15% in the stock market today , while Delta edged 0.1% higher, and United dipped 1.1%.
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Spirit, meanwhile, said it would begin daily, nonstop service from Richmond International Airport to Orlando International Airport and Fort Lauderdale-Hollywood International Airport on March 15.
"Our commitment to low fares will bring more travel opportunities to the area, whether it be a family theme park vacation or last-minute beach getaway," the company said in a statement.
The carrier last week said it would broaden its service in New Orleans. Spirit at that time also said it would start flying from Chicago and Baltimore to Cancun.
Shares of Spirit climbed 2.8%, Southwest Airlines ( LUV ) added 0.9%, JetBlue (JBLU) rallied 3.6% and Alaska Air (ALK) lost 0.1%.
RELATED:
American Signals Higher '18 Capacity; Another Carrier Warns On Costs
United Airlines Dives On Disastrous Earnings Call; Rival Carriers Fall
Will Delta Air Lines' Spat With Boeing Weigh On Massive Plane Order?
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines ( AAL ) on Tuesday said it will add seasonal service between Dallas and Iceland, while ultra-low-cost carrier Spirit Airlines ( SAVE ) announced new service from Richmond, Va., to Orlando and Fort Lauderdale, Fla. [ibd-display-video id=2642056 width=50 float=left autostart=true] The announcements come as American and legacy rivals Delta Air Lines ( DAL ) and United Airlines ( UAL ) look for ways to compete against budget long-haul carriers in Europe, and as Spirit positions itself for Spring Break. During its third-quarter earnings call last month, American said that unit revenue in the trans-Atlantic market, where competition from European discounters is intense, rose during the third quarter. "Our commitment to low fares will bring more travel opportunities to the area, whether it be a family theme park vacation or last-minute beach getaway," the company said in a statement.
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American Airlines ( AAL ) on Tuesday said it will add seasonal service between Dallas and Iceland, while ultra-low-cost carrier Spirit Airlines ( SAVE ) announced new service from Richmond, Va., to Orlando and Fort Lauderdale, Fla. [ibd-display-video id=2642056 width=50 float=left autostart=true] The announcements come as American and legacy rivals Delta Air Lines ( DAL ) and United Airlines ( UAL ) look for ways to compete against budget long-haul carriers in Europe, and as Spirit positions itself for Spring Break. Spirit, meanwhile, said it would begin daily, nonstop service from Richmond International Airport to Orlando International Airport and Fort Lauderdale-Hollywood International Airport on March 15. American Signals Higher '18 Capacity; Another Carrier Warns On Costs United Airlines Dives On Disastrous Earnings Call; Rival Carriers Fall Will Delta Air Lines' Spat With Boeing Weigh On Massive Plane Order?
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American Airlines ( AAL ) on Tuesday said it will add seasonal service between Dallas and Iceland, while ultra-low-cost carrier Spirit Airlines ( SAVE ) announced new service from Richmond, Va., to Orlando and Fort Lauderdale, Fla. [ibd-display-video id=2642056 width=50 float=left autostart=true] The announcements come as American and legacy rivals Delta Air Lines ( DAL ) and United Airlines ( UAL ) look for ways to compete against budget long-haul carriers in Europe, and as Spirit positions itself for Spring Break. The move would pit American against WOW air, a low-cost, long-haul carrier in Iceland that also offers flights between those two airports. American Signals Higher '18 Capacity; Another Carrier Warns On Costs United Airlines Dives On Disastrous Earnings Call; Rival Carriers Fall Will Delta Air Lines' Spat With Boeing Weigh On Massive Plane Order?
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American Airlines ( AAL ) on Tuesday said it will add seasonal service between Dallas and Iceland, while ultra-low-cost carrier Spirit Airlines ( SAVE ) announced new service from Richmond, Va., to Orlando and Fort Lauderdale, Fla. [ibd-display-video id=2642056 width=50 float=left autostart=true] The announcements come as American and legacy rivals Delta Air Lines ( DAL ) and United Airlines ( UAL ) look for ways to compete against budget long-haul carriers in Europe, and as Spirit positions itself for Spring Break. The move would pit American against WOW air, a low-cost, long-haul carrier in Iceland that also offers flights between those two airports. During its third-quarter earnings call last month, American said that unit revenue in the trans-Atlantic market, where competition from European discounters is intense, rose during the third quarter.
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7272.0
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2017-11-14 00:00:00 UTC
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JetBlue Airways' October Traffic Rises, Load Factor Falls
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AAL
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https://www.nasdaq.com/articles/jetblue-airways-october-traffic-rises-load-factor-falls-2017-11-14
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nan
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nan
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JetBlue Airways CorporationJBLU posted a substantial rise in air traffic for October. Traffic - measured in revenue passenger miles (RPMs) - improved 3.7% year over year to 3.7 billion. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) expanded 6.8% to 4.5 billion.
Load factor or percentage of seats filled by passengers decreased 240 basis points (bps) to 82.4% in the month as capacity expansion outpaced traffic growth.
The Long Island City, NY-based low-cost carrier registered a completion factor (system wide) of 97.8% in the month with 79.5% flights on schedule.
On a year-to-date basis, the carrier posted a 3.7% rise in RPMs while ASMs rose 4.5%, both on a year-over-year basis. Load factor fell 70 bps year over year to 84.5%.
JetBlue maintains its projection for revenues per available seat mile (RASM) in the fourth quarter of 2017 at the range of a decline of 3% to flat year over year. This is inclusive of the effects of hurricanes by one to two percentage points.
The carrier recently reported third-quarter 2017 earnings numbers. JetBlue's earnings of 55 cents per share surpassed the Zacks Consensus Estimate by 3 cents. The bottom line, however, declined 5.2% from the year-ago figure due to higher costs. The recent hurricanes also hurt results. Operating revenues came in at $1,813 million, just ahead of the Zacks Consensus Estimate of $1,809.3 million. The top line also increased 4.7% from the year-ago figure.
Key airline players like United Continental Holdings UAL and American Airlines AAL have also recently reported third-quarter earnings numbers.
JetBlue Airways Corporation Price
JetBlue Airways Corporation Price | JetBlue Airways Corporation Quote
Zacks Rank & Key Pick
JetBlue carries a Zacks Rank #5 (Strong Sell).
A better-ranked stock in the airline space is International Consolidated Airlines Group SA ICAGY , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Shares of International Consolidated Airlines have surged more than 34% in a year.
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JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
International Consolidated Airlines Group SA (ICAGY): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Key airline players like United Continental Holdings UAL and American Airlines AAL have also recently reported third-quarter earnings numbers. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report International Consolidated Airlines Group SA (ICAGY): Free Stock Analysis Report To read this article on Zacks.com click here. JetBlue Airways CorporationJBLU posted a substantial rise in air traffic for October.
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Key airline players like United Continental Holdings UAL and American Airlines AAL have also recently reported third-quarter earnings numbers. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report International Consolidated Airlines Group SA (ICAGY): Free Stock Analysis Report To read this article on Zacks.com click here. JetBlue Airways Corporation Price JetBlue Airways Corporation Price | JetBlue Airways Corporation Quote Zacks Rank & Key Pick JetBlue carries a Zacks Rank #5 (Strong Sell).
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Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report International Consolidated Airlines Group SA (ICAGY): Free Stock Analysis Report To read this article on Zacks.com click here. Key airline players like United Continental Holdings UAL and American Airlines AAL have also recently reported third-quarter earnings numbers. JetBlue maintains its projection for revenues per available seat mile (RASM) in the fourth quarter of 2017 at the range of a decline of 3% to flat year over year.
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Key airline players like United Continental Holdings UAL and American Airlines AAL have also recently reported third-quarter earnings numbers. Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report International Consolidated Airlines Group SA (ICAGY): Free Stock Analysis Report To read this article on Zacks.com click here. Load factor or percentage of seats filled by passengers decreased 240 basis points (bps) to 82.4% in the month as capacity expansion outpaced traffic growth.
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7273.0
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2017-11-09 00:00:00 UTC
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American Airlines Group, Inc. (AAL) Ex-Dividend Date Scheduled for November 10, 2017
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AAL
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https://www.nasdaq.com/articles/american-airlines-group-inc-aal-ex-dividend-date-scheduled-november-10-2017-2017-11-09
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nan
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nan
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American Airlines Group, Inc. ( AAL ) will begin trading ex-dividend on November 10, 2017. A cash dividend payment of $0.1 per share is scheduled to be paid on November 27, 2017. Shareholders who purchased AAL prior to the ex-dividend date are eligible for the cash dividend payment. This marks the 14th quarter that AAL has paid the same dividend. At the current stock price of $46.37, the dividend yield is .86%.
The previous trading day's last sale of AAL was $46.37, representing a -14.89% decrease from the 52 week high of $54.48 and a 18.26% increase over the 52 week low of $39.21.
AAL is a part of the Transportation sector, which includes companies such as FedEx Corporation ( FDX ) and Delta Air Lines, Inc. ( DAL ). AAL's current earnings per share, an indicator of a company's profitability, is $3.93. Zacks Investment Research reports AAL's forecasted earnings growth in 2017 as -18.78%, compared to an industry average of 5.8%.
For more information on the declaration, record and payment dates, visit the AAL Dividend History page. Our Dividend Calendar has the full list of stocks that have an ex-dividend today.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Shareholders who purchased AAL prior to the ex-dividend date are eligible for the cash dividend payment. AAL is a part of the Transportation sector, which includes companies such as FedEx Corporation ( FDX ) and Delta Air Lines, Inc. ( DAL ). Zacks Investment Research reports AAL's forecasted earnings growth in 2017 as -18.78%, compared to an industry average of 5.8%.
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AAL's current earnings per share, an indicator of a company's profitability, is $3.93. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. American Airlines Group, Inc. ( AAL ) will begin trading ex-dividend on November 10, 2017.
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Shareholders who purchased AAL prior to the ex-dividend date are eligible for the cash dividend payment. This marks the 14th quarter that AAL has paid the same dividend. For more information on the declaration, record and payment dates, visit the AAL Dividend History page.
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Shareholders who purchased AAL prior to the ex-dividend date are eligible for the cash dividend payment. American Airlines Group, Inc. ( AAL ) will begin trading ex-dividend on November 10, 2017. This marks the 14th quarter that AAL has paid the same dividend.
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7274.0
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2017-11-09 00:00:00 UTC
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Here's the Best Dividend Stock in Airlines
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AAL
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https://www.nasdaq.com/articles/heres-best-dividend-stock-airlines-2017-11-09
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nan
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nan
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The American economy is still buoyant and people are traveling, trends that continue to boost growth in the U.S. airline industry despite a recent uptick in fuel prices.
The business has never been known as a fruitful source of shareholder dividends, but thanks to this success, the situation has changed -- more are inclined to hand out dividends to their investors. It nearly goes without saying that not all are created equal; here's the airline sector payout that I think flies above the rest.
Flying in tight formation
The dividend-paying carriers traded on U.S. stock exchanges generally tended to pay out at around the same rate well into 2017. At least they did until Delta Air Lines (NYSE: DAL) and Panama's Copa Holdings hiked their payouts. Now, Delta's yields 2.4%, and Copa weighs in at 2.5%. Behind them, Alaska Air Group (NYSE: ALK) and China Southern Airlines both yield just under 2%.
A bit down the ladder is Hawaiian Holdings , which recently initiated a 1.4% dividend. The low end belongs to the sub-1% yields of American Airlines Group and Southwest .
Hawaiian's payout is too new to be reliable, while those of American and Southwest are too low to make the cut as best dividend stock (no matter the other positive qualities both companies possess). Meanwhile, Latin American economies have a history of being volatile, which would dampen my enthusiasm for Copa Holdings.
As for China Southern, it's a profitable operator in a market full of people hungry to travel. Competition is intensifying in the country, though, and higher costs are biting into the company's bottom line. As such, it's not a strong candidate for the best dividend prize.
That leaves the two U.S. airlines: Delta and Alaska.
Consolidation and growth
Of the pair, Alaska is the company bulking up. Last year, it acquired Virgin America in a deal valued at $2.6 billion, boosting its already strong lineup of West Coast routes.
It also added considerably to the top line. In Alaska's Q3, revenue shot up by 35% on a year-over-year basis thanks largely to the consolidation of Virgin America. The company's adjusted operating profit, by contrast, declined at a 13% clip, while its free cash flow turned negative.
This can be traced to Alaska's performance in California, a competitive market with pricing pressure on a number of popular routes. In the near future, Alaska is likely to eliminate some capacity on the less-busy circuits, which, if done effectively, should goose FCF and the bottom line. In other words, the airline is in consolidation mode, so it might be some time before those fundamentals improve significantly.
Delta has had its struggles recently, most prominently the natural disasters that plagued its home region of the Southeast U.S. In spite of that, the resilient company's Q3 results were encouraging, with revenue growth approaching 6%, the strongest showing in several years. Growth in the Latin American market helped, as did the take from the Delta SkyMiles frequent flyer program.
As a result, adjusted operating profit didn't crater as much as it might have, given those headwinds. At the end of the day, it slipped by under 10% on a year-over-year basis.
Going forward, it seems that continued strength in fuel prices (typically an airline's No. 2 cost item) will keep dampening profitability in the near future. On the plus side, Delta is anticipating 2% to 4% growth in passenger unit revenue, on the back of anticipated growth in its key revenue sources, and an approximate 2% expansion in capacity.
And the winner is...
Basically what we have is one airline that's still digesting a recent acquisition, and a more established operator showing good signs of growth. Of the two, I feel the latter currently has a better chance of improving its profitability and cash flow once 2018 rolls around. This, by extension, should provide the resources to at least maintain, if not increase, the dividend. So, my choice for best airline dividend stock is Delta.
10 stocks we like better than Delta Air Lines
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*Stock Advisor returns as of October 9, 2017
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Copa Holdings. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The American economy is still buoyant and people are traveling, trends that continue to boost growth in the U.S. airline industry despite a recent uptick in fuel prices. Hawaiian's payout is too new to be reliable, while those of American and Southwest are too low to make the cut as best dividend stock (no matter the other positive qualities both companies possess). Last year, it acquired Virgin America in a deal valued at $2.6 billion, boosting its already strong lineup of West Coast routes.
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At least they did until Delta Air Lines (NYSE: DAL) and Panama's Copa Holdings hiked their payouts. Behind them, Alaska Air Group (NYSE: ALK) and China Southern Airlines both yield just under 2%. As a result, adjusted operating profit didn't crater as much as it might have, given those headwinds.
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Hawaiian's payout is too new to be reliable, while those of American and Southwest are too low to make the cut as best dividend stock (no matter the other positive qualities both companies possess). So, my choice for best airline dividend stock is Delta. 10 stocks we like better than Delta Air Lines When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen.
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At least they did until Delta Air Lines (NYSE: DAL) and Panama's Copa Holdings hiked their payouts. In Alaska's Q3, revenue shot up by 35% on a year-over-year basis thanks largely to the consolidation of Virgin America. So, my choice for best airline dividend stock is Delta.
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7275.0
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2017-11-07 00:00:00 UTC
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Why American Airlines' Share Buybacks Are Slowing Down
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AAL
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https://www.nasdaq.com/articles/why-american-airlines-share-buybacks-are-slowing-down-2017-11-07
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nan
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nan
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During 2015 and 2016, American Airlines (NASDAQ: AAL) set itself apart from its peers in the airline industry by repurchasing an enormous amount of stock. As a result, the company has reduced its share count by a stunning 37% since the middle of 2014.
However, American's share repurchase activity has declined to a more moderate level during 2017. Furthermore, while American Airlines is on track to post stronger free cash flow in 2018, the company may need to reduce its buyback activity even further in the coming year.
American Airlines Stock Buybacks (Quarterly) , data by YCharts .
A buyback machine
Beginning in late 2014, profitability surged at American Airlines as oil prices fell. However, while American's stock price initially moved higher, the stock gave back some of its gains beginning in mid-2015. This encouraged management to start repurchasing stock at a phenomenal rate . The company spent more than $3.8 billion on buybacks in 2015 and $4.5 billion in 2016.
American Airlines' share repurchases have been particularly notable because the company hasn't generated much free cash flow in recent years. While operating cash flow skyrocketed as oil prices fell, American Airlines has been spending heavily to update its fleet. This capital spending has soaked up virtually all of the company's cash from operations.
American Airlines Cash from Operations (TTM) , data by YCharts .
American Airlines has pulled off this combination of big share buybacks and heavy capital spending by borrowing extensively to fund its aircraft purchases. CEO Doug Parker views this as a wise move, because of the low cost of debt and American's somewhat depressed share price. Parker believes that it's reasonable for American to have more debt than its competitors, because it has a younger and more valuable fleet.
Operating cash flow is falling -- but free cash flow could rebound
Unfortunately for American Airlines shareholders, the company's operating cash flow is falling, because of runaway cost increases . Through the first nine months of 2017, American generated operating cash flow of $4.3 billion, down 27% from $5.9 billion in the same period of 2016.
This largely explains why the company reduced its share buybacks to $1.4 billion in the first nine months of 2017, from $3.9 billion in the first nine months of 2016. However, some analysts think the share buyback activity could accelerate again in 2018.
This hope is pinned on the fact that American Airlines plans to reduce capex to $3.2 billion next year, compared with about $5.7 billion in 2017. That should push free cash flow back into positive territory, even if operating cash flow doesn't improve much.
