Unnamed: 0
stringlengths 3
8
| Date
stringlengths 23
23
| Article_title
stringlengths 1
250
| Stock_symbol
stringlengths 1
5
| Url
stringlengths 44
135
| Publisher
stringclasses 1
value | Author
stringclasses 1
value | Article
stringlengths 1
343k
| Lsa_summary
stringlengths 3
53.9k
| Luhn_summary
stringlengths 1
53.9k
| Textrank_summary
stringlengths 1
53.9k
| Lexrank_summary
stringlengths 1
53.9k
|
|---|---|---|---|---|---|---|---|---|---|---|---|
8000.0
|
2016-04-22 00:00:00 UTC
|
Key Mornings Earnings for April 22: AAL, KMB, MCD
|
AAL
|
https://www.nasdaq.com/articles/key-mornings-earnings-april-22-aal-kmb-mcd-2016-04-22
|
nan
|
nan
|
As Q1 earnings season continues , more and more companies are starting to post their earnings results. Yesterday, two FANG stocks, Microsoft Corp. MSFT and Alphabet, Inc. GOOGL , reported their earnings results, as well as coffee giant Starbucks Corp. SBUX . While Alphabet and Microsoft missed earnings estimates, Starbucks managed to stay in-line with expectations; each company, however, saw their revenues decline on a sequential basis.
Friday morning saw a solid amount of companies report their results before the bell. Let's take a look.
American Airlines Group, Inc. AAL
The airliner reported better than expected earnings for its first quarter of fiscal 2016. Adjusted earnings per share came in at $1.25, topping the Zacks Consensus Estimate by 7 cents. Operating revenues were $9.44 billion, beating our consensus estimate of $9.43 billion but representing a 4% decrease from the year-ago period.
Kimberly-Clark Corp. KMB
Leading consumer products manufacturer Kimberly-Clark posted mixed Q1 results . The company reported adjusted earnings per share of $1.53, topping the Zacks Consensus Estimate of $1.51 and increasing 1.1% from the year-ago period. Revenues came in at $4.476 billion, slightly lagging behind our consensus estimate of $4.508 billion and declining 4.6% year-over-year.
McDonald's Corp. MCD
The iconic fast-food chain reported impressive Q1 results . Earnings came in at $1.23 per share, surpassing the Zacks Consensus Estimate of $1.16 per share. Revenues of $5.90 billion beat our consensus estimate of $5.87 billion. Global comps for Q1 grew 6.2%, comparing favorably to the 5% growth seen in the prior quarter. All of McDonald's segments posted positive comps.
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 >>
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
KIMBERLY CLARK (KMB): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
STARBUCKS CORP (SBUX): Free Stock Analysis Report
MCDONALDS CORP (MCD): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALPHABET INC-A (GOOGL): 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.
|
American Airlines Group, Inc. AAL The airliner reported better than expected earnings for its first quarter of fiscal 2016. Click to get this free report KIMBERLY CLARK (KMB): Free Stock Analysis Report MICROSOFT CORP (MSFT): Free Stock Analysis Report STARBUCKS CORP (SBUX): Free Stock Analysis Report MCDONALDS CORP (MCD): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALPHABET INC-A (GOOGL): Free Stock Analysis Report To read this article on Zacks.com click here. Yesterday, two FANG stocks, Microsoft Corp. MSFT and Alphabet, Inc. GOOGL , reported their earnings results, as well as coffee giant Starbucks Corp. SBUX .
|
Click to get this free report KIMBERLY CLARK (KMB): Free Stock Analysis Report MICROSOFT CORP (MSFT): Free Stock Analysis Report STARBUCKS CORP (SBUX): Free Stock Analysis Report MCDONALDS CORP (MCD): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALPHABET INC-A (GOOGL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group, Inc. AAL The airliner reported better than expected earnings for its first quarter of fiscal 2016. Yesterday, two FANG stocks, Microsoft Corp. MSFT and Alphabet, Inc. GOOGL , reported their earnings results, as well as coffee giant Starbucks Corp. SBUX .