Debt repayments could trump share buybacks
Even though free cash flow is set to improve next year, it may not lead to higher share buyback activity. Instead, American Airlines may need to devote the bulk of its available cash to debt repayments in 2018 -- and beyond.
By financing the bulk of its aircraft purchases over the past few years, American Airlines has effectively agreed to pay off the cost over time. That bill is coming due: American's scheduled debt repayments for 2018 total $2.5 billion. This isn't a one-off situation, either. The company's debt maturities average more than $3 billion annually between 2018 and 2021.
Even if American Airlines continues to finance about 75% of the cost of its aircraft purchases, it would reduce its net debt by more than $1 billion just by paying off its scheduled debt maturities next year. That would soak up a large majority of its free cash flow, unless American posts much stronger earnings growth than what most analysts currently expect.
American Airlines will also need nearly $200 million to pay its dividend next year. While the company has been drawing down its cash balance to fund share buybacks this year, it is on track to end 2017 with no more than $1 billion of excess liquidity above its $7 billion target -- even if it goes cold-turkey on share buybacks in the fourth quarter.
In short, American Airlines' multi-year run of large share repurchases is probably coming to an end. For the foreseeable future, American will need to focus on paying off the debt it incurred to finance its share-buyback spree of the past few years.
10 stocks we like better than American Airlines Group
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and American Airlines Group wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of October 9, 2017
Adam Levine-Weinberg has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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During 2015 and 2016, American Airlines (NASDAQ: AAL) set itself apart from its peers in the airline industry by repurchasing an enormous amount of stock. Furthermore, while American Airlines is on track to post stronger free cash flow in 2018, the company may need to reduce its buyback activity even further in the coming year. American Airlines has pulled off this combination of big share buybacks and heavy capital spending by borrowing extensively to fund its aircraft purchases.
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During 2015 and 2016, American Airlines (NASDAQ: AAL) set itself apart from its peers in the airline industry by repurchasing an enormous amount of stock. Furthermore, while American Airlines is on track to post stronger free cash flow in 2018, the company may need to reduce its buyback activity even further in the coming year. While operating cash flow skyrocketed as oil prices fell, American Airlines has been spending heavily to update its fleet.
|
During 2015 and 2016, American Airlines (NASDAQ: AAL) set itself apart from its peers in the airline industry by repurchasing an enormous amount of stock. Furthermore, while American Airlines is on track to post stronger free cash flow in 2018, the company may need to reduce its buyback activity even further in the coming year. American Airlines' share repurchases have been particularly notable because the company hasn't generated much free cash flow in recent years.
|
During 2015 and 2016, American Airlines (NASDAQ: AAL) set itself apart from its peers in the airline industry by repurchasing an enormous amount of stock. Furthermore, while American Airlines is on track to post stronger free cash flow in 2018, the company may need to reduce its buyback activity even further in the coming year. That should push free cash flow back into positive territory, even if operating cash flow doesn't improve much.
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7276.0
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2017-11-07 00:00:00 UTC
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Will Delta Air Lines' Spat With Boeing Weigh On Massive Plane Order?
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AAL
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https://www.nasdaq.com/articles/will-delta-air-lines-spat-boeing-weigh-massive-plane-order-2017-11-07
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nan
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nan
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In 2011, Delta Air Lines ( DAL ) brought both Boeing ( BA ) and Airbus ( EADSY ) sales representatives into its headquarters in Atlanta to hear pitches for why it should order Boeing's narrow-body, midrange 737-900 or Airbus' A321 to replace similar-size jets in its fleet. After months of negotiations, according to "Glory Lost and Found," a book containing an account of the talks, Delta's decision came down to a single thing: toilets.
[ibd-display-video id=2533216 width=50 float=left autostart=true] At the last minute, Boeing told Delta it would throw in new, space-saving toilets, according to the book. The lavatories were slim enough to allow room for a few extra seats in the cabin, which meant a few more passengers and a perhaps bit more profit.
As Delta reportedly weighs a new purchase that pits Boeing and Airbus against one another, Boeing might need a better pitch than, you know, "Wait, we have skinnier toilets!" The airline is mulling an order for up to 100 aircraft, worth as much as $12.7 billion, with an option to buy 100 more, according to Bloomberg .
Delta, which is in advanced discussions over the matter, will likely decide by the end of this year whether it will choose to order smaller, single-aisle A320s from Airbus or 737s from Boeing, the report said.
But Delta's decision will come as things grow more tense between the carrier and Boeing. The U.S. Commerce Department has decided to impose preliminary tariffs of around 300% on Canadian jet-maker Bombardier's C Series planes, a medium-range narrow-body jet with 100-plus seats that Delta has ordered. The tariffs followed complaints from Boeing that Bombardier gets support from Canada's government that makes competition unfair.
"Delta can use what happened with the C Series as a way to say to Boeing, if you want to get back in our good graces, you might have to give us even a better deal than we would have required before," said Seth Kaplan, managing partner at Airline Weekly and a co-author of "Glory Lost and Found," a book about Delta.
The airline industry's merger wave has intensified competitions. The string of mergers that created Delta, United Airlines ( UAL ) and American Airlines ( AAL ) as they exist today resulted in mixed fleets under the same carrier, with each megadeal combining an airline that had a big Boeing narrow-body fleet with an airline that had a big Airbus narrow-body fleet, Kaplan noted.
Instead of sticking to exclusive pacts, the sense among the airline industry today is that airlines can get a better deal if they let Boeing and Airbus fight it out.
Shares of Boeing closed 0.8% higher on the stock market today , while Airbus retreated 0.8%, and Delta dropped 1.3%.
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As the companies jockey for an edge, the spat over the C Series is still fresh. Delta management, on its third-quarter earnings call last month, said "we will not pay any tariffs" on the jets, which the carrier said it would still take.
Boeing CEO Dennis Muilenburg, meanwhile, when asked about the matter, said on its earnings call that "Delta is a very important customer to us."
He added: "We want to continue to work with them and support them for the future. So these are not actions that are targeted at customers or countries. These are matters of fair trade. We are happy to compete. We just want everybody to play by the same rules."
Airbus' recent decision to take a majority stake in the C Series business, giving that company a fresh product line to market, has added a new wrinkle to the dispute.
Cowen analysts, in a research note dated Tuesday, called Airbus' position in the Bombardier C Series a "win-win" for both companies.
While it said the move represents a "validation of the 100-150 seat market," it also said the market size for the jet was "unclear, and it will face stiff competition from Boeing & Embraer."
But they added: "We don't anticipate Delta will pay tariffs on the aircraft because Boeing currently does not have a competitive product."
It's unclear right now whether Boeing benefits from Airbus' move, which removes an independent competitor from the game. But for now, Airbus has a lot more planes and Delta a few more misgivings about Boeing.
"I think Boeing understands it's just time to move past that," Kaplan said.
RELATED:
Boeing Reportedly Mulls 767 Passenger-Jet Reboot As '797' Looms
This Is How Boeing Could Get Squeezed By Airbus, Bombardier
Delta Air Lines Sees Turnaround In Crucial, Highly Competitive Market
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The string of mergers that created Delta, United Airlines ( UAL ) and American Airlines ( AAL ) as they exist today resulted in mixed fleets under the same carrier, with each megadeal combining an airline that had a big Boeing narrow-body fleet with an airline that had a big Airbus narrow-body fleet, Kaplan noted. Delta, which is in advanced discussions over the matter, will likely decide by the end of this year whether it will choose to order smaller, single-aisle A320s from Airbus or 737s from Boeing, the report said. The U.S. Commerce Department has decided to impose preliminary tariffs of around 300% on Canadian jet-maker Bombardier's C Series planes, a medium-range narrow-body jet with 100-plus seats that Delta has ordered.
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The string of mergers that created Delta, United Airlines ( UAL ) and American Airlines ( AAL ) as they exist today resulted in mixed fleets under the same carrier, with each megadeal combining an airline that had a big Boeing narrow-body fleet with an airline that had a big Airbus narrow-body fleet, Kaplan noted. Airbus' recent decision to take a majority stake in the C Series business, giving that company a fresh product line to market, has added a new wrinkle to the dispute. Boeing Reportedly Mulls 767 Passenger-Jet Reboot As '797' Looms This Is How Boeing Could Get Squeezed By Airbus, Bombardier Delta Air Lines Sees Turnaround In Crucial, Highly Competitive Market The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The string of mergers that created Delta, United Airlines ( UAL ) and American Airlines ( AAL ) as they exist today resulted in mixed fleets under the same carrier, with each megadeal combining an airline that had a big Boeing narrow-body fleet with an airline that had a big Airbus narrow-body fleet, Kaplan noted. In 2011, Delta Air Lines ( DAL ) brought both Boeing ( BA ) and Airbus ( EADSY ) sales representatives into its headquarters in Atlanta to hear pitches for why it should order Boeing's narrow-body, midrange 737-900 or Airbus' A321 to replace similar-size jets in its fleet. Boeing Reportedly Mulls 767 Passenger-Jet Reboot As '797' Looms This Is How Boeing Could Get Squeezed By Airbus, Bombardier Delta Air Lines Sees Turnaround In Crucial, Highly Competitive Market The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The string of mergers that created Delta, United Airlines ( UAL ) and American Airlines ( AAL ) as they exist today resulted in mixed fleets under the same carrier, with each megadeal combining an airline that had a big Boeing narrow-body fleet with an airline that had a big Airbus narrow-body fleet, Kaplan noted. After months of negotiations, according to "Glory Lost and Found," a book containing an account of the talks, Delta's decision came down to a single thing: toilets. The U.S. Commerce Department has decided to impose preliminary tariffs of around 300% on Canadian jet-maker Bombardier's C Series planes, a medium-range narrow-body jet with 100-plus seats that Delta has ordered.
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7277.0
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2017-11-05 00:00:00 UTC
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United Continental Is Forging Ahead With a Bizarre Plan to Grow in Los Angeles
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AAL
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https://www.nasdaq.com/articles/united-continental-forging-ahead-bizarre-plan-grow-los-angeles-2017-11-05
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nan
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nan
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Los Angeles International Airport (also known as LAX) is unique among American airports. Most big hubs have one or two dominant airlines. But LAX is a major base of operations for each of the five largest airlines in the U.S. This has led to epic congestion there -- and a brutal competitive environment.
A few years ago, United Continental (NYSE: UAL) was the largest carrier in Los Angeles, but it has slimmed down since then. Meanwhile, American Airlines (NASDAQ: AAL) and Delta Air Lines (NYSE: DAL) have expanded significantly at LAX, becoming the top two carriers there.
However, United's new leadership team now appears determined to grow again in Los Angeles. This bizarre decision is likely to cause further profit erosion for the company.
What United Continental wants to do
After years of gradually trimming its schedule in Los Angeles, United has returned to growth this fall. In late October, the carrier began operating one of the longest routes in the world: a nonstop flight between Los Angeles and Singapore. Next month, United will add extra flights on routes between Los Angeles and several destinations in Hawaii.
In 2018, United plans to continue its growth at LAX by adding more short-haul flights. Cities under consideration for new routes include Eugene, Medford, and Portland in Oregon and Spokane in Washington. "The key to making Los Angeles work is really having lots of connectivity and feed here," said company president Scott Kirby at an employee meeting in late September.
Kirby claims that United earns higher margins in Los Angeles than Delta and American, even though it is the least profitable on a global basis. Clearly, he believes that the carrier can build on its success in Los Angeles by facilitating more connections there.
Why the plan makes no sense
Even if it's true that United Continental is more profitable than American Airlines and Delta Air Lines in Los Angeles, this can probably be traced to the latter two carriers' aggressive growth there. New routes tend to be less profitable initially, while adding new markets can spark price wars with the airlines already serving those routes.
Thus, United's profitability at LAX could deteriorate rapidly once it starts to grow. Furthermore, United only has preferential rights to 22 gates in Los Angeles. The company will have to spend a huge amount of money on a new terminal if it wants to continue expanding.
More broadly, expanding in Los Angeles makes no strategic sense for United Continental, which operates a much larger hub a little more than 300 miles away in San Francisco. According to the company, United operates 273 daily departures in San Francisco, where it has access to dozens of gates. By contrast, it has just 138 daily departures from Los Angeles.
Maximizing the number of connecting opportunities is critical to profitability in a hub-and-spoke model. United's management is drawing the wrong conclusion from this general rule. Even if United adds 50-100 flights in Los Angeles, LAX will still be an undersized hub. To make matters worse, this growth could easily spark a price war with American and Delta.
Cannibalizing a better hub
For the past few years, I have firmly believed that United Continental ought to shrink in Los Angeles while growing aggressively in San Francisco. Unlike LAX, San Francisco has the potential to become an enormously successful connecting hub.
Unfortunately, United appears to be moving in a different direction. It already serves virtually every destination it might add from LAX with flights from San Francisco. By growing in Los Angeles, United will primarily steal connecting traffic from its own hub in San Francisco.
In a best case scenario, United Continental's upcoming growth in Los Angeles will make its LAX hub even more profitable, with a modest negative impact on the carrier's San Francisco hub. But the worst case scenario could be disastrous: Growth in Los Angeles could lead to lower profit margins there while also torpedoing the San Francisco hub's profitability. Based on United's track record, investors shouldn't feel good about the company's odds of success.
10 stocks we like better than United Continental Holdings
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and United Continental Holdings wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of October 9, 2017
Adam Levine-Weinberg owns shares of Delta Air Lines. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Meanwhile, American Airlines (NASDAQ: AAL) and Delta Air Lines (NYSE: DAL) have expanded significantly at LAX, becoming the top two carriers there. "The key to making Los Angeles work is really having lots of connectivity and feed here," said company president Scott Kirby at an employee meeting in late September. Why the plan makes no sense Even if it's true that United Continental is more profitable than American Airlines and Delta Air Lines in Los Angeles, this can probably be traced to the latter two carriers' aggressive growth there.
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Meanwhile, American Airlines (NASDAQ: AAL) and Delta Air Lines (NYSE: DAL) have expanded significantly at LAX, becoming the top two carriers there. Why the plan makes no sense Even if it's true that United Continental is more profitable than American Airlines and Delta Air Lines in Los Angeles, this can probably be traced to the latter two carriers' aggressive growth there. According to the company, United operates 273 daily departures in San Francisco, where it has access to dozens of gates.
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Meanwhile, American Airlines (NASDAQ: AAL) and Delta Air Lines (NYSE: DAL) have expanded significantly at LAX, becoming the top two carriers there. Why the plan makes no sense Even if it's true that United Continental is more profitable than American Airlines and Delta Air Lines in Los Angeles, this can probably be traced to the latter two carriers' aggressive growth there. More broadly, expanding in Los Angeles makes no strategic sense for United Continental, which operates a much larger hub a little more than 300 miles away in San Francisco.
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Meanwhile, American Airlines (NASDAQ: AAL) and Delta Air Lines (NYSE: DAL) have expanded significantly at LAX, becoming the top two carriers there. Why the plan makes no sense Even if it's true that United Continental is more profitable than American Airlines and Delta Air Lines in Los Angeles, this can probably be traced to the latter two carriers' aggressive growth there. By growing in Los Angeles, United will primarily steal connecting traffic from its own hub in San Francisco.
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7278.0
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2017-11-03 00:00:00 UTC
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Analysts Anticipate 12% Upside For QQEW
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AAL
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https://www.nasdaq.com/articles/analysts-anticipate-12-upside-qqew-2017-11-03
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nan
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nan
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Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel , we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the First Trust NASDAQ-100 Equal Weighted Index Fund ETF (Symbol: QQEW), we found that the implied analyst target price for the ETF based upon its underlying holdings is $62.64 per unit.
With QQEW trading at a recent price near $55.85 per unit, that means that analysts see 12.16% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of QQEW's underlying holdings with notable upside to their analyst target prices are American Airlines Group Inc (Symbol: AAL), Akamai Technologies Inc (Symbol: AKAM), and KLA-Tencor Corp. (Symbol: KLAC). Although AAL has traded at a recent price of $47.36/share, the average analyst target is 18.95% higher at $56.33/share. Similarly, AKAM has 13.85% upside from the recent share price of $52.29 if the average analyst target price of $59.53/share is reached, and analysts on average are expecting KLAC to reach a target price of $121.00/share, which is 13.74% above the recent price of $106.38. Below is a twelve month price history chart comparing the stock performance of AAL, AKAM, and KLAC:
Below is a summary table of the current analyst target prices discussed above:
Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have a valid justification for their targets, or are they behind the curve on recent company and industry developments? A high price target relative to a stock's trading price can reflect optimism about the future, but can also be a precursor to target price downgrades if the targets were a relic of the past. These are questions that require further investor research.
10 ETFs With Most Upside To Analyst Targets »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Although AAL has traded at a recent price of $47.36/share, the average analyst target is 18.95% higher at $56.33/share. Below is a twelve month price history chart comparing the stock performance of AAL, AKAM, and KLAC: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of QQEW's underlying holdings with notable upside to their analyst target prices are American Airlines Group Inc (Symbol: AAL), Akamai Technologies Inc (Symbol: AKAM), and KLA-Tencor Corp. (Symbol: KLAC).
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Three of QQEW's underlying holdings with notable upside to their analyst target prices are American Airlines Group Inc (Symbol: AAL), Akamai Technologies Inc (Symbol: AKAM), and KLA-Tencor Corp. (Symbol: KLAC). Although AAL has traded at a recent price of $47.36/share, the average analyst target is 18.95% higher at $56.33/share. Below is a twelve month price history chart comparing the stock performance of AAL, AKAM, and KLAC: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now?
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Below is a twelve month price history chart comparing the stock performance of AAL, AKAM, and KLAC: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of QQEW's underlying holdings with notable upside to their analyst target prices are American Airlines Group Inc (Symbol: AAL), Akamai Technologies Inc (Symbol: AKAM), and KLA-Tencor Corp. (Symbol: KLAC). Although AAL has traded at a recent price of $47.36/share, the average analyst target is 18.95% higher at $56.33/share.
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Below is a twelve month price history chart comparing the stock performance of AAL, AKAM, and KLAC: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of QQEW's underlying holdings with notable upside to their analyst target prices are American Airlines Group Inc (Symbol: AAL), Akamai Technologies Inc (Symbol: AKAM), and KLA-Tencor Corp. (Symbol: KLAC). Although AAL has traded at a recent price of $47.36/share, the average analyst target is 18.95% higher at $56.33/share.
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7279.0
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2017-11-01 00:00:00 UTC
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American Airlines (AAL) Stock Climbs On JPM Upgrade
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AAL
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https://www.nasdaq.com/articles/american-airlines-aal-stock-climbs-jpm-upgrade-2017-11-01
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nan
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nan
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Less than a week after American Airlines AAL posted third-quarter earnings that led to a major sell-off, shares of the airline popped on Wednesday following an upgrade from JPMorgan Chase JPM .
Last week, American Airlines posted a narrow earnings beat and announced that its profits were undercut by a large amount of tropical storm-related flight cancellations. Hurricanes Harvey, Irma, and Maria forced the airline to cancel 8,000 flights in its third-quarter. This cost the airline millions and helped cause its bottom-line to sink almost 10% year-over-year.
Shares of American Airlines have tanked roughly 11% since it posted its Q3 earnings last week.
Still, despite all of the cancelations, there were some positive signs for American Airlines. For one, the company's revenues popped 2.7% to hit $10.88 billion. On top of that, total revenue per available seat mile rose as well. What's more, cargo revenue soared 17%.
Looking ahead, the airline company now expects fourth-quarter TRASM to grow between 2.5% and 4.5% year-over-year, driven in large part by improved demand for business and leisure travel.
"Despite the significant operational challenges posed by three hurricanes, our team delivered solid financial results," CEO Doug Parker said in a statement.
Now, JPMorgan is trying to pump the breaks on the big American Airlines sell-off. The firm upgraded the stock to "Overweight" and upped its price target from $53 per share to $65 per share. JPMorgan's new price target would mark over a 38% premium from American Airline's Tuesday closing price.
"Following what we view as an overdone correction in American Airlines shares after third-quarter earnings season, we view the risk-to-reward in American Airlines as attractive," JPMorgan analyst Jamie Baker wrote in a note to clients.
Shares of American Airlines popped over 2% on Wednesday following the JPMorgan upgrade. However, the world's biggest airline by passenger traffic still sits over 13% below its 52-week high as investors worry that competition from low-cost airlines could continue to drive down profit margins.
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American Airlines Group, Inc. (AAL): Free Stock Analysis Report
J P Morgan Chase & Co (JPM): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Less than a week after American Airlines AAL posted third-quarter earnings that led to a major sell-off, shares of the airline popped on Wednesday following an upgrade from JPMorgan Chase JPM . Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report J P Morgan Chase & Co (JPM): Free Stock Analysis Report To read this article on Zacks.com click here. Last week, American Airlines posted a narrow earnings beat and announced that its profits were undercut by a large amount of tropical storm-related flight cancellations.
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Less than a week after American Airlines AAL posted third-quarter earnings that led to a major sell-off, shares of the airline popped on Wednesday following an upgrade from JPMorgan Chase JPM . Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report J P Morgan Chase & Co (JPM): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Less than a week after American Airlines AAL posted third-quarter earnings that led to a major sell-off, shares of the airline popped on Wednesday following an upgrade from JPMorgan Chase JPM . Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report J P Morgan Chase & Co (JPM): Free Stock Analysis Report To read this article on Zacks.com click here. "Following what we view as an overdone correction in American Airlines shares after third-quarter earnings season, we view the risk-to-reward in American Airlines as attractive," JPMorgan analyst Jamie Baker wrote in a note to clients.
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Less than a week after American Airlines AAL posted third-quarter earnings that led to a major sell-off, shares of the airline popped on Wednesday following an upgrade from JPMorgan Chase JPM . Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report J P Morgan Chase & Co (JPM): Free Stock Analysis Report To read this article on Zacks.com click here. For one, the company's revenues popped 2.7% to hit $10.88 billion.
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7280.0
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2017-10-31 00:00:00 UTC
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Why American Airlines Group, Inc. Stock Keeps Sinking
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AAL
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https://www.nasdaq.com/articles/why-american-airlines-group-inc-stock-keeps-sinking-2017-10-31
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nan
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nan
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Last Thursday, American Airlines (NASDAQ: AAL) reported a third-quarter profit that was slightly higher than what analysts were expecting. The company's fourth-quarter margin forecast also came in ahead of analysts' expectations.
Nevertheless, American Airlines stock fell on the day of the earnings report, and it has continued sliding since then, falling well below its 52-week high. Here's why shares of the world's largest airline could continue to struggle.
American Airlines stock performance. Data by YCharts .
Profit set to sink again
Most U.S. airlines have faced margin pressure during 2017, due to a combination of rising fuel prices, higher labor costs, and a choppy unit revenue environment. However, American Airlines and United Continental (NYSE: UAL) have stood out from the pack -- in a bad way. Both carriers' pre-tax margins are on pace to fall back into single-digit territory on a full-year basis.
During the seasonally strong third quarter, American Airlines posted an adjusted pre-tax margin of 10.2%, down from 14% in the third quarter of 2016. Adjusted earnings per share fell to $1.42 from $1.76 a year earlier. This was near the bottom of the likely range I calculated from the company's initial forecast back in July.
Several major hurricanes struck the U.S. during the quarter, contributing to the earnings pressure. However, the combined impact of those storms was only $75 million, or about 0.7 percentage points of pre-tax margin.
Instead, cost creep was the main factor weighing on American's earnings. This has been an issue for several years now. American's nonfuel unit costs rose 4.5% year over year, excluding special items, while the average fuel price it paid rocketed higher by $0.19/gallon. In total, American Airlines reported a 5.9% increase in its adjusted unit costs.
The fourth-quarter outlook is equally bleak. American Airlines expects its adjusted non-fuel unit costs to increase by about 4.5% once again. Fuel costs are on pace to increase by $0.25-$0.30 on a year-over-year basis, due to a recent surge in oil prices . As a result, even though American projects that unit revenue will rise 2.5%-4.5% this quarter, its pretax margin will likely be just 4.5%-6.5%, down from 7.9% a year earlier.
The 2018 outlook: Rising costs and rising competition
For 2018, management has pledged to limit the increase in American's nonfuel unit costs to around 2%. This would be a big improvement over its latest trend. However, the recent rise in oil prices means that fuel costs could be up by another $0.20 per gallon or so on a full-year basis.
This means that American Airlines will likely need 3%-4% unit revenue growth next year just to keep its profit margin in line with this year's subpar result. To pull that off, management is turning to several initiatives outlined at American's recent investor day. Most notably, it is rolling out basic economy pricing and premium economy seating in order to more precisely cater to what different types of customers want.
That said, American Airlines will face fairly tough year-over-year unit revenue comparisons in 2018. Additionally, United Continental has instigated a price war in several key markets this year, which could potentially continue to spread. United just "re-banked" its Houston hub, which will help it compete for connecting traffic with American's nearby hub at Dallas-Fort Worth International Airport. United will also rebank its hub in Chicago next year, putting pressure on American's competing hub there.
Lastly, United is planning to grow in a number of markets in the near future, such as Hawaii and Los Angeles. More capacity almost always hurts unit revenue.
No promises from management
For the past couple of years, American Airlines CEO Doug Parker has repeatedly asserted that the U.S. airline industry has been transformed and will never lose money again. For American specifically, he says that pretax earnings will range from $3 billion-$7 billion, depending on factors like the business cycle and oil prices.
Based on its year-to-date results and fourth-quarter guidance, American Airlines will probably earn about $3.7 billion before tax in 2017 (excluding special items). Unless it can pull off stellar unit revenue growth of 6% or more next year, American will undershoot the midpoint of its long-term earnings guidance again in 2018.
Indeed, American Airlines executives stuck to their long-term target but made no promises about 2018 on the company's earnings call last week. This isn't very comforting for investors. Fuel prices remain low by historical standards, while the U.S. economy is growing at a nice clip in one of the longest periods of uninterrupted GDP growth in history. The external environment today could be as good as it gets for American Airlines.
Thus, it's reasonable to question American Airlines' ability to reach its long-term earnings goals. At 10 times earnings, the stock isn't very expensive. But considering the company's massive debt load and limited growth potential, American Airlines stock still doesn't look very attractive.
10 stocks we like better than American Airlines Group
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and American Airlines Group wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of October 9, 2017
Adam Levine-Weinberg has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Last Thursday, American Airlines (NASDAQ: AAL) reported a third-quarter profit that was slightly higher than what analysts were expecting. Profit set to sink again Most U.S. airlines have faced margin pressure during 2017, due to a combination of rising fuel prices, higher labor costs, and a choppy unit revenue environment. Fuel prices remain low by historical standards, while the U.S. economy is growing at a nice clip in one of the longest periods of uninterrupted GDP growth in history.
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Last Thursday, American Airlines (NASDAQ: AAL) reported a third-quarter profit that was slightly higher than what analysts were expecting. Profit set to sink again Most U.S. airlines have faced margin pressure during 2017, due to a combination of rising fuel prices, higher labor costs, and a choppy unit revenue environment. American's nonfuel unit costs rose 4.5% year over year, excluding special items, while the average fuel price it paid rocketed higher by $0.19/gallon.
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Last Thursday, American Airlines (NASDAQ: AAL) reported a third-quarter profit that was slightly higher than what analysts were expecting. American's nonfuel unit costs rose 4.5% year over year, excluding special items, while the average fuel price it paid rocketed higher by $0.19/gallon. American Airlines expects its adjusted non-fuel unit costs to increase by about 4.5% once again.
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Last Thursday, American Airlines (NASDAQ: AAL) reported a third-quarter profit that was slightly higher than what analysts were expecting. Profit set to sink again Most U.S. airlines have faced margin pressure during 2017, due to a combination of rising fuel prices, higher labor costs, and a choppy unit revenue environment. As a result, even though American projects that unit revenue will rise 2.5%-4.5% this quarter, its pretax margin will likely be just 4.5%-6.5%, down from 7.9% a year earlier.
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7281.0
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2017-10-31 00:00:00 UTC
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Will Airline ETF Crash on Subdued Q3 or Take Off on Value?
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AAL
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https://www.nasdaq.com/articles/will-airline-etf-crash-subdued-q3-or-take-value-2017-10-31
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nan
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nan
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The pure-play aviation ETF U.S. Global Jets ETF JETS lost about 4.7% in the last five days (as of Oct 27, 2017) on mixed earnings. Some recently released earnings couldn't live up to investors' expectations. Results were also hurt by the recent hurricanes. Below we highlight earnings in detail (see all Industrials ETFs here).
Q3 Results in Detail
Delta Air Lines Inc.DAL reported more than two weeks ago with a beat on both lines. Operating revenues of $11.06 billion surpassed the Zacks Consensus Estimate of $11.037 billion. Revenues increased 5.5% from the year-ago figure. The carrier's third-quarter earnings (excluding 7 cents from non-recurring items) of $1.57 per share beat the Zacks Consensus Estimate of $1.54. Earnings, however, declined 7.6% on a year-over-year basis due to higher costs. The company has a Zacks Rank #5 (Strong Sell) and a VGM Score of C.
United Continental HoldingsUAL reported better-than-expected results. Earnings (excluding 10 cents from non-recurring items) came in at $2.22 per share, beating the Zacks Consensus Estimate by 1.8%. Earnings were, however, 28.6% lower than the year-ago figure due to higher costs. Operating revenues of $9.878 billion were also marginally ahead of the Zacks Consensus Estimate of $9.857.3 billion. However, the top line shrunk 0.4% on a year-over-year basis. United Continental has a Zacks Rank #5 and a VGM Score of D.
Low cost carrier Southwest Airlines Co.LUV reported better-than-expected earnings but lower-than-expected revenues. The carrier's earnings per share (excluding 4 cents from non-recurring items) of 88 cents beat the Zacks Consensus Estimate of 87 cents. The bottom line however, declined 5.4% on a year-over-year basis.
Operating revenues of $5.271 billion lagged the Zacks Consensus Estimate of $5.297 billion. The top line, however, improved 2.6% year over year. Zacks Rank #4 (Sell) LUV has a VGM Score of B.
American Airlines Group Inc .'s AAL third-quarter 2017 earnings (excluding 14 cents from non-recurring items) of $1.42 per share surpassed the Zacks Consensus Estimate by 3 cents. Quarterly earnings declined significantly on a year-over-year basis due to high costs. Revenues of $10.878 billion were 2.7% above the year-ago figure but slightly below the Zacks Consensus Estimate of $10.882.9 billion. The Zacks Ranked #5 American Airlines Group has a VGM Score of C.
Low-cost carrier JetBlue Airways Corporation 's JBLU third-quarter earnings of 55 cents per share beat the Zacks Consensus Estimate by 3 cents. Quarterly earnings, however, declined 5.2% from the year-ago figure due to higher costs. Operating revenues came in at $1.813 billion, just ahead of the Zacks Consensus Estimate of $1.809 billion. Revenues increased 4.7% from the year-ago figure. This Zacks Ranked #5 company has a VGM Score of B.
Alaska Air Group ALK reported earnings (excluding 10 cents from non-recurring items) of $2.24 per share, which fell short of the Zacks Consensus Estimate of $2.25. However, the bottom line inched up 1.8% on a year-over-year basis. Revenues came in at $2.120 billion, below the Zacks Consensus Estimate of $2.166 billion. The company has a Zacks Rank #5 and a VGM Score of A.
Is There Any Strong Positive?
By now, one must have understood from the beat ratios that corporate strength in the airlines industry is moderate. But investors should note that most of the stocks have a good Value Score of A or B. This makes the space a value play.
However, oil prices play a crucial role in the airlines' cost structure. If oil prices manage to see an uptrend in the coming days on an extension of the OPEC output curb deal, airlines may suffer on profit margins (read: Q3 Earnings to Drive Energy ETFs Higher ).
Nevertheless, investors having a strong stomach for oil-related risks and faith in the compelling valuation of airline stocks, may play the recent dip in the space. Below we highlight the fund in detail (read: 5 Incredible ETFs & Stocks to Buy On the Dips ):
JETS in Focus
The $112.4 million-fund holds more than 30 stocks in its portfolio and is concentrated on a few individual securities. Delta Airlines (12.43%), United Continental (12.03%), American Airlines (11.92%) and Southwest Airlines (11.6%) take the first four positions in the fund. JetBlue and Alaska Air hold the sixth and ninth positions in the fund with a 4.12% and 3.54% weight, respectively.
The product charges 60 bps in fees. The fund lost about 6.3% in the last 10 trading sessions (as of Oct 27, 2017) which saw the peak of airlines earnings' releases. The fund has a Zacks ETF Rank #3 with a High-risk outlook.
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Southwest Airlines Company (LUV): Free Stock Analysis Report
JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Alaska Air Group, Inc. (ALK): Free Stock Analysis Report
US GLOBAL JETS (JETS): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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's AAL third-quarter 2017 earnings (excluding 14 cents from non-recurring items) of $1.42 per share surpassed the Zacks Consensus Estimate by 3 cents. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report US GLOBAL JETS (JETS): ETF Research Reports To read this article on Zacks.com click here. United Continental has a Zacks Rank #5 and a VGM Score of D. Low cost carrier Southwest Airlines Co.LUV reported better-than-expected earnings but lower-than-expected revenues.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report US GLOBAL JETS (JETS): ETF Research Reports To read this article on Zacks.com click here. 's AAL third-quarter 2017 earnings (excluding 14 cents from non-recurring items) of $1.42 per share surpassed the Zacks Consensus Estimate by 3 cents. The Zacks Ranked #5 American Airlines Group has a VGM Score of C. Low-cost carrier JetBlue Airways Corporation 's JBLU third-quarter earnings of 55 cents per share beat the Zacks Consensus Estimate by 3 cents.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report US GLOBAL JETS (JETS): ETF Research Reports To read this article on Zacks.com click here. 's AAL third-quarter 2017 earnings (excluding 14 cents from non-recurring items) of $1.42 per share surpassed the Zacks Consensus Estimate by 3 cents. The Zacks Ranked #5 American Airlines Group has a VGM Score of C. Low-cost carrier JetBlue Airways Corporation 's JBLU third-quarter earnings of 55 cents per share beat the Zacks Consensus Estimate by 3 cents.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report US GLOBAL JETS (JETS): ETF Research Reports To read this article on Zacks.com click here. 's AAL third-quarter 2017 earnings (excluding 14 cents from non-recurring items) of $1.42 per share surpassed the Zacks Consensus Estimate by 3 cents. Q3 Results in Detail Delta Air Lines Inc.DAL reported more than two weeks ago with a beat on both lines.