|
Click to get this free report KIMBERLY CLARK (KMB): Free Stock Analysis Report MICROSOFT CORP (MSFT): Free Stock Analysis Report STARBUCKS CORP (SBUX): Free Stock Analysis Report MCDONALDS CORP (MCD): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALPHABET INC-A (GOOGL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group, Inc. AAL The airliner reported better than expected earnings for its first quarter of fiscal 2016. Yesterday, two FANG stocks, Microsoft Corp. MSFT and Alphabet, Inc. GOOGL , reported their earnings results, as well as coffee giant Starbucks Corp. SBUX .
|
Click to get this free report KIMBERLY CLARK (KMB): Free Stock Analysis Report MICROSOFT CORP (MSFT): Free Stock Analysis Report STARBUCKS CORP (SBUX): Free Stock Analysis Report MCDONALDS CORP (MCD): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALPHABET INC-A (GOOGL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group, Inc. AAL The airliner reported better than expected earnings for its first quarter of fiscal 2016. As Q1 earnings season continues , more and more companies are starting to post their earnings results.
|
8001.0
|
2016-04-22 00:00:00 UTC
|
Why American Airlines Group Inc (AAL), Microsoft Corporation (MSFT) and Starbucks Corporation (SBUX) Are 3 of Today’s Worst Stocks
|
AAL
|
https://www.nasdaq.com/articles/why-american-airlines-group-inc-aal-microsoft-corporation-msft-and-starbucks-corporation
|
nan
|
nan
|
InvestorPlace InvestorPlace - Stock Market News, Stock Advice & Trading Tips
It was touch and go all day for the market on the final day of the trading week, but when push came to shove as the closing bell rang, it was a stalemate. The S&P 500 ended the day at 2091.58, up just 0.10 points.
It could have been worse, however, and for owners of American Airlines Group Inc (NASDAQ: AAL ), Microsoft Corporation (NASDAQ: MSFT ) and Starbucks Corporation (NASDAQ: SBUX ), it was worse.
These three names lost an inordinate amount of ground today, mostly thanks to earnings and/or outlooks.
American Airlines Group Inc (AAL)
The good news is, American Airlines Group managed to top its first quarter estimates. The bad news is that the company isn't feeling too confident about the near future.
Last quarter, American Airlines earned $1.25 per share on revenue of $9.44 billion. Both were better than expectations of $1.18 per share and sales of $9.43 billion. Consolidated passenger revenue per available seat mile fell 7.5% as capacity growth outpaced actual demand, and was further crimped by lower fares stemming from cheaper jet fuel.
7 Stocks You Should Put Out to Pasture
In an indirect acknowledgement that headwinds are now blowing, the company asked that AAL shareholders brace for the likelihood that revenue was apt to remain suppressed in the near-term. Specifically, American Airlines believes its current-quarter PRASM will fall between 6% and 8% .
AAL closed 4.5% lower today.
Microsoft Corporation (MSFT)
The market had been giving Microsoft CEO Satya Nadella the benefit of the doubt of late, tolerating tepid earnings and revenue growth on hopes that the company's transition from a PC software company to a cloud-oriented company would eventually pay off.
With yet another quarter of lackluster progress on the fundamental front though, investors are starting to have their doubts … if Friday's 7% selloff is any indication.
Last quarter - the company's fiscal Q3 - Microsoft earned 62 cents per share on $22.08 billion in revenue . Problem is that the market had been expecting a profit of 64 cents per share of MSFT. The top line essentially matched the outlook for $22.09 billion, but it wasn't tough for traders to see the glass as half-empty with revenue falling 5.5% on a year-over-year basis.
Starbucks Corporation (SBUX)
Last but not least, Starbucks shares lost 5% of their value on Friday following its disappointing fiscal second quarter numbers.
Last quarter, Starbucks earned 39 cents per share on $4.99 billion in revenue . Income was in line with estimates, while missed expectations of $5.03 billion.
Nevertheless, both numbers were much better than the comparisons to the same quarter a year earlier, when Starbucks earned 33 cents per share on $4.56 billion worth of revenue. Same-store sales were up 6%, though analysts were looking for a 6.7% improvement.
The concerning change in the company's loyalty rewards program earlier this month doesn't appear to be an impasse … at least not yet. Those changes led to an 8% increase in participation , and domestic enrollment in the rewards program was up 16% on a year-over-year basis.