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2017-10-30 00:00:00 UTC
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Gurus Are Investing in These Industrial Companies
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https://www.nasdaq.com/articles/gurus-are-investing-these-industrial-companies-2017-10-30
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According to the GuruFocus All-In-One Screener , the following companies with core business in the industrials sector have positions in gurus' portfolios.
Four gurus hold 47.1 million shares of American Airlines Group Inc. ( AAL ) with a total weight of 1.87% on their portfolios.
The company has a market cap of $22.82 billion. The stock is trading with price-earnings (P/E) ratio of 11.86. The stock price of $47.56 is 10.77% below its 52-week high and 23.97% above its 52-week low. Over the last 10 years, it has returned a loss of 22%.
American Airlines' revenue of $41.112 billion dropped 14.20% over the last 10 years. Its earnings per share (EPS) of $4.10 hasn't changed.
In the second quarter Leon Cooperman ( Trades , Portfolio ) and David Dreman (Trades, Portfolio) acquired a new position in the company while Joel Greenblatt (Trades, Portfolio) and Warren Buffett (Trades, Portfolio) reduced their holdings.
Four gurus hold 1.6 million shares of Aaron's Inc. ( AAN ) with a total weight of 4.37% on their portfolios.
The company has a market cap of $2.76 billion. The stock is trading with P/E ratio of 21.69. The stock price of $39.14 is 12.40% below its 52-week high and 88.82% above its 52-week low. Over the last 10 years, it has returned a gain of 204%.
Aaron's revenue of $3.224 billion grew 11.30% over the last 10 years. Its EPS of $1.95 saw a 10-year growth of 7.10%.
In the second quarter FPA Capital Fund (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Charles Brandes (Trades, Portfolio) and Greenblatt reduced their holdings.
Three gurus hold 8.7 million shares of ABB Ltd. ADR ( ABB ) with a total weight of 0.33% on their portfolios.
The company has a market cap of $54.48 billion. The stock is trading with P/E ratio of 23.99. The stock price of $25.36 is 1.55% below its 52-week high and 25.52% above its 52-week low. Over the last 10 years, it has returned a loss of 15%.
ABB's revenue of $33,556 million increased just 1.70% over the last 10 years. Its EPS of $1.05 dropped 3.10%.
Ken Fisher (Trades, Portfolio) raised his holding by 4.55% in the third quarter.
Three gurus hold 549,250 shares of ACCO Brands Corp. ( ACCO ) with a total weight of 0.03% on their portfolios.
The company has a market cap of $1.42 billion. The stock is trading with P/E ratio of 26.00. The stock price of $13.05 is 11.86% below its 52-week high and 25.60% above its 52-week low. Over the last 10 years, it has returned a loss of 38%.
ACCO Brands' revenue of $1,718 million dropped 10% over the last 10 years. Its EPS of 50 cents hasn't changed.
In the second quarter Dreman raised his position while Gabelli reduced his stake.
Seven gurus hold 157.7 million shares of Automatic Data Processing Inc . ( ADP ) with a total weight of 242.38% on their portfolios.
The company has a market cap of $52.55 billion. The stock is trading with P/E ratio of 30.47. The stock price of $118.25 is 3.67% below its 52-week high and 35.56% above its 52-week low. Over the last 10 years, it has returned a gain of 183%.
Automatic Data Processing's revenue of $12,379 million grew by 5.80% over the last 10 years. Its EPS of $3.85 saw a 10-year growth of 5.30%.
Bill Ackman (Trades, Portfolio) boosted his position by 2,002,03% in the third quarter.
Disclosure: I do not own any shares of any stocks mentioned in this article.
Premium Members
This article first appeared on GuruFocus .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Four gurus hold 47.1 million shares of American Airlines Group Inc. ( AAL ) with a total weight of 1.87% on their portfolios. According to the GuruFocus All-In-One Screener , the following companies with core business in the industrials sector have positions in gurus' portfolios. Four gurus hold 1.6 million shares of Aaron's Inc. ( AAN ) with a total weight of 4.37% on their portfolios.
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Four gurus hold 47.1 million shares of American Airlines Group Inc. ( AAL ) with a total weight of 1.87% on their portfolios. In the second quarter Leon Cooperman ( Trades , Portfolio ) and David Dreman (Trades, Portfolio) acquired a new position in the company while Joel Greenblatt (Trades, Portfolio) and Warren Buffett (Trades, Portfolio) reduced their holdings. In the second quarter FPA Capital Fund (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Charles Brandes (Trades, Portfolio) and Greenblatt reduced their holdings.
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Four gurus hold 47.1 million shares of American Airlines Group Inc. ( AAL ) with a total weight of 1.87% on their portfolios. In the second quarter Leon Cooperman ( Trades , Portfolio ) and David Dreman (Trades, Portfolio) acquired a new position in the company while Joel Greenblatt (Trades, Portfolio) and Warren Buffett (Trades, Portfolio) reduced their holdings. In the second quarter FPA Capital Fund (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Charles Brandes (Trades, Portfolio) and Greenblatt reduced their holdings.
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Four gurus hold 47.1 million shares of American Airlines Group Inc. ( AAL ) with a total weight of 1.87% on their portfolios. American Airlines' revenue of $41.112 billion dropped 14.20% over the last 10 years. In the second quarter Leon Cooperman ( Trades , Portfolio ) and David Dreman (Trades, Portfolio) acquired a new position in the company while Joel Greenblatt (Trades, Portfolio) and Warren Buffett (Trades, Portfolio) reduced their holdings.
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2017-10-28 00:00:00 UTC
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Boeing Has a Secret Weapon for Competing With the Airbus A321
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https://www.nasdaq.com/articles/boeing-has-secret-weapon-competing-airbus-a321-2017-10-28
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When Boeing (NYSE: BA) launched the 737 MAX 10 earlier this year, many aerospace pundits panned it as a poor man's Airbus (NASDAQOTH: EADSY) A321. Nevertheless, the 737 MAX 10 won hundreds of orders and commitments at the 2017 Paris Air Show, including an important order conversion from U.S. airline giant United Continental (NYSE: UAL) .
In fact, Boeing has a secret weapon that has helped it win all of United's new narrowbody aircraft orders recently: a "most-favored customer clause" granted by Airbus to American Airlines (NASDAQ: AAL) . This clause could give Boeing a huge advantage in competing for an upcoming aircraft order from Delta Air Lines (NYSE: DAL) .
The origin of this secret weapon
Back in 2011, Airbus scored a major coup when American Airlines ordered 260 A320-family jets, after years as an all-Boeing airline. Indeed, it was this impending order that forced Boeing to create the 737 MAX to hang on to a portion of American's business.
American Airlines' then-parent AMR was in financial distress at the time, which limited its bargaining power. As a result, while Airbus offered the company substantial help in financing the deal, it didn't need to provide as big a discount as would be typical for an order of that size.
However, there was one catch: a most-favored customer clause. According to Scott Kirby -- who is currently the president of United Continental, but held the same role at American Airlines until August 2016 -- Airbus agreed that if it gave another airline more favorable pricing, it would refund the difference to American Airlines. This is limiting Airbus' ability to match the pricing that Boeing can offer to key customers.
The details are murky
At an employee meeting earlier this month, Kirby indicated that while United is interested in buying narrowbody planes from Airbus, the latter can't provide a competitive price right now. That's why United has 161 orders for the 737 MAX family and none for the A320neo family.
Some aerospace analysts were puzzled by this statement. After all, Airbus has sold thousands of A320neo family planes since announcing the American Airlines deal. It has also sold over 100 A321s to Delta Air Lines (American's other main rival) at bargain prices. Furthermore, it seems odd that Airbus would have agreed to terms that might seriously impair its sales efforts.
One possibility is that the most-favored customer clause only applies to new-engine aircraft rather than the current-generation planes that Delta has bought recently. It also could apply only to U.S. carriers -- and perhaps even just U.S. legacy carriers. The one detail that Kirby confirmed is that the most-favored customer clause expires eventually. (He didn't say when.)
This is a huge advantage for Boeing
To the extent that the most-favored customer clause is applicable, it's a big stumbling block for Airbus. Of course, Airbus could always just give another customer whatever discount is needed to close the deal and pay American the refund it would be entitled to. However, this could severely damage its profitability.
For example, suppose Boeing and Airbus are competing for a 100-plane order and Boeing offers a price that would allow it (or Airbus) to make a $5 million profit per plane. Let's also suppose that this price is $5 million less than the pricing Airbus had offered American Airlines on its outstanding deal for 100 A320neo-family planes. If Airbus were to match Boeing's price, the $5 million per-plane profit it would make from the new deal would be completely offset by having to give American an additional $5 million discount on each of the 100 planes it has on order.
Given that the Airbus and Boeing narrowbody families are both sold out for years, there's no incentive for Airbus to sign any deal that would trigger refunds to American Airlines.
A mystery solved?
Boeing has feuded with Delta Air Lines repeatedly in recent years. In 2015, Delta's management took great pains to highlight falling resale values for Boeing 777 jets. In 2016, Delta canceled an order for 18 Dreamliners. During the past year, Boeing has been working to block a deal for Delta to acquire 75 CS100 aircraft from Bombardier . And over the past three years, Delta has orchestrated a campaign to limit the expansion of Emirates, Qatar Airways, and Etihad Airways -- three of Boeing's most valuable customers .
In light of this acrimony, many pundits have assumed that Delta has no interest in doing business with Boeing right now. This isn't just a theoretical issue: Delta hopes to order about 75 next-generation narrowbody planes within the next few months.
However, Delta's management has consistently maintained that its various disputes with Boeing don't affect the likelihood that it will order planes from the U.S. aerospace giant. Now, we may know why. Delta Air Lines has a reputation for being very savvy about getting the best deal possible. There's a good chance that Boeing will win this competition by offering a price for its 737 MAX that Airbus won't be able to match.
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Adam Levine-Weinberg owns shares of Delta Air Lines. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In fact, Boeing has a secret weapon that has helped it win all of United's new narrowbody aircraft orders recently: a "most-favored customer clause" granted by Airbus to American Airlines (NASDAQ: AAL) . As a result, while Airbus offered the company substantial help in financing the deal, it didn't need to provide as big a discount as would be typical for an order of that size. The details are murky At an employee meeting earlier this month, Kirby indicated that while United is interested in buying narrowbody planes from Airbus, the latter can't provide a competitive price right now.
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In fact, Boeing has a secret weapon that has helped it win all of United's new narrowbody aircraft orders recently: a "most-favored customer clause" granted by Airbus to American Airlines (NASDAQ: AAL) . This clause could give Boeing a huge advantage in competing for an upcoming aircraft order from Delta Air Lines (NYSE: DAL) . The details are murky At an employee meeting earlier this month, Kirby indicated that while United is interested in buying narrowbody planes from Airbus, the latter can't provide a competitive price right now.
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In fact, Boeing has a secret weapon that has helped it win all of United's new narrowbody aircraft orders recently: a "most-favored customer clause" granted by Airbus to American Airlines (NASDAQ: AAL) . For example, suppose Boeing and Airbus are competing for a 100-plane order and Boeing offers a price that would allow it (or Airbus) to make a $5 million profit per plane. If Airbus were to match Boeing's price, the $5 million per-plane profit it would make from the new deal would be completely offset by having to give American an additional $5 million discount on each of the 100 planes it has on order.
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In fact, Boeing has a secret weapon that has helped it win all of United's new narrowbody aircraft orders recently: a "most-favored customer clause" granted by Airbus to American Airlines (NASDAQ: AAL) . One possibility is that the most-favored customer clause only applies to new-engine aircraft rather than the current-generation planes that Delta has bought recently. Let's also suppose that this price is $5 million less than the pricing Airbus had offered American Airlines on its outstanding deal for 100 A320neo-family planes.
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7284.0
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2017-10-26 00:00:00 UTC
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American Airlines (AAL) Q3 Earnings Top Estimates, Fall Y/Y
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https://www.nasdaq.com/articles/american-airlines-aal-q3-earnings-top-estimates-fall-y-y-2017-10-26
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American Airlines Group Inc.'sAAL third-quarter 2017 earnings (excluding 14 cents from non-recurring items) of $1.42 per share surpassed the Zacks Consensus Estimate by 3 cents. Quarterly earnings declined significantly on a year-over-year basis due to high costs. Results were also hurt by the recent hurricanes.
Revenues of $10,878 million were 2.7% above the year-ago figure. The Zacks Consensus Estimate for third-quarter revenues of $10,882.9 million. Strong demand for air travel coupled with improving yields drove the top line in the quarter under review.
Total revenue per available seat miles (TRASM: a key measure of unit revenue) improved 1.1% to 14.89 cents in the reported quarter. In fact, this quarter marked the fourth successive one in which the metric grew on a year-over-year basis, since the fourth quarter of 2014.
Consolidated yield improved 1.6%. Passenger revenue per available seat miles improved 0.9%. While traffic (measured by revenue passenger miles) was up 0.9%, capacity (measured by average seat miles) was up 1.6%. In fact, consolidated load factor (percentage of seats filled by passengers) decreased to 82.8% from 83.3% a year-ago as traffic growth was outpaced by capacity expansion.
Total operating expenses climbed 5.3% year over year to $9.6 billion primarily backed by rise in fuel costs. Expenses pertaining to salaries and benefits were up 8%. Consolidated operating costs per available seat miles (CASM: excluding special items) increased 4.5%.
During the third quarter, the company had to cancel more than 8,000 flights due to the hurricanes (Harvey, Irma and Maria). Consequently, its pre-tax earnings was hurt by approximately $75 million in the quarter.
In the third quarter of 2017, the company returned $411 million billion to its shareholders through the payment of $49 million in dividends and buyback of shares worth $362 million. Furthermore, the carrier also declared a dividend of 10 cents per share. The dividend will be paid on Nov 27, to the shareholders on Nov 13. Notably, the carrier has returned more than $11.1 billion to stockholders through share repurchases and dividends since mid-2014. We are impressed by the company's efforts to reward shareholders through stock repurchases and dividend payments.
Meanwhile, it remains focused on introducing new aircraft and retiring old ones from its fleet. In fact, keeping in with its aim to modernize its fleet, the carrier invested in excess of $900 million during the reported quarter in 13 new planes and three regional ones.
American Airlines Group, Inc. Price, Consensus and EPS Surprise
American Airlines Group, Inc. Price, Consensus and EPS Surprise | American Airlines Group, Inc. Quote
Outlook
TRASM is expected to increase in the band of 2.5% to 4.5% in the fourth quarter. Pre-tax margin excluding special items is projected in the range of 4.5% to 6.5%. Consolidated CASM (excluding special items and fuel) is expected to increase 4.5% in the final quarter of 2017. The metric is also anticipated to increase approximately 5% in 2017. Capacity (system) in 2017 is projected to increase 1%.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly waiting for third-quarter earnings reports from key players like GOL Linhas GOL , Copa Holdings, S.A. CPA and Expeditors International of Washington EXPD . While GOL Linhas and Copa Holdings will report third-quarter results on Nov 8, Expeditors will report the same on Nov 7.
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Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report
Copa Holdings, S.A. (CPA): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Expeditors International of Washington, Inc. (EXPD): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines Group Inc.'sAAL third-quarter 2017 earnings (excluding 14 cents from non-recurring items) of $1.42 per share surpassed the Zacks Consensus Estimate by 3 cents. Click to get this free report Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report Copa Holdings, S.A. (CPA): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Expeditors International of Washington, Inc. (EXPD): Free Stock Analysis Report To read this article on Zacks.com click here. Strong demand for air travel coupled with improving yields drove the top line in the quarter under review.
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Click to get this free report Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report Copa Holdings, S.A. (CPA): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Expeditors International of Washington, Inc. (EXPD): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc.'sAAL third-quarter 2017 earnings (excluding 14 cents from non-recurring items) of $1.42 per share surpassed the Zacks Consensus Estimate by 3 cents. American Airlines Group, Inc. Price, Consensus and EPS Surprise American Airlines Group, Inc. Price, Consensus and EPS Surprise | American Airlines Group, Inc. Quote Outlook TRASM is expected to increase in the band of 2.5% to 4.5% in the fourth quarter.
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Click to get this free report Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report Copa Holdings, S.A. (CPA): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Expeditors International of Washington, Inc. (EXPD): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc.'sAAL third-quarter 2017 earnings (excluding 14 cents from non-recurring items) of $1.42 per share surpassed the Zacks Consensus Estimate by 3 cents. In the third quarter of 2017, the company returned $411 million billion to its shareholders through the payment of $49 million in dividends and buyback of shares worth $362 million.
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American Airlines Group Inc.'sAAL third-quarter 2017 earnings (excluding 14 cents from non-recurring items) of $1.42 per share surpassed the Zacks Consensus Estimate by 3 cents. Click to get this free report Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report Copa Holdings, S.A. (CPA): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Expeditors International of Washington, Inc. (EXPD): Free Stock Analysis Report To read this article on Zacks.com click here. Consolidated operating costs per available seat miles (CASM: excluding special items) increased 4.5%.
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2017-10-26 00:00:00 UTC
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Nasdaq 100 Movers: CELG, AAL
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https://www.nasdaq.com/articles/nasdaq-100-movers-celg-aal-2017-10-26
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In early trading on Thursday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 2.6%. Year to date, American Airlines Group registers a 12.2% gain.
And the worst performing Nasdaq 100 component thus far on the day is Celgene Corp. ( CELG ), trading down 18.2%. Celgene Corp. is lower by about 15.5% looking at the year to date performance.
Two other components making moves today are CA ( CA ), trading down 6.7%, and Starbucks Corp. ( SBUX ), trading up 2.2% on the day.
VIDEO: Nasdaq 100 Movers: CELG, AAL
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In early trading on Thursday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 2.6%. VIDEO: Nasdaq 100 Movers: CELG, AAL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Year to date, American Airlines Group registers a 12.2% gain.
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In early trading on Thursday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 2.6%. VIDEO: Nasdaq 100 Movers: CELG, AAL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Year to date, American Airlines Group registers a 12.2% gain.
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In early trading on Thursday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 2.6%. VIDEO: Nasdaq 100 Movers: CELG, AAL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. And the worst performing Nasdaq 100 component thus far on the day is Celgene Corp. ( CELG ), trading down 18.2%.
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In early trading on Thursday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 2.6%. VIDEO: Nasdaq 100 Movers: CELG, AAL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. And the worst performing Nasdaq 100 component thus far on the day is Celgene Corp. ( CELG ), trading down 18.2%.
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7286.0
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2017-10-26 00:00:00 UTC
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American Airlines Group (AAL) Beats on Q3 Earnings
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https://www.nasdaq.com/articles/american-airlines-group-aal-beats-on-q3-earnings-2017-10-26
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American Airlines GroupAAL came into existence following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways. This Fort Worth, Texas based company serves customers with more than 6,700 daily flights in more than 50 nations across the globe.
American Airlines Group has a healthy track record with respect to earnings. The company has delivered positive earnings surprises in three of the last four quarters, with an average beat of 19.1%.
Zacks Rank : Currently, American Airlines Group has a Zacks Rank #5 (Strong Sell), but that could change following the company's earnings report which was just released. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
We have highlighted some of the key stats from this just-revealed announcement below:
Earnings : American Airlines Group beat on earnings. Adjusted earnings per share came in at $1.42 per share, beating the Zacks Consensus Estimate by 3 cents. Quarterly earnings declined significantly on a year over year basis due to high costs. Results were also hurt by the recent hurricanes. During the third quarter, the company had to cancel more than 8,000 flights due to the hurricanes (Harvey, Irma and Maria). Consequently, its pre-tax earnings was hurt by approximately $75 million in the quarter.
American Airlines Group, Inc. Price and EPS Surprise
American Airlines Group, Inc. Price and EPS Surprise | American Airlines Group, Inc. Quote
Revenue : Revenues of $10,878 million were 2.7% above the year-ago figure. The Zacks Consensus Estimate for third-quarter revenues of $10,882.9 million. Total revenue per available seat miles (TRASM) increased 1.1% in the quarter.
Key Stats : American Airlines Group's bottom-line in the quarter was hurt by higher labor costs. Cost per available seat mile excluding fuel and special items increased 4.5% on a year over year basis. During the quarter, the company returned $411 million billion to its shareholders through the payment of $49 million in dividends and buyback of shares worth $362 million. Furthermore, the carrier also declared a dividend of $0.10 per share. The dividend will be paid on Nov 27, to the shareholders on Nov 13. We are impressed by the company's efforts to reward shareholders through stock repurchases and dividend payments. TRASM is expected to increase in the band of 2.5% to 4.5% in the fourth quarter. Pre-tax margin excluding special items is projected in the range of 4.5% to 6.5%.
Stock Price : The earnings report found favor with investors. Consequently, shares of the company were up in pre-market trading at the time of writing.
Check back later for our full write up on this American Airlines Group earnings report later!
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American Airlines Group, Inc. (AAL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines GroupAAL came into existence following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways. Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. This Fort Worth, Texas based company serves customers with more than 6,700 daily flights in more than 50 nations across the globe.
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American Airlines GroupAAL came into existence following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways. Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Rank : Currently, American Airlines Group has a Zacks Rank #5 (Strong Sell), but that could change following the company's earnings report which was just released.
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American Airlines GroupAAL came into existence following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways. Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Rank : Currently, American Airlines Group has a Zacks Rank #5 (Strong Sell), but that could change following the company's earnings report which was just released.
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American Airlines GroupAAL came into existence following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways. Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Rank : Currently, American Airlines Group has a Zacks Rank #5 (Strong Sell), but that could change following the company's earnings report which was just released.
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7287.0
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2017-10-26 00:00:00 UTC
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American Airlines Vague On 2018; Another Carrier Warns On Costs
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AAL
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https://www.nasdaq.com/articles/american-airlines-vague-2018-another-carrier-warns-costs-2017-10-26
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American Airlines ( AAL ) on Thursday said it would be "disappointed" if unit revenue next year was outpaced by an oft-used measurement for costs. But American executives didn't provide many clues about 2018, following a low-information earnings report last week by United Airlines ( UAL ).
[ibd-display-video id=2422685 width=50 float=left autostart=true] Investors also digested a forecast for higher costs from Southwest Airlines ( LUV ), a day after Alaska Airlines ( ALK ) predicted rising expenses. But they gave Spirit Airlines ( SAVE ) a boost after the discount carrier signaled it had stopped some of the bleeding after rivals tried to match it on airfares.
The forecasts come as analysts increasingly pick over executives' remarks for clues as to how the industry will navigate 2018. When United Airlines management last week provided next to no clarity on how it would meet long-term financial goals and keep costs in line next year as it expands service, Wall Street deep-sixed the stock, sinking it 12%.
While other analysts have argued that United's problems are uniquely its own, Stifel analyst Joseph DeNardi said in a research note last week that "we believe more clarity regarding 2018 industry growth will be a primary catalyst for airline stocks" for the rest of 2017.
American: 'We Know Who We Are'
American management on Thursday said that it was still developing its 2018 operating plans, with a formal flight capacity to come when it reports fourth-quarter results. But on a schedule-over-schedule basis, it said it expects capacity to be up roughly 2.5% next year, another focal point for some analysts.
That would be higher than the roughly 1% expected for this year. The carrier also said it expected adjusted unit costs to rise around 2% next year, with higher salaries and benefits - as well as costs related to maintenance, rents and landing fees - likely contributing the increase.
Few other specifics were given about how American will navigate 2018. But management repeated during the call some iteration of "we know who we are" or "we're running our own show."
"We're not going to define ourselves against what others are doing," CEO Doug Parker said.
Shares plunged 4.7% to closed at 48.63 on the stock market today , reversing an earlier gain to 53.19. The stock is working its way through a cup-with-handle base with a 53.84 buy point. Delta Air Lines (DAL) fell 2.5%, and United Airlines ( UAL ) rose 0.1%.
Still, Parker touted American Air's "measured rollout" of Basic Economy after United's more aggressive expansion of the fare class made it temporarily uncompetitive. American said demand for Premium Economy seats remains high, and about half of its customers are buying main cabin seats when given the option between that and Basic Economy.
American's earnings followed a travel advisory the NAACP issued this week warning African American passengers against traveling with the carrier. In its announcement, the NAACP cited several incidents that it said "suggest a corporate culture of racial insensitivity and possible racial bias on the part of American Airlines."
Parker said the carrier was eager to learn from any missteps, and that it expected to work with the NAACP on the issue in the "very near term." Asked if the advisory had an impact on bookings, Parker said: "We haven't seen anything, but that is not the point."
The carrier sees Q4 unit revenue increasing 2.5% to 4.5%, and said the demand environment "remains robust." Unit revenue measures sales an airline gets in relation to how many available seats it has and how far and often it flies them.
Earnings per share of $1.42 topped Zacks estimates for $1.39. Revenue of $10.878 billion missed views for $10.884 billion.
Hurricanes Harvey, Irma and Maria caused more than 8,000 cancellations and reduced pretax earnings by $75 million.
"We are playing the long game at American to create value in an industry that has been fundamentally transformed," said Chairman and CEO Doug Parker in a statement.
Spirit Challenges Rhetoric
Shares of Spirit jumped 6.9% to close at 36.08 on Thursday after the low-fare, high-fee carrier forecast a unit revenue decline of 4%-6%, better than the 6.3% drop in the third quarter due to "aggressive competitive pricing action in many of our markets."
But for the fourth quarter, the carrier cited "continued improvement" in revenue management. It said there was still a leftover impact from Hurricane Harvey, but not one from Irma, and that it had temporarily cut service in its Caribbean locations.
Spirit canceled over 1,650 flights related to Hurricanes Harvey, Irma, and Maria, costing $40 million in revenue, along with revenue overhang from the flight cancellations related to what it alleged was a "pilot work action" earlier this year.
This summer, a price-cutting battle between Spirit and United raised Wall Street questions over whether the ultra-low-cost carrier model was broken and whether United could balance cheaper fares with the costs of operations.
"Contrary to some rhetoric of late, the Spirit model continues to produce excellent returns," CCO Matt Klein said on Spirit's earnings call on Thursday.
American CEO Parker may have added to that rhetoric indirectly on Thursday, saying that the industry, after bankruptcies and consolidation, was in the "final stages of a maturation process." And he said that ultra-low-cost carriers, in search of new markets, have run into trouble as they move into the nation's big airport hubs. The remarks echoed those of United President Scott Kirby in July.
Third-quarter EPS of 94 cents beat estimates for 90 cents; revenue of $687.2 million squeaked past estimates for $687 million.
IBD'S TAKE: As an investor, you may wonderwhy buy points are important. The chart action of thesetop stocksoffers an answer.
Southwest Cost Questions
Southwest said fourth-quarter adjusted unit costs would be "higher than previously expected" in large part because of a "shift in advertising spend" in the quarter, costs related to the carrier's planned expansion to Hawaii, and technology investments.
The cost forecast was "probably higher than investors were expecting," Cowen analyst Helane Becker said in a research note.
EPS of 88 cents topped forecasts by a penny, while revenue of $5.27 billion came in just shy of expectations for $5.297 billion. Unit revenue fell 0.5%, due to the introduction of a new reservation system. Disruption from natural disasters cost $100 million and forced 5,000 flight cancellations.
The carrier sees Q4 unit revenue being "up slightly" to up 1.5%.
Shares sank 3.6% to 55.11 after earlier advancing to 58.72. Southwest is pulling back from a cup-with-handle base entry of 59.67 .
RELATED:
United Airlines Dives On Disastrous Earnings Call; Rival Carriers Fall
Delta Air Lines Sees Turnaround In Crucial, Highly Competitive Market
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines ( AAL ) on Thursday said it would be "disappointed" if unit revenue next year was outpaced by an oft-used measurement for costs. When United Airlines management last week provided next to no clarity on how it would meet long-term financial goals and keep costs in line next year as it expands service, Wall Street deep-sixed the stock, sinking it 12%. Still, Parker touted American Air's "measured rollout" of Basic Economy after United's more aggressive expansion of the fare class made it temporarily uncompetitive.
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American Airlines ( AAL ) on Thursday said it would be "disappointed" if unit revenue next year was outpaced by an oft-used measurement for costs. Spirit canceled over 1,650 flights related to Hurricanes Harvey, Irma, and Maria, costing $40 million in revenue, along with revenue overhang from the flight cancellations related to what it alleged was a "pilot work action" earlier this year. Southwest Cost Questions Southwest said fourth-quarter adjusted unit costs would be "higher than previously expected" in large part because of a "shift in advertising spend" in the quarter, costs related to the carrier's planned expansion to Hawaii, and technology investments.
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American Airlines ( AAL ) on Thursday said it would be "disappointed" if unit revenue next year was outpaced by an oft-used measurement for costs. Spirit canceled over 1,650 flights related to Hurricanes Harvey, Irma, and Maria, costing $40 million in revenue, along with revenue overhang from the flight cancellations related to what it alleged was a "pilot work action" earlier this year. Southwest Cost Questions Southwest said fourth-quarter adjusted unit costs would be "higher than previously expected" in large part because of a "shift in advertising spend" in the quarter, costs related to the carrier's planned expansion to Hawaii, and technology investments.
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American Airlines ( AAL ) on Thursday said it would be "disappointed" if unit revenue next year was outpaced by an oft-used measurement for costs. The forecasts come as analysts increasingly pick over executives' remarks for clues as to how the industry will navigate 2018. The stock is working its way through a cup-with-handle base with a 53.84 buy point.
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7288.0
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2017-10-26 00:00:00 UTC
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Notable Thursday Option Activity: SPG, AAL, HES
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https://www.nasdaq.com/articles/notable-thursday-option-activity-spg-aal-hes-2017-10-26
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Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume today in Simon Property Group, Inc. (Symbol: SPG), where a total of 9,306 contracts have traded so far, representing approximately 930,600 underlying shares. That amounts to about 75.1% of SPG's average daily trading volume over the past month of 1.2 million shares. Especially high volume was seen for the $170 strike call option expiring November 17, 2017 , with 3,363 contracts trading so far today, representing approximately 336,300 underlying shares of SPG. Below is a chart showing SPG's trailing twelve month trading history, with the $170 strike highlighted in orange:
American Airlines Group Inc (Symbol: AAL) saw options trading volume of 34,659 contracts, representing approximately 3.5 million underlying shares or approximately 71.8% of AAL's average daily trading volume over the past month, of 4.8 million shares. Especially high volume was seen for the $50 strike call option expiring January 19, 2018 , with 3,637 contracts trading so far today, representing approximately 363,700 underlying shares of AAL. Below is a chart showing AAL's trailing twelve month trading history, with the $50 strike highlighted in orange:
And Hess Corp (Symbol: HES) options are showing a volume of 18,854 contracts thus far today. That number of contracts represents approximately 1.9 million underlying shares, working out to a sizeable 48.1% of HES's average daily trading volume over the past month, of 3.9 million shares. Particularly high volume was seen for the $45 strike call option expiring January 19, 2018 , with 5,630 contracts trading so far today, representing approximately 563,000 underlying shares of HES. Below is a chart showing HES's trailing twelve month trading history, with the $45 strike highlighted in orange:
For the various different available expirations for SPG options , AAL options , or HES options , visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Especially high volume was seen for the $50 strike call option expiring January 19, 2018 , with 3,637 contracts trading so far today, representing approximately 363,700 underlying shares of AAL. Below is a chart showing SPG's trailing twelve month trading history, with the $170 strike highlighted in orange: American Airlines Group Inc (Symbol: AAL) saw options trading volume of 34,659 contracts, representing approximately 3.5 million underlying shares or approximately 71.8% of AAL's average daily trading volume over the past month, of 4.8 million shares. Below is a chart showing AAL's trailing twelve month trading history, with the $50 strike highlighted in orange: And Hess Corp (Symbol: HES) options are showing a volume of 18,854 contracts thus far today.
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Below is a chart showing SPG's trailing twelve month trading history, with the $170 strike highlighted in orange: American Airlines Group Inc (Symbol: AAL) saw options trading volume of 34,659 contracts, representing approximately 3.5 million underlying shares or approximately 71.8% of AAL's average daily trading volume over the past month, of 4.8 million shares. Especially high volume was seen for the $50 strike call option expiring January 19, 2018 , with 3,637 contracts trading so far today, representing approximately 363,700 underlying shares of AAL. Below is a chart showing AAL's trailing twelve month trading history, with the $50 strike highlighted in orange: And Hess Corp (Symbol: HES) options are showing a volume of 18,854 contracts thus far today.
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Below is a chart showing SPG's trailing twelve month trading history, with the $170 strike highlighted in orange: American Airlines Group Inc (Symbol: AAL) saw options trading volume of 34,659 contracts, representing approximately 3.5 million underlying shares or approximately 71.8% of AAL's average daily trading volume over the past month, of 4.8 million shares. Especially high volume was seen for the $50 strike call option expiring January 19, 2018 , with 3,637 contracts trading so far today, representing approximately 363,700 underlying shares of AAL. Below is a chart showing AAL's trailing twelve month trading history, with the $50 strike highlighted in orange: And Hess Corp (Symbol: HES) options are showing a volume of 18,854 contracts thus far today.
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Below is a chart showing SPG's trailing twelve month trading history, with the $170 strike highlighted in orange: American Airlines Group Inc (Symbol: AAL) saw options trading volume of 34,659 contracts, representing approximately 3.5 million underlying shares or approximately 71.8% of AAL's average daily trading volume over the past month, of 4.8 million shares. Especially high volume was seen for the $50 strike call option expiring January 19, 2018 , with 3,637 contracts trading so far today, representing approximately 363,700 underlying shares of AAL. Below is a chart showing AAL's trailing twelve month trading history, with the $50 strike highlighted in orange: And Hess Corp (Symbol: HES) options are showing a volume of 18,854 contracts thus far today.
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7289.0
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2017-10-25 00:00:00 UTC
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Alaska Air Group (ALK) Q3 Earnings, Revenues Miss Estimates
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AAL
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https://www.nasdaq.com/articles/alaska-air-group-alk-q3-earnings-revenues-miss-estimates-2017-10-25
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Alaska Air Group ALK reported third-quarter earnings (excluding 10 cents from non-recurring items)of $2.24 per share, which fell short of the Zacks Consensus Estimate of $2.25. However, the bottom line inched up 1.8% on a year-over-year basis.
Revenues came in at $2,120 million, below the Zacks Consensus Estimate of $2,166.2 million. The top line, however, rallied 35.4% on a year-over-year basis. Passenger revenues which accounted for bulk of the top line (86%), improved 38% on a year-over-year basis.
The below-par performance disappointed investors. Consequently, shares of the company were down in early trading.