Still, investors have their doubts SBUX can justify its lofty valuation anytime soon.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
More From InvestorPlace
SunEdison Inc (SUNE) Pulls the Plug, Files for Bankruptcy
How IBM Management Makes It Look Like a Dud
Walt Disney Co (DIS) Should Never, Ever Buy NFLX
The post Why American Airlines Group Inc (AAL), Microsoft Corporation (MSFT) and Starbucks Corporation (SBUX) Are 3 of Today's Worst Stocks 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.
|
7 Stocks You Should Put Out to Pasture In an indirect acknowledgement that headwinds are now blowing, the company asked that AAL shareholders brace for the likelihood that revenue was apt to remain suppressed in the near-term. It could have been worse, however, and for owners of American Airlines Group Inc (NASDAQ: AAL ), Microsoft Corporation (NASDAQ: MSFT ) and Starbucks Corporation (NASDAQ: SBUX ), it was worse. American Airlines Group Inc (AAL) The good news is, American Airlines Group managed to top its first quarter estimates.
|
It could have been worse, however, and for owners of American Airlines Group Inc (NASDAQ: AAL ), Microsoft Corporation (NASDAQ: MSFT ) and Starbucks Corporation (NASDAQ: SBUX ), it was worse. American Airlines Group Inc (AAL) The good news is, American Airlines Group managed to top its first quarter estimates. More From InvestorPlace SunEdison Inc (SUNE) Pulls the Plug, Files for Bankruptcy How IBM Management Makes It Look Like a Dud Walt Disney Co (DIS) Should Never, Ever Buy NFLX The post Why American Airlines Group Inc (AAL), Microsoft Corporation (MSFT) and Starbucks Corporation (SBUX) Are 3 of Today's Worst Stocks appeared first on InvestorPlace .
|
It could have been worse, however, and for owners of American Airlines Group Inc (NASDAQ: AAL ), Microsoft Corporation (NASDAQ: MSFT ) and Starbucks Corporation (NASDAQ: SBUX ), it was worse. More From InvestorPlace SunEdison Inc (SUNE) Pulls the Plug, Files for Bankruptcy How IBM Management Makes It Look Like a Dud Walt Disney Co (DIS) Should Never, Ever Buy NFLX The post Why American Airlines Group Inc (AAL), Microsoft Corporation (MSFT) and Starbucks Corporation (SBUX) Are 3 of Today's Worst Stocks appeared first on InvestorPlace . American Airlines Group Inc (AAL) The good news is, American Airlines Group managed to top its first quarter estimates.
|
It could have been worse, however, and for owners of American Airlines Group Inc (NASDAQ: AAL ), Microsoft Corporation (NASDAQ: MSFT ) and Starbucks Corporation (NASDAQ: SBUX ), it was worse. American Airlines Group Inc (AAL) The good news is, American Airlines Group managed to top its first quarter estimates. 7 Stocks You Should Put Out to Pasture In an indirect acknowledgement that headwinds are now blowing, the company asked that AAL shareholders brace for the likelihood that revenue was apt to remain suppressed in the near-term.
|
8002.0
|
2016-04-21 00:00:00 UTC
|
United Continental's Revenue Slump Continues: Can American Airlines Do Better?
|
AAL
|
https://www.nasdaq.com/articles/united-continentals-revenue-slump-continues-can-american-airlines-do-better-2016-04-21
|
nan
|
nan
|
The three U.S. legacy carriers have encountered severe revenue pressure since early 2015 due to rising competition in the domestic market and the combined impact of the strong dollar, falling fuel surcharges, and weaker demand on international routes.
Last week, Delta Air Lines reported that unit revenue trends were starting to improve . However, on Wednesday afternoon, United Continental posted a steep unit revenue decline for Q1 and offered a gloomy forecast for Q2. This raises the stakes for American Airlines , which will report its earnings on Friday.
Weak unit revenue but solid Q1 earnings
Last quarter, United's revenue fell 4.8% year over year to $8.2 billion as passenger revenue per available seat mile (PRASM) slumped 7.4%.
PRASM slumped 7.4% at United last quarter. Image source: The Motley Fool.
However, the company was able to fully offset this revenue decline thanks to vastly lower fuel costs and a modest improvement in fuel efficiency. United's total fuel expense fell by 35% year over year, delivering more than $600 million of savings.
As a result, United managed to produce earnings per share of $1.23, just ahead of the average analyst estimate of $1.18.
Guidance is the problem
Airline investors are well aware of the revenue weakness that has affected all three legacy carriers since early 2015. However, with year-over-year comparisons starting to get easier in Q2, investors are hoping to see solid improvement over the next few quarters.