Operating Statistics
Airline traffic, measured in revenue passenger miles, rose 43.8% year over year to 13,811 million in the reported quarter. Capacity or available seat miles surged 44.2% to 16,164 million. Load factor (percentage of seats filled by passengers) decreased 20 basis points to 85.4% owing to capacity expansion outpacing traffic growth.
Passenger revenue per available seat mile (PRASM: a key measure of unit revenues) decreased 4.2% year over year to 11.29 cents. Total revenue per available seat mile (RASM) also declined 6.1% to 13.12 cents in the reported quarter, while yield declined 4.1% to 13.21 cents.
Operating Expenses & Income
In the quarter under review, total operating expenses rose 44% year over year to $1,681 million. Operating income increased 10% to $439 million from the prior-year quarter. Fuel price (economic) was $1.80 per gallon, up 13.9%. Consolidated unit cost or cost per available seat mile - excluding fuel and special items - decreased 2.7% to 7.98 cents.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Alaska Air Group, Inc. Price, Consensus and EPS Surprise | Alaska Air Group, Inc. Quote
Liquidity
At the end of the quarter, this Zacks Rank #5 (Strong Sell) company had $1,740 million in cash and marketable securities compared with $1,580 million at the end of 2016. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Alaska Air Group exited the quarter with long-term debt of $2,367 million compared with $2,645 million at the end of 2016. At the end of the quarter, adjusted debt-to-capitalization ratio was 53% compared with 59% at 2016-end. In fact, the carrier paid a dividend of 30 cents per share in the third quarter, up 9% year over year.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. AAL , Southwest Airlines Company LUV and Union Pacific Corp. UNP . All are scheduled to report respective earnings numbers on Oct 26.
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Southwest Airlines Company (LUV): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Alaska Air Group, Inc. (ALK): Free Stock Analysis Report
Union Pacific Corporation (UNP): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Upcoming Releases Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. AAL , Southwest Airlines Company LUV and Union Pacific Corp. UNP . Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report To read this article on Zacks.com click here. Alaska Air Group ALK reported third-quarter earnings (excluding 10 cents from non-recurring items)of $2.24 per share, which fell short of the Zacks Consensus Estimate of $2.25.
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Upcoming Releases Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. AAL , Southwest Airlines Company LUV and Union Pacific Corp. UNP . Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report To read this article on Zacks.com click here. Alaska Air Group, Inc. Price, Consensus and EPS Surprise Alaska Air Group, Inc. Price, Consensus and EPS Surprise | Alaska Air Group, Inc. Quote Liquidity At the end of the quarter, this Zacks Rank #5 (Strong Sell) company had $1,740 million in cash and marketable securities compared with $1,580 million at the end of 2016.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report To read this article on Zacks.com click here. Upcoming Releases Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. AAL , Southwest Airlines Company LUV and Union Pacific Corp. UNP . Operating Statistics Airline traffic, measured in revenue passenger miles, rose 43.8% year over year to 13,811 million in the reported quarter.
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Upcoming Releases Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. AAL , Southwest Airlines Company LUV and Union Pacific Corp. UNP . Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report To read this article on Zacks.com click here. Alaska Air Group ALK reported third-quarter earnings (excluding 10 cents from non-recurring items)of $2.24 per share, which fell short of the Zacks Consensus Estimate of $2.25.
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7290.0
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2017-10-25 00:00:00 UTC
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Key Predictions for Q3 Earnings Reports of AAL, UPS & LUV
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https://www.nasdaq.com/articles/key-predictions-for-q3-earnings-reports-of-aal-ups-luv-2017-10-25
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The Q3 earnings season is in full flow with earnings reports available from more than 135 S&P 500 companies. In fact the current week is an extremely busy one with 722 companies (including 180 S&P 500 players) slated to unveil their numbers during its course.
Per the latest Earnings Preview , stocks in the highly sought-after fraternity are projected to end Q3 with their top and bottom lines expanding 5% and 2.6%, respectively. In fact, seven of the 16 Zacks sectors are expected to witness their bottom line expand on a year-over-year basis.
Rough Ride for Transports in Q3?
The Zacks Transportation sector , does not share this rosy picture with the sectoral earnings projected to contract 14.9% due to higher costs and the recent hurricanes. In fact, the bottom line for key sectoral participants like Delta Air Lines DAL and United Continental Holdings UAL have contracted 7.6% and 28.6%, respectively, in Q3 on a year-over-year basis.
Notably, the unfavorable projection for this widely-diversified sector highlights the fact it has been one of the worst victims of the natural disasters (Harvey, Irma, Maria and the earthquake in Mexico). For example, airline operators had to cancel multiple flights leading to significant loss in revenues.
In fact, the negative impact of the hurricanes is also well reflected in the key transportation earnings reports available thus far. Evidently, United Continental Holdings had to cancel 8,300 flights in the quarter and consequently its third-quarter pretax income reduced to the tune of approximately $185 million.
Additionally, these catastrophes have hurt operations of railroads by damaging important rail lines, leading to rapid increase in freight costs. Also, the sluggishness of the automotive unit is a cause of concern for railroads. For trucking companies, shortage of drivers remains a major headwind. Meanwhile, the rise in labor costs has hurt J.B. Hunt Transport Services' JBHTthird-quarter results and the trend is likely to continue in the rest of Q3.
Stocks to Watch for Earnings on Oct 26
Given this backdrop, investors interested in the transportation space will keenly await Q3 reports from key sector participants like American Airlines GroupAAL , United Parcel ServiceUPS and Southwest AirlinesLUV that are scheduled for Oct 26.
According to our quantitative model, a company needs the right combination of two key ingredients - a positive Earnings ESP and a Zacks Rank #3 (Hold) or better - to increase the odds of an earnings surprise.
American Airlines Group, headquartered in Fort Worth, TX, operates more than 6,700 daily flights to over 330 destinations in more than 50 nations across the globe. Of late, this carrier also underwent a turbulent phase like the other airlines, mainly due to the hurricanes.
Consequently, the company called off approximately 8,000 flights in the third quarter. Also, increased costs (fuel and labor) are expected to hit the bottom line. The Zacks Consensus Estimate for third-quarter fuel price per gallon (including taxes) is pegged at $1.59, much higher than the $1.48 reported a year ago.
Despite the disruptions, the scenario with respect to total revenue per available seat mile (TRASM) is an improved one from the year-ago quarter, courtesy better-than-expected yields. For the third quarter, American Airlines expects total revenue per available seat mile (TRASM) to grow between 0.5% and 1.5%. The Zacks Consensus Estimate for third-quarter TRASM is pegged at 14.98 cents, higher than 14.73 cents reported in the third quarter of 2016. The Zacks Consensus Estimate for third-quarter yields is pegged at 15.56 cents, higher than 15.27 cents reported in the third quarter of 2016.
However, the chances of this legacy carrier beating the Zacks Consensus Estimate in Q3 are less, even though it has an Earnings ESP of +0.53%. This is because American Airlines' Zacks Rank #5 (Strong Sell) acts as a spoiler.
In fact, our model did not predict an earnings beat earlier as well. Previously, when we issued its Q3 earnings preview article , the company had an Earnings ESP of +1.41%, while the Zacks Rank remained the same. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
American Airlines Group, Inc. Price and EPS Surprise
American Airlines Group, Inc. Price and EPS Surprise | American Airlines Group, Inc. Quote
The next company United Parcel Service is the world's largest express carrier. Markedly, UPS provides specialized transportation and logistics services in the United States and internationally.
The Zacks Consensus Estimate for third-quarter U.S. Domestic Package revenues is pegged at $9,695 million, just below the figure of $9,745 million reported in the second quarter of 2017. The same for International Package revenues is pegged at $3,076 million, below the figure of $3,163 million reported in the second quarter of 2017. Also, high costs are likely to hurt the company's bottom line in the to-be-reported quarter.
According to our proven model, the chances of the company beating the Zacks Consensus Estimate for earnings in this quarter are less, despite its Zacks Rank #3. This is because it has an Earnings ESP of -0.06% (read more: What's in the Cards for UPS Stock This Earnings Season? ).
United Parcel Service, Inc. Price and EPS Surprise
United Parcel Service, Inc. Price and EPS Surprise | United Parcel Service, Inc. Quote
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Its earnings performance apart, focus will be on the updates regarding its preparations for the upcoming holiday season. Additionally, growth in e-commerce is likely to benefit UPS.
Meanwhile, Southwest Airlines' third-quarter results are expected to be hurt due to the recent hurricanes and the earthquake in Mexico. These natural disasters have forced the airline to cancel approximately 5,000 flights. Owing to the multiple flight cancellations, the company expects the quarters' operating revenues to be hurt to the tune of $100 million.
Increased costs are expected to hurt the bottom line as well. Cost per available seat miles, excluding special items, is estimated to increase between 3% and 4%. Fuel price per gallon is anticipated between $2.00 and $2.05 in the quarter. The Zacks Consensus Estimate for third-quarter fuel price is pegged at $2.00 per gallon, higher than $1.93 reported in the second quarter of 2017.
According to our proven model, the chances of the company beating the Zacks Consensus Estimate for earnings in this quarter are less. This is because it has an Earnings ESP of -0.61% and carries a Zacks Rank #4 (Sell) (read more: Will Southwest Airlines Disappoint in Q3 Earnings? ).
Southwest Airlines Company Price and EPS Surprise
Southwest Airlines Company Price and EPS Surprise | Southwest Airlines Company Quote
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>
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Southwest Airlines Company (LUV): Free Stock Analysis Report
Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report
United Parcel Service, Inc. (UPS): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Stocks to Watch for Earnings on Oct 26 Given this backdrop, investors interested in the transportation space will keenly await Q3 reports from key sector participants like American Airlines GroupAAL , United Parcel ServiceUPS and Southwest AirlinesLUV that are scheduled for Oct 26. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report United Parcel Service, Inc. (UPS): Free Stock Analysis Report To read this article on Zacks.com click here. Per the latest Earnings Preview , stocks in the highly sought-after fraternity are projected to end Q3 with their top and bottom lines expanding 5% and 2.6%, respectively.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report United Parcel Service, Inc. (UPS): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks to Watch for Earnings on Oct 26 Given this backdrop, investors interested in the transportation space will keenly await Q3 reports from key sector participants like American Airlines GroupAAL , United Parcel ServiceUPS and Southwest AirlinesLUV that are scheduled for Oct 26. American Airlines Group, Inc. Price and EPS Surprise American Airlines Group, Inc. Price and EPS Surprise | American Airlines Group, Inc. Quote The next company United Parcel Service is the world's largest express carrier.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report United Parcel Service, Inc. (UPS): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks to Watch for Earnings on Oct 26 Given this backdrop, investors interested in the transportation space will keenly await Q3 reports from key sector participants like American Airlines GroupAAL , United Parcel ServiceUPS and Southwest AirlinesLUV that are scheduled for Oct 26. American Airlines Group, Inc. Price and EPS Surprise American Airlines Group, Inc. Price and EPS Surprise | American Airlines Group, Inc. Quote The next company United Parcel Service is the world's largest express carrier.
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Stocks to Watch for Earnings on Oct 26 Given this backdrop, investors interested in the transportation space will keenly await Q3 reports from key sector participants like American Airlines GroupAAL , United Parcel ServiceUPS and Southwest AirlinesLUV that are scheduled for Oct 26. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report United Parcel Service, Inc. (UPS): Free Stock Analysis Report To read this article on Zacks.com click here. According to our quantitative model, a company needs the right combination of two key ingredients - a positive Earnings ESP and a Zacks Rank #3 (Hold) or better - to increase the odds of an earnings surprise.
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7291.0
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2017-10-25 00:00:00 UTC
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Canadian National (CNI) Q3 Earnings & Revenues Lag Estimates
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AAL
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https://www.nasdaq.com/articles/canadian-national-cni-q3-earnings-revenues-lag-estimates-2017-10-25
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nan
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nan
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Canadian National Railway Company'sCNI third-quarter 2017 earnings per share (excluding 3 cents from non-recurring items) of $1.05 (C$1.31) fell short of the Zacks Consensus Estimate of $1.06. The bottom line however, climbed 9.4% from the year-ago figure.
Quarterly revenues of $2,576.8 million (C$3,221) also lagged the Zacks Consensus Estimate of $2,620.7 million but increased 11.5% year over year. Rail freight revenues, accounting for bulk of the top line in the quarter, improved 7%. The top line got a boost from increased volumes in segments namely, Overseas Intermodal, Frac sand, Coal and Petroleum coke exports, and Canadian grain.
Operating Results
On a year-over-year basis, freight revenues increased in segments like Metals and Minerals (31%), Coal (23%), Intermodal (12%) and Automotive (4%). However, the same declined in segments like Forest Products (2%) and Grain and Fertilizers (1%). Petroleum and Chemicals revenue remained flat year over year. Overall, carloads (volumes) expanded 11% and revenue ton miles (RTMs) rallied 10% year over year. Rail freight revenues per carload declined 4%in the reported quarter.
The Metals and minerals sub group performed most impressively with respect to car loads that surged 23%. The other segment to report double-digit volume growth is Intermodal, showing a 20% rise. Petroleum and Chemicals segment reported an increase of 3% year over year. However, Forest Products and Coal volumes decreased 2% and 7%, respectively. Grain and Fertilizers, and Automotive volumes contracted 3% each.
In the quarter under review, operating income grew 3.7% year over year to C$1,459. Operating ratio (defined as operating expenses as a percentage of revenues) was 54.7% compared with 53.3% in the year-ago quarter. Higher fuel costs contributed to this key metric's deterioration.
Canadian National Railway Company Price, Consensus and EPS Surprise
Canadian National Railway Company Price, Consensus and EPS Surprise | Canadian National Railway Company Quote
Liquidity
This Zacks Rank #3 (Hold) company exited the third quarter with free cash flow of C$662 million compared with C$574 million a year ago. Adjusted debt at the end of the quarter was C$10,894 million compared with C$11,245 million a year ago. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Guidance
Canadian National continues to expect full-year 2017 earnings per share in the band of C$4.95-C$5.10 compared with C$4.59 a year ago.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. AAL , Southwest Airlines Company LUV and Union Pacific Corporation UNP . All are scheduled to report their respective earnings numbers on Oct 26.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Southwest Airlines Company (LUV): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Union Pacific Corporation (UNP): Free Stock Analysis Report
Canadian National Railway Company (CNI): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Upcoming Releases Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. AAL , Southwest Airlines Company LUV and Union Pacific Corporation UNP . Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report Canadian National Railway Company (CNI): Free Stock Analysis Report To read this article on Zacks.com click here. Canadian National Railway Company'sCNI third-quarter 2017 earnings per share (excluding 3 cents from non-recurring items) of $1.05 (C$1.31) fell short of the Zacks Consensus Estimate of $1.06.
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Upcoming Releases Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. AAL , Southwest Airlines Company LUV and Union Pacific Corporation UNP . Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report Canadian National Railway Company (CNI): Free Stock Analysis Report To read this article on Zacks.com click here. Canadian National Railway Company Price, Consensus and EPS Surprise Canadian National Railway Company Price, Consensus and EPS Surprise | Canadian National Railway Company Quote Liquidity This Zacks Rank #3 (Hold) company exited the third quarter with free cash flow of C$662 million compared with C$574 million a year ago.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report Canadian National Railway Company (CNI): Free Stock Analysis Report To read this article on Zacks.com click here. Upcoming Releases Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. AAL , Southwest Airlines Company LUV and Union Pacific Corporation UNP . Quarterly revenues of $2,576.8 million (C$3,221) also lagged the Zacks Consensus Estimate of $2,620.7 million but increased 11.5% year over year.
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Upcoming Releases Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. AAL , Southwest Airlines Company LUV and Union Pacific Corporation UNP . Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report Canadian National Railway Company (CNI): Free Stock Analysis Report To read this article on Zacks.com click here. Quarterly revenues of $2,576.8 million (C$3,221) also lagged the Zacks Consensus Estimate of $2,620.7 million but increased 11.5% year over year.
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7292.0
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2017-10-25 00:00:00 UTC
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What To Expect From American Airlines' Q3 Earnings
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AAL
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https://www.nasdaq.com/articles/what-expect-american-airlines-q3-earnings-2017-10-25
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nan
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nan
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American Airlines ( AAL ) is all set to report earnings for the third quarter of FY 2017 on October 26. The company faired pretty well in the previous couple of quarters, beating the consensus estimates on both occasions. Q2 also marked the third consecutive quarter in which it has managed to maintain positive RASM. We can expect a similar growth in Q3 as well.
That said, the wage increases have dragged on earnings since the beginning of the year. In December last year, the airline agreed to increase the pay by about 5% for air attendants and 8% for pilots. The pay hike is expected to add $930 million in costs through 2019.
Points To Note :
Like other competitors, the airline's top line has been hurt significantly due to the back-to-back hurricanes that thrashed the East Coast. Owing to the adverse weather conditions, American was forced to cancel approximately 8,000 flights in the third quarter.
Consequently, the company expects its pre-tax earnings to come in around $75 million lower in comparison to the previously estimated number. The legacy player expects pre-tax margin, excluding certain special items, to range between 9-11%.
This comes at a time when increased wages are hurting earnings heavily, and at a time when fuel costs are increasing rapidly, a trend, that is expected to remain constant in the near term. Hence, we can expect the ex-fuel CASM (cost per available seat mile), excluding special items, to increase by approximately 4.5%. Fuel price per gallon is expected to come in around the $1.64-$1.69 range in Q3.