Delta Air Lines had some good news to report on this front. Delta's PRASM fell 4.6% in Q1, but the company projected a smaller 2.5% to 4.5% PRASM decline for Q2. Moreover, the company reiterated its forecast that unit revenue would return to growth at some point in 2016, and said that unit revenue would turn positive in the domestic market by the summer.
Unit revenue trends are starting to improve at Delta. Image source: The Motley Fool.
On the company's Januaryearnings call United's management projected sequential unit revenue improvements over the course of 2016. However, in an investor update released along with its earnings report on Wednesday, United forecast that PRASM would decline 6.5% to 8.5% in Q2. That's no better than its performance last quarter.
Some part of the unit revenue weakness is (deliberately) self-inflicted. United is in the midst of "upgauging" its fleet to larger aircraft. With more seats on each flight, unit revenue tends to be lower -- but this is more than offset by lower unit costs. However, this factor can only account for a small portion of United's ongoing unit revenue declines.
United is responding to the weak revenue outlook by dialing back its capacity growth. Back in January, the company said that it planned to increase capacity 1.5% to 2.5% year over year in 2016. Now it plans to increase capacity by just 1% to 2% for the full year. But cuts of this magnitude will only have a modest impact on United's unit revenue trajectory.
Can American Airlines do better?
Delta shareholders have no reason to worry about this weak outlook from United. Delta has consistently posted the best unit revenue performance of the three legacy carriers over the past year or so. There's no reason to doubt Delta's more optimistic revenue outlook.
On the other hand, American Airlines has had just as much revenue trouble as United over the past year. American projects that PRASM declined 7% to 8% last quarter.
Can American Airlines mirror Delta's unit revenue recovery? Image source: American Airlines.
United's weak unit revenue guidance has to make American Airlines investors nervous about whether American will provide equally dismal guidance when it reports earnings on Friday. Its larger domestic presence relative to United may help it a bit, but American's large footprint in Brazil remains a big liability due to the turbulent political and economic situation there.
Thus, it's possible that Delta Air Lines is pulling further ahead of its rivals in terms of unit revenue and profitability. But it's also possible that American will keep pace with Delta, while United Continental is falling further behind. We'll find out which is the case on Friday.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article United Continental's Revenue Slump Continues: Can American Airlines Do Better? originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
The three U.S. legacy carriers have encountered severe revenue pressure since early 2015 due to rising competition in the domestic market and the combined impact of the strong dollar, falling fuel surcharges, and weaker demand on international routes. Guidance is the problem Airline investors are well aware of the revenue weakness that has affected all three legacy carriers since early 2015. Its larger domestic presence relative to United may help it a bit, but American's large footprint in Brazil remains a big liability due to the turbulent political and economic situation there.
|
Last week, Delta Air Lines reported that unit revenue trends were starting to improve . Weak unit revenue but solid Q1 earnings Last quarter, United's revenue fell 4.8% year over year to $8.2 billion as passenger revenue per available seat mile (PRASM) slumped 7.4%. Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group.
|
Weak unit revenue but solid Q1 earnings Last quarter, United's revenue fell 4.8% year over year to $8.2 billion as passenger revenue per available seat mile (PRASM) slumped 7.4%. Moreover, the company reiterated its forecast that unit revenue would return to growth at some point in 2016, and said that unit revenue would turn positive in the domestic market by the summer. United's weak unit revenue guidance has to make American Airlines investors nervous about whether American will provide equally dismal guidance when it reports earnings on Friday.
|
Weak unit revenue but solid Q1 earnings Last quarter, United's revenue fell 4.8% year over year to $8.2 billion as passenger revenue per available seat mile (PRASM) slumped 7.4%. United's weak unit revenue guidance has to make American Airlines investors nervous about whether American will provide equally dismal guidance when it reports earnings on Friday. The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
8003.0
|
2016-04-21 00:00:00 UTC
|
Pre-Market Earnings Report for April 22, 2016 : GE, MCD, HON, KMB, CAT, LYB, SYF, AAL, STI, IPG, WBC, AN
|
AAL
|
https://www.nasdaq.com/articles/pre-market-earnings-report-april-22-2016-ge-mcd-hon-kmb-cat-lyb-syf-aal-sti-ipg-wbc-2016
|
nan
|
nan
|
The following companies are expected to report earnings prior to market open on 04/22/2016. Visit our Earnings Calendar for a full list of expected earnings releases.