The negatives aside, we can expect the RASM figure to continue to remain positive for a fourth consecutive quarter. In Q3, total RASM is expected to jump in the range of 0.5-1.5%. The key metric is expected to come in positive throughout the remainder of 2017.
Domestic unit revenues increased in every month of the quarter, landing an average increase of 2.2%. The increase was partially facilitated by implementing a number of revenue management initiatives in the airline's Premium cabin. Further, the company has also benefited from targeted sales initiatives that have shown strong response across the network. This trend is expected to continue into future quarters as well.
View Interactive Institutional Research (Powered by Trefis):
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap
More Trefis Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines ( AAL ) is all set to report earnings for the third quarter of FY 2017 on October 26. Points To Note : Like other competitors, the airline's top line has been hurt significantly due to the back-to-back hurricanes that thrashed the East Coast. Hence, we can expect the ex-fuel CASM (cost per available seat mile), excluding special items, to increase by approximately 4.5%.
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American Airlines ( AAL ) is all set to report earnings for the third quarter of FY 2017 on October 26. The legacy player expects pre-tax margin, excluding certain special items, to range between 9-11%. Mid & Small Cap | European Large & Mid Cap More Trefis Research The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines ( AAL ) is all set to report earnings for the third quarter of FY 2017 on October 26. This comes at a time when increased wages are hurting earnings heavily, and at a time when fuel costs are increasing rapidly, a trend, that is expected to remain constant in the near term. The negatives aside, we can expect the RASM figure to continue to remain positive for a fourth consecutive quarter.
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American Airlines ( AAL ) is all set to report earnings for the third quarter of FY 2017 on October 26. Q2 also marked the third consecutive quarter in which it has managed to maintain positive RASM. This comes at a time when increased wages are hurting earnings heavily, and at a time when fuel costs are increasing rapidly, a trend, that is expected to remain constant in the near term.
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7293.0
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2017-10-25 00:00:00 UTC
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Norfolk Southern (NSC) Tops Q3 Earnings, Sales Estimates
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AAL
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https://www.nasdaq.com/articles/norfolk-southern-nsc-tops-q3-earnings-sales-estimates-2017-10-25
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nan
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nan
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Leading U.S. railroad operator Norfolk Southern Corp.NSC reported third-quarter 2017 earnings of $1.75 per share, surpassing the Zacks Consensus Estimate of $1.64. The bottom line also expanded 12.9% on a year-over-year basis. Results were aided by higher revenues.
Railway operating revenues in third-quarter 2017 came in at $2,670 million, above the Zacks Consensus Estimate of $2,630.3 million. The bottom line also improved 5.8% on a year-over-year basis. Overall volumes grew 4% on the back of impressive performances at key segments like coal and intermodal.
Income from railway operations climbed 11% year over year to $911 million. Operating expenses increased 3% year over year to $1,759 million. Markedly, Norfolk Southern revealed that operating ratio (operating expenses as a percentage of revenues) in the reported quarter improved to 65.9% from 67.5% in the third quarter of 2016. Operating ratio came in at 67.4% on a year-to-date basis.
Segmental Revenues
On a year-over-year basis, coal revenues surged 13.1% to $449 million.
Merchandise revenues increased 3.1% year over year to $1,600 million.
Intermodal revenues rose 8% year over year to $621 million.
Norfolk Souther Corporation Price, Consensus and EPS Surprise
Norfolk Souther Corporation Price, Consensus and EPS Surprise | Norfolk Souther Corporation Quote
Liquidity
This Zacks Rank #3 (Hold) exited the third quarter with cash and cash equivalents of $724 million compared with $956 million at the end of 2016. The company had long-term debt of $9,280 million compared with $9,562 million at the end of 2016. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. AAL , Southwest Airlines Co. LUV and Union Pacific Corp. UNP . All are scheduled to report their respective earnings numbers on Oct 26.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Southwest Airlines Company (LUV): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Union Pacific Corporation (UNP): Free Stock Analysis Report
Norfolk Souther Corporation (NSC): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Upcoming Releases Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. AAL , Southwest Airlines Co. LUV and Union Pacific Corp. UNP . Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. Leading U.S. railroad operator Norfolk Southern Corp.NSC reported third-quarter 2017 earnings of $1.75 per share, surpassing the Zacks Consensus Estimate of $1.64.
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Upcoming Releases Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. AAL , Southwest Airlines Co. LUV and Union Pacific Corp. UNP . Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. Norfolk Souther Corporation Price, Consensus and EPS Surprise Norfolk Souther Corporation Price, Consensus and EPS Surprise | Norfolk Souther Corporation Quote Liquidity This Zacks Rank #3 (Hold) exited the third quarter with cash and cash equivalents of $724 million compared with $956 million at the end of 2016.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. Upcoming Releases Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. AAL , Southwest Airlines Co. LUV and Union Pacific Corp. UNP . Railway operating revenues in third-quarter 2017 came in at $2,670 million, above the Zacks Consensus Estimate of $2,630.3 million.
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Upcoming Releases Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like American Airlines Group, Inc. AAL , Southwest Airlines Co. LUV and Union Pacific Corp. UNP . Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Union Pacific Corporation (UNP): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. Railway operating revenues in third-quarter 2017 came in at $2,670 million, above the Zacks Consensus Estimate of $2,630.3 million.
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7294.0
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2017-10-25 00:00:00 UTC
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First Week of AAL December 15th Options Trading
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AAL
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https://www.nasdaq.com/articles/first-week-aal-december-15th-options-trading-2017-10-25
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nan
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nan
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Investors in American Airlines Group Inc (Symbol: AAL) saw new options become available this week, for the December 15th expiration. At Stock Options Channel , our YieldBoost formula has looked up and down the AAL options chain for the new December 15th contracts and identified one put and one call contract of particular interest.
The put contract at the $50.00 strike price has a current bid of $1.57. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $50.00, but will also collect the premium, putting the cost basis of the shares at $48.43 (before broker commissions). To an investor already interested in purchasing shares of AAL, that could represent an attractive alternative to paying $51.47/share today.
Because the $50.00 strike represents an approximate 3% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 62%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract . Should the contract expire worthless, the premium would represent a 3.14% return on the cash commitment, or 22.45% annualized - at Stock Options Channel we call this the YieldBoost .
Below is a chart showing the trailing twelve month trading history for American Airlines Group Inc, and highlighting in green where the $50.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $55.00 strike price has a current bid of $1.00. If an investor was to purchase shares of AAL stock at the current price level of $51.47/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $55.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 8.80% if the stock gets called away at the December 15th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if AAL shares really soar, which is why looking at the trailing twelve month trading history for American Airlines Group Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAL's trailing twelve month trading history, with the $55.00 strike highlighted in red:
Considering the fact that the $55.00 strike represents an approximate 7% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 70%. On our website under the contract detail page for this contract , Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 1.94% boost of extra return to the investor, or 13.89% annualized, which we refer to as the YieldBoost .
The implied volatility in the put contract example is 31%, while the implied volatility in the call contract example is 30%. Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 253 trading day closing values as well as today's price of $51.47) to be 29%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the Nasdaq 100 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Of course, a lot of upside could potentially be left on the table if AAL shares really soar, which is why looking at the trailing twelve month trading history for American Airlines Group Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAL's trailing twelve month trading history, with the $55.00 strike highlighted in red: Considering the fact that the $55.00 strike represents an approximate 7% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in American Airlines Group Inc (Symbol: AAL) saw new options become available this week, for the December 15th expiration.
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Below is a chart showing AAL's trailing twelve month trading history, with the $55.00 strike highlighted in red: Considering the fact that the $55.00 strike represents an approximate 7% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in American Airlines Group Inc (Symbol: AAL) saw new options become available this week, for the December 15th expiration. At Stock Options Channel , our YieldBoost formula has looked up and down the AAL options chain for the new December 15th contracts and identified one put and one call contract of particular interest.
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Below is a chart showing AAL's trailing twelve month trading history, with the $55.00 strike highlighted in red: Considering the fact that the $55.00 strike represents an approximate 7% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in American Airlines Group Inc (Symbol: AAL) saw new options become available this week, for the December 15th expiration. At Stock Options Channel , our YieldBoost formula has looked up and down the AAL options chain for the new December 15th contracts and identified one put and one call contract of particular interest.
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At Stock Options Channel , our YieldBoost formula has looked up and down the AAL options chain for the new December 15th contracts and identified one put and one call contract of particular interest. Below is a chart showing AAL's trailing twelve month trading history, with the $55.00 strike highlighted in red: Considering the fact that the $55.00 strike represents an approximate 7% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in American Airlines Group Inc (Symbol: AAL) saw new options become available this week, for the December 15th expiration.
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7295.0
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2017-10-24 00:00:00 UTC
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Ryder System (R) Surpasses Q3 Earnings & Revenue Estimates
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AAL
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https://www.nasdaq.com/articles/ryder-system-r-surpasses-q3-earnings-revenue-estimates-2017-10-24
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nan
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nan
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Ryder System'sR third-quarter 2017 earnings (excluding 22 cents from non-recurring items) of $1.33 per share beat the Zacks Consensus Estimate of $1.29. However, the bottom line declined 20.4% on a year-over-year basis.
This year-over-year decline in earnings disappointed the investors. Consequently, shares of the company were down in early trading.
Ryder System reported total revenue of $1,848.5 million, which surpassed the Zacks Consensus Estimate of $1,806.4 million. Revenues increased 7.2% on a year-over-year basis with growth being witnessed in all segments.
Segment Results
Fleet Management Solutions : Total revenue was $1.20 billion, up 4% year over year. Operating revenues (revenues excluding fuel) came in at $1.03billion, up 3% year over year. Segmental results were aided by an increase in lease revenues on the back of a larger average fleet size.
Dedicated Transportation Solutions : Total revenue came in at $272million, up 4% from the year-ago quarter. Operating revenues (excluding fuel and subcontracted transportation) inched up 1% year over year to $198 million.
Supply Chain Solutions : Total revenue in the quarter under review was $496million, up 19% year over year. Operating revenues (revenues excluding fuel and subcontracted transportation) increased 9% year over year to $376 million.
Liquidity
Ryder System, which carries a Zacks Rank #2 (Buy), exited the third quarter with cash and cash equivalents of $65.3 million compared with $58.8 million at the end of 2016. The company had total debt of $5,349.2 million compared with $5,391.3 million at the end of 2016. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Ryder System, Inc. Price, Consensus and EPS Surprise
Ryder System, Inc. Price, Consensus and EPS Surprise | Ryder System, Inc. Quote
Guidance
The company now expects 2017 adjusted earnings in the band of $4.46-$4.56 per share compared with the previous range of $4.38-$4.58. The Zacks Consensus Estimate for 2017 is pegged at $4.44 per share. It expects fourth-quarter 2017 adjusted earnings per share in the band of $1.31-$1.41. The Zacks Consensus Estimate for the fourth quarter is pegged at $1.31 per share. Additionally, the company expects free cash flow of $250 million for full year 2017.
Other Important Releases Coming Up
Investors interested in the broader Transportation sector keenly await the third-quarter earnings reports of American Airlines Group Inc. AAL , Alaska Air Group, Inc. ALK and Norfolk Southern Corporation NSC . While Alaska Air Group andNorfolk Southern will report third-quarter earnings on Oct 25, American Airlines will reveal the same on Oct 26.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Alaska Air Group, Inc. (ALK): Free Stock Analysis Report
Ryder System, Inc. (R): Free Stock Analysis Report
Norfolk Souther Corporation (NSC): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Other Important Releases Coming Up Investors interested in the broader Transportation sector keenly await the third-quarter earnings reports of American Airlines Group Inc. AAL , Alaska Air Group, Inc. ALK and Norfolk Southern Corporation NSC . Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report Ryder System, Inc. (R): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. Ryder System'sR third-quarter 2017 earnings (excluding 22 cents from non-recurring items) of $1.33 per share beat the Zacks Consensus Estimate of $1.29.
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Other Important Releases Coming Up Investors interested in the broader Transportation sector keenly await the third-quarter earnings reports of American Airlines Group Inc. AAL , Alaska Air Group, Inc. ALK and Norfolk Southern Corporation NSC . Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report Ryder System, Inc. (R): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. Ryder System, Inc. Price, Consensus and EPS Surprise Ryder System, Inc. Price, Consensus and EPS Surprise | Ryder System, Inc. Quote Guidance The company now expects 2017 adjusted earnings in the band of $4.46-$4.56 per share compared with the previous range of $4.38-$4.58.
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Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report Ryder System, Inc. (R): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. Other Important Releases Coming Up Investors interested in the broader Transportation sector keenly await the third-quarter earnings reports of American Airlines Group Inc. AAL , Alaska Air Group, Inc. ALK and Norfolk Southern Corporation NSC . Operating revenues (revenues excluding fuel and subcontracted transportation) increased 9% year over year to $376 million.
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Other Important Releases Coming Up Investors interested in the broader Transportation sector keenly await the third-quarter earnings reports of American Airlines Group Inc. AAL , Alaska Air Group, Inc. ALK and Norfolk Southern Corporation NSC . Click to get this free report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report Ryder System, Inc. (R): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. Ryder System reported total revenue of $1,848.5 million, which surpassed the Zacks Consensus Estimate of $1,806.4 million.
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7296.0
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2017-10-24 00:00:00 UTC
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JetBlue's (JBLU) Q3 Earnings Top, Fall Y/Y on High Costs
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AAL
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https://www.nasdaq.com/articles/jetblues-jblu-q3-earnings-top-fall-y-y-on-high-costs-2017-10-24
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nan
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nan
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Low-cost carrier, JetBlue Airways Corporation 's JBLU third-quarter 2017 earnings of 55 cents per share beat the Zacks Consensus Estimate by 3 cents. Quarterly earnings, however, declined 5.2% from the year ago figure due to higher costs. The recent hurricanes also hurt results.
Operating revenues came in at $1,813 million, just ahead of the Zacks Consensus Estimate of $1,809.3 million. Revenues increased 4.7% from the year-ago figure. Passenger revenues, which accounted for bulk of the top line (89.5%), improved 3.3% in the third quarter of 2017. Other revenues increased 18.2%.
Operating Statistics
Capacity, measured in available seat miles, expanded 3.7% year over year. Traffic, measured in revenue passenger miles, grew 2.3% in the third quarter. Load factor (percentage of seats filled by passengers) declined 120 basis points (bps) year over year to 85.1% in the reported quarter as traffic growth was outpaced capacity expansion.
Yield per passenger mile improved 1% year over year to 13.32 cents in the reported quarter. While passenger revenue per available seat mile (PRASM: a key measure of unit revenue) declined 0.4% to 11.34 cents, operating revenue per available seat mile (RASM) increased 0.9% to 12.67 cents.
Expenses
In the third quarter, total operating expenses (on a reported basis) increased 9.1% year over year. Average fuel cost per gallon (including fuel taxes) escalated 14.9% to $1.69. Moreover, JetBlue's operating cost per available seat mile (CASM) increased 5.2% to 10.50 cents in the reported quarter. Excluding fuel, the metric also climbed 2.7% to 8.07 cents on the back of rise in labor costs.
JetBlue Airways Corporation Price, Consensus and EPS Surprise
JetBlue Airways Corporation Price, Consensus and EPS Surprise | JetBlue Airways Corporation Quote
Balance Sheet
JetBlue, carrying a Zacks Rank #5 (Strong Sell), exited the quarter with cash and cash equivalents of $394 million compared with $433 million at the end of 2016. Total debt, at the end of the quarter was $1,255 million than $1,384 million at the end of 2016. In fact, the company is constantly working toward reducing its debt levels.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Outlook
For the fourth quarter of 2017, the carrier expects capacity to increase between 4.5% and 5.5%. For the full-year 2017 the metric is anticipated to increase in the range of 4% to 5%. Consolidated operating cost per available seat mile, excluding fuel, is expected to grow in the band of 5% to 7% in the final quarter of 2017.
For the full-year 2017 the metric is still projected to grow in the range of 4% to 5%. Operating revenue per available seat mile (RASM) is anticipated to grow in the range of (3%) to 0% on a year-over-year basis.
Other Important Releases Coming Up
Investors interested in the Zacks Airline industry keenly await the third-quarter earnings reports of American Airlines Group Inc. AAL , Alaska Air Group, Inc. ALK and Norfolk Southern Corp. NSC . While Alaska Air Group and Norfolk Southern will report third-quarter earnings on Oct 25, American Airlines will reveal the same on Oct 26.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Alaska Air Group, Inc. (ALK): Free Stock Analysis Report
Norfolk Souther Corporation (NSC): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Other Important Releases Coming Up Investors interested in the Zacks Airline industry keenly await the third-quarter earnings reports of American Airlines Group Inc. AAL , Alaska Air Group, Inc. ALK and Norfolk Southern Corp. NSC . Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. Moreover, JetBlue's operating cost per available seat mile (CASM) increased 5.2% to 10.50 cents in the reported quarter.
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Other Important Releases Coming Up Investors interested in the Zacks Airline industry keenly await the third-quarter earnings reports of American Airlines Group Inc. AAL , Alaska Air Group, Inc. ALK and Norfolk Southern Corp. NSC . Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. JetBlue Airways Corporation Price, Consensus and EPS Surprise JetBlue Airways Corporation Price, Consensus and EPS Surprise | JetBlue Airways Corporation Quote Balance Sheet JetBlue, carrying a Zacks Rank #5 (Strong Sell), exited the quarter with cash and cash equivalents of $394 million compared with $433 million at the end of 2016.
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Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. Other Important Releases Coming Up Investors interested in the Zacks Airline industry keenly await the third-quarter earnings reports of American Airlines Group Inc. AAL , Alaska Air Group, Inc. ALK and Norfolk Southern Corp. NSC . While passenger revenue per available seat mile (PRASM: a key measure of unit revenue) declined 0.4% to 11.34 cents, operating revenue per available seat mile (RASM) increased 0.9% to 12.67 cents.
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Click to get this free report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. Other Important Releases Coming Up Investors interested in the Zacks Airline industry keenly await the third-quarter earnings reports of American Airlines Group Inc. AAL , Alaska Air Group, Inc. ALK and Norfolk Southern Corp. NSC . Operating Statistics Capacity, measured in available seat miles, expanded 3.7% year over year.
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7297.0
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2017-10-23 00:00:00 UTC
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Will Hurricanes Mar American Airlines (AAL) Q3 Earnings?
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AAL
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https://www.nasdaq.com/articles/will-hurricanes-mar-american-airlines-aal-q3-earnings-2017-10-23
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nan
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nan
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American Airlines GroupAAL is scheduled to report third-quarter 2017 results on Oct 26, before the market opens.
Last reported quarter, the company delivered a positive earnings surprise of 2.7%. It also has an impressive earnings history, beating the Zacks Consensus Estimate in three of the last four quarters with an average beat of 19.1%.
However, this Fort Worth, TX-based carrier is likely to face turbulence in the third quarter. Evidently, multiple headwinds including the back-to-back hurricanes (Harvey, Irma and Maria) have hurt the entire space.
The above hurricanes caused the company to call off approximately 8,000 flights in the third quarter. This negative sentiment surrounding the stock can be gauged from the fact that the stock has seen the Zacks Consensus Estimate for third-quarter earnings being revised 20.6% downward over the last 90 days.
Consequently, the stock has underperformed the Zacks Airline industry on a year-to-date basis. Shares of American Airlines have gained 11.2% compared with the industry's rally of 14.9%.
Let's delve deep to find out the factors likely to impact American Airlines' third-quarter results.
Owing to multiple flight cancellations, the company expects third-quarter pre-tax earnings to be affected to the tune of approximately $75 million. The carrier expects pre-tax margin, excluding special items, in the range of 9-11%. Increased costs (fuel and labor) are expected to hit the bottom line. Cost per available seat miles, excluding special items, is estimated to increase at approximately 4.5% in the third quarter owing to salary and benefit increases to employees. Fuel price per gallon is anticipated between $1.64 and $1.69 in the quarter.
Despite the disruptions, the scenario with respect to total revenue per available seat mile (TRASM) is an improved one from the year-ago quarter, courtesy better-than-expected yields. American Airlines expects total revenue per available seat mile (TRASM) for the third quarter to grow between 0.5% and 1.5%. The Zacks Consensus Estimate for third-quarter TRASM is pegged at 14.98 cents, higher than 14.73 cents reported in the third quarter of 2016. The Zacks Consensus Estimate for third-quarter yields is pegged at 15.56 cents, higher than 15.27 cents reported in the third quarter of 2016.
Apart from American Airlines, other carriers like Southwest Airlines LUV and JetBlue Airways JBLU are likely to be hurt by the natural calamities.
What Does Our Model Say?
Our proven model also does not show conclusively that American Airlines will beat on earnings in third-quarter 2017. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case as highlighted below.
Zacks ESP : American Airlines has an Earnings ESP of +1.41% as the Most Accurate estimate is pegged two cents above the Zacks Consensus Estimate of $1.39 per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Zacks Rank : American Airlines' Zacks Rank #5 (Strong Sell) acts as a spoiler. The bearish rank, combined with a positive Earnings ESP, leaves the surprise prediction inconclusive.
We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
A Transportation Gem
With American Airlines likely to disappoint, investors interested in the broader Transportation sector may consider Norfolk Southern Corporation NSC as our model shows that it possesses the right combination of elements to beat on earnings in the current reporting cycle.
Norfolk Southern has an Earnings ESP of +0.59% and a Zacks Rank #3. The company is slated to release third-quarter 2017 results on Oct 25. You can see the complete list of today's Zacks #1 Rank stocks here .
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Southwest Airlines Company (LUV): Free Stock Analysis Report
JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Norfolk Souther Corporation (NSC): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines GroupAAL is scheduled to report third-quarter 2017 results on Oct 26, before the market opens. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. Owing to multiple flight cancellations, the company expects third-quarter pre-tax earnings to be affected to the tune of approximately $75 million.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines GroupAAL is scheduled to report third-quarter 2017 results on Oct 26, before the market opens. Apart from American Airlines, other carriers like Southwest Airlines LUV and JetBlue Airways JBLU are likely to be hurt by the natural calamities.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines GroupAAL is scheduled to report third-quarter 2017 results on Oct 26, before the market opens. This negative sentiment surrounding the stock can be gauged from the fact that the stock has seen the Zacks Consensus Estimate for third-quarter earnings being revised 20.6% downward over the last 90 days.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines GroupAAL is scheduled to report third-quarter 2017 results on Oct 26, before the market opens. Cost per available seat miles, excluding special items, is estimated to increase at approximately 4.5% in the third quarter owing to salary and benefit increases to employees.
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7298.0
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2017-10-23 00:00:00 UTC
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Will Southwest Airlines (LUV) Disappoint in Q3 Earnings?
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AAL
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https://www.nasdaq.com/articles/will-southwest-airlines-luv-disappoint-in-q3-earnings-2017-10-23
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nan
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nan
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Southwest Airlines Co.LUV is scheduled to report third-quarter 2017 results on Oct 26, before the market opens.
In the second quarter of 2017, the carrier's earnings per share (on an adjusted basis) of $1.24 surpassed the Zacks Consensus Estimate of $1.20. The bottom line also improved 4.2% on a year-over-year basis. Operating revenues of $5,744 million was marginally above the Zacks Consensus Estimate of $5,733.2 million.
However, this Dallas-based low-cost carrier is likely to face turbulence in the to-be-reported quarter. The company's third-quarter results are expected to be hurt due to the recent hurricanes (Harvey, Irma and Maria) and the earthquake in Mexico. These natural disasters have forced the airline to cancel approximately 5,000 flights. Markedly, the negative sentiment surrounding the stock can be gauged from the fact that the Zacks Consensus Estimate for third-quarter earnings has moved down 22.3% over the last 90 days.
Consequently, the stock has struggled so far this year underperforming the Zacks Airline industry over the last six months. Shares of Southwest Airlines have gained 5.1% compared with the industry's rally of 5.9%.
Let's delve deep to find out the factors likely to impact Southwest Airlines' third-quarter results.
Owing to the multiple flight cancellations, the company expects third-quarter operating revenues are likely to be hurt to the tune of $100 million. Moreover, the carrier expects operating revenue per available seat mile (RASM) in the quarter to be flat to down 1% year over year. The Zacks Consensus Estimate for third-quarter passenger unit revenues is pegged at 12.33 cents, lower than 13.03 cents reported in the second quarter of 2017.
Increased costs (fuel and labor) are expected to hurt the bottom line. Cost per available seat miles, excluding special items, is estimated to increase between 3% and 4%. Fuel price per gallon is anticipated between $2.00 and $2.05 in the quarter. The Zacks Consensus Estimate for third-quarter fuel price is pegged at $2.00 per gallon, higher than $1.93 reported in the second quarter of 2017.
Apart from Southwest Airlines other carriers like American Airlines Group AAL and JetBlue Airways JBLU are also likely to be hurt by the natural calamities.
We are, however, appreciative of the company's efforts to enhance its shareholders' wealth through dividends and share buybacks. At its annual meeting of shareholders, Southwest Airlines announced that its board of directors approved a new share repurchase program worth $2 billion. Notably, share repurchases benefit a company's earnings per share by lowering outstanding share count.
What Does Our Model Say?
Our quantitative model does not conclusively show an earnings beat for Southwest Airlines in this quarter. This is because a stock needs to have combination of two key ingredients - a positive Earnings ESP and a Zacks Rank #3 (Hold) or better - to increase its odds of an earnings surprise. However, this is not the case as highlighted below.
Zacks ESP: Southwest Airlines has an Earnings ESP of -0.61%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Zacks Rank: Southwest Airlines' Zacks Rank #4 (Sell).
We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
A Transportation Gem
With Southwest Airlines likely to disappoint, investors interested in the broader transportation sector may consider Norfolk Southern Corporation NSC as our model shows that it possesses the right combination of elements to post an earnings beat in the current reporting cycle.
Norfolk Southern has an Earnings ESP of +0.59% and a Zacks Rank #3. The company is slated to release its third-quarter 2017 results on Oct 25. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Southwest Airlines Company (LUV): Free Stock Analysis Report
JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Norfolk Souther Corporation (NSC): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apart from Southwest Airlines other carriers like American Airlines Group AAL and JetBlue Airways JBLU are also likely to be hurt by the natural calamities. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. The company's third-quarter results are expected to be hurt due to the recent hurricanes (Harvey, Irma and Maria) and the earthquake in Mexico.
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Apart from Southwest Airlines other carriers like American Airlines Group AAL and JetBlue Airways JBLU are also likely to be hurt by the natural calamities. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Rank: Southwest Airlines' Zacks Rank #4 (Sell).
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. Apart from Southwest Airlines other carriers like American Airlines Group AAL and JetBlue Airways JBLU are also likely to be hurt by the natural calamities. Zacks Rank: Southwest Airlines' Zacks Rank #4 (Sell).
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Apart from Southwest Airlines other carriers like American Airlines Group AAL and JetBlue Airways JBLU are also likely to be hurt by the natural calamities. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Norfolk Souther Corporation (NSC): Free Stock Analysis Report To read this article on Zacks.com click here. In the second quarter of 2017, the carrier's earnings per share (on an adjusted basis) of $1.24 surpassed the Zacks Consensus Estimate of $1.20.
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7299.0
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2017-10-23 00:00:00 UTC
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Airline Hubs: Which Carrier Dominates Your Airport?
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AAL
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https://www.nasdaq.com/articles/airline-hubs-which-carrier-dominates-your-airport-2017-10-23
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nan
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nan
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Airline hubs are specific airports that an airline company uses as a transfer sport to get travelers to their intended destination. This system is part of the spoke-hub transportation model, which has been favored by many airlines since the industry was deregulated in 1978. The model consists of a system of connections in which all airline traffic moves across spokes linked to the hub at the center.
For example, Denver and Los Angeles represent hubs, with many spokes reaching outward to other cities. The purpose of this model is simple: to save airlines money and to provide passengers better routes to their selected destinations. Today, most airlines have at least one main airport that their flights must travel through, and from there, the flights go outwards on different network spokes.
So which airlines dominate which airports? Let's take a look at seven major U.S. airlines, and see where their hubs are located.
American Airlines AAL
The world's largest airline by fleet size and revenue, American Airlines has been an industry staple since its formation in 1930. The company is headquartered in Fort Worth, Texas, and since its merger with US Airways in 2013, American Airlines operates nine domestic hubs:
Dallas-Fort Worth International Airport
Charlotte-Douglas International Airport
Chicago O'Hare International Airport
Philadelphia International Airport
Phoenix Sky Harbor International Airport
Miami International Airport
Ronald Reagan Washington International Airport
Los Angeles Airport
New York City's John F. Kennedy International Airport
Alaska Airlines ALK
Alaska Airlines is American airline founded back in 1932. Originally offering flights from Anchorage, Alaska, the airlines today has flights to more than 100 destinations including Alaska, Hawaii, Canada, Costa Rica, and Mexico. Alaska Airlines' fleet consists of mostly Boeing (BA) 737 aircraft, as well as Bombardier and Embraer planes. The company has three main hubs:
Seattle-Tacoma International Airport
Portland International Airport
Ted Stevens Anchorage International Airport
And two focus cities:
San Diego International Airport
San Jose International Airport
Delta Airlines DAL
Like American, Delta has been present in the U.S. airline industry for decades. It began carrying passengers in 1929, and has grown rapidly since then due to many airline mergers. Headquartered in Atlanta, Georgia, Delta operates 10 domestic hubs:
Hartsfield-Jackson Atlanta International Airport
Detroit Metropolitan Wayne County Airport
Cincinnati/Northern Kentucky International Airport
JFK International Airport
New York City's La Guardia Airport
Boston Logan International Airport
Los Angeles International Airport
Minneapolis-St. Paul International Airport
Salt Lake City International Airport
Seattle-Tacoma International Airport
And three international hubs:
Amsterdam Airport Schiphol
Tokyo Narita International Airport
Paris-Charles de Gaulle Airport
Frontier Airlines
Founded in 1994, Frontier Airlines is a popular, privately-held, ultra-low-cost carrier headquartered in Denver Colorado. It recently announced a huge route expansion, and Frontier is adding 21 new destinations and 85 new routes to its network. Additionally, Frontier is adding dozens of non-stop flights between other cities that it already serves. With this network increase, Frontier's route map will grow to 82 cities by next summer. The airline operates out of one main hub:
Denver International Airport
And seven focus cities:
Cincinnati/Northern Kentucky International Airport
Cleveland Hopkins International Airport
Hartsfield-Jackson Atlanta International Airport
Las Vegas' McCarran International Airport
Orlando International Airport
Philadelphia International Airport
Trenton-Mercer Airport
JetBlue Airways JBLU
JetBlue is a popular low-cost airline option headquartered in Long Island in New York City. It serves 97 destinations in the U.S., Mexico, the Caribbean, Central America, and South America. JetBlue was founded in 1998, and primarily uses Airbus and Embraer aircraft. JetBlue utilizes the old0fashioned point-to-point system , which carries passengers short distances with few connecting flights, the airline operates out of six domestic focus cities:
JFK International Airport
Fort Lauderdale-Hollywood International Airport
Boston Logan International Airport
Long Beach Airport
San Juan's Luis Munoz Marin International Airport
Orlando International Airport
Southwest Airlines LUV
Touted as the world's largest low-cost carrier, Southwest Airlines was launched in 1967 and is known for its Rapid Rewards frequent-flyer program. Its headquarters is in Dallas, Texas. While Southwest does not use the hub and spoke transportation model (it prefers the point-to-point system like JetBlue) the airline still operates out of 10 major domestic cities:
Chicago Midway International Airport
Baltimore-Washington International Airport
McCarran International Airport
Dallas Love Field Airport
Denver International Airport
Phoenix Sky Harbor International Airport
Houston's William P. Hobby Airport
Hartsfield-Jackson Atlanta International Airport
Orlando International Airport
Los Angeles International Airport
United Continental Holdings UAL
Headquartered in Chicago, United Continental Holdings is an airline holding company for United Airlines and Continental Airlines, which formed in a merger back in 2010. Operating more than 700 mainline aircraft, United Continental needs a lot of hubs. The airline company has nine hubs in total, eight domestic:
Chicago O'Hare International Airport
Houston's George Bush Intercontinental Airport
Denver International Airport
Los Angeles International Airport
Newark Liberty International Airport
San Francisco International Airport
Washington Dulles International Airport
Guam A.B. Wan Pat International Airport
And one international:
Tokyo Narita International Airport
As you can see, these seven major airlines overlap in their hub or major operating city locations nationwide, which can be looked at as a positive thing for frequent travelers. The hub and spoke model offers each airline (even Southwest and JetBlue) a way to replace a high number of half-empty routes with fewer, fuller ones, leading to less delays and a wide variety of connections.
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Southwest Airlines Company (LUV): Free Stock Analysis Report
JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Alaska Air Group, Inc. (ALK): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines AAL The world's largest airline by fleet size and revenue, American Airlines has been an industry staple since its formation in 1930. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. The model consists of a system of connections in which all airline traffic moves across spokes linked to the hub at the center.
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Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines AAL The world's largest airline by fleet size and revenue, American Airlines has been an industry staple since its formation in 1930. The company is headquartered in Fort Worth, Texas, and since its merger with US Airways in 2013, American Airlines operates nine domestic hubs: Dallas-Fort Worth International Airport Charlotte-Douglas International Airport Chicago O'Hare International Airport Philadelphia International Airport Phoenix Sky Harbor International Airport Miami International Airport Ronald Reagan Washington International Airport Los Angeles Airport New York City's John F. Kennedy International Airport Alaska Airlines ALK Alaska Airlines is American airline founded back in 1932.
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American Airlines AAL The world's largest airline by fleet size and revenue, American Airlines has been an industry staple since its formation in 1930. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. The company is headquartered in Fort Worth, Texas, and since its merger with US Airways in 2013, American Airlines operates nine domestic hubs: Dallas-Fort Worth International Airport Charlotte-Douglas International Airport Chicago O'Hare International Airport Philadelphia International Airport Phoenix Sky Harbor International Airport Miami International Airport Ronald Reagan Washington International Airport Los Angeles Airport New York City's John F. Kennedy International Airport Alaska Airlines ALK Alaska Airlines is American airline founded back in 1932.
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American Airlines AAL The world's largest airline by fleet size and revenue, American Airlines has been an industry staple since its formation in 1930. Click to get this free report Southwest Airlines Company (LUV): Free Stock Analysis Report JetBlue Airways Corporation (JBLU): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Continental Holdings, Inc. (UAL): Free Stock Analysis Report American Airlines Group, Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Today, most airlines have at least one main airport that their flights must travel through, and from there, the flights go outwards on different network spokes.
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