General Electric Company ( GE ) is reporting for the quarter ending March 31, 2016. The diversified operations company's consensus earnings per share forecast from the 8 analysts that follow the stock is $0.21. This value represents a 32.26% decrease compared to the same quarter last year. In the past year GE has met analyst expectations once and beat the expectations the other three quarters. Zacks Investment Research reports that the 2016 Price to Earnings ratio for GE is 20.63 vs. an industry ratio of 23.30.
McDonald's Corporation ( MCD ) is reporting for the quarter ending March 31, 2016. The restaurant company's consensus earnings per share forecast from the 14 analysts that follow the stock is $1.16. This value represents a 5.45% increase compared to the same quarter last year. In the past year MCD has beat the expectations every quarter. The highest one was in the 4th calendar quarter where they beat the consensus by 4.07%. Zacks Investment Research reports that the 2016 Price to Earnings ratio for MCD is 23.72 vs. an industry ratio of 24.70.
Honeywell International Inc. ( HON ) is reporting for the quarter ending March 31, 2016. The diversified operations company's consensus earnings per share forecast from the 9 analysts that follow the stock is $1.50. This value represents a 6.38% increase compared to the same quarter last year. HON missed the consensus earnings per share in the 4th calendar quarter of 2015 by -0.63%. Zacks Investment Research reports that the 2016 Price to Earnings ratio for HON is 17.48 vs. an industry ratio of 23.30.
Kimberly-Clark Corporation ( KMB ) is reporting for the quarter ending March 31, 2016. The consumer company's consensus earnings per share forecast from the 5 analysts that follow the stock is $1.51. This value represents a 6.34% increase compared to the same quarter last year. KMB missed the consensus earnings per share in the 4th calendar quarter of 2015 by -1.39%. Zacks Investment Research reports that the 2016 Price to Earnings ratio for KMB is 22.09 vs. an industry ratio of 18.70, implying that they will have a higher earnings growth than their competitors in the same industry.
Caterpillar, Inc. ( CAT ) is reporting for the quarter ending March 31, 2016. The machinery company's consensus earnings per share forecast from the 6 analysts that follow the stock is $0.67. This value represents a 63.98% decrease compared to the same quarter last year. In the past year CAT has met analyst expectations once and beat the expectations the other three quarters. Zacks Investment Research reports that the 2016 Price to Earnings ratio for CAT is 21.97 vs. an industry ratio of 27.80.
LyondellBasell Industries NV ( LYB ) is reporting for the quarter ending March 31, 2016. The chemical company's consensus earnings per share forecast from the 9 analysts that follow the stock is $2.28. This value represents a 10.24% decrease compared to the same quarter last year. In the past year LYB has beat the expectations every quarter. The highest one was in the 4th calendar quarter where they beat the consensus by 4.27%. Zacks Investment Research reports that the 2016 Price to Earnings ratio for LYB is 9.47 vs. an industry ratio of 27.70.
Synchrony Financial ( SYF ) is reporting for the quarter ending March 31, 2016. The financial services company's consensus earnings per share forecast from the 6 analysts that follow the stock is $0.69. This value represents a 4.55% increase compared to the same quarter last year. In the past year SYF has beat the expectations every quarter. The highest one was in the 4th calendar quarter where they beat the consensus by 3.17%. Zacks Investment Research reports that the 2016 Price to Earnings ratio for SYF is 10.91 vs. an industry ratio of 22.80.
American Airlines Group, Inc. ( AAL ) is reporting for the quarter ending March 31, 2016. The airline company's consensus earnings per share forecast from the 8 analysts that follow the stock is $1.18. This value represents a 31.79% decrease compared to the same quarter last year. In the past year AAL has beat the expectations every quarter. The highest one was in the 4th calendar quarter where they beat the consensus by 2.04%. Zacks Investment Research reports that the 2016 Price to Earnings ratio for AAL is 6.69 vs. an industry ratio of 9.70.
SunTrust Banks, Inc. ( STI ) is reporting for the quarter ending March 31, 2016. The bank company's consensus earnings per share forecast from the 12 analysts that follow the stock is $0.76. This value represents a 2.56% decrease compared to the same quarter last year. In the past year STI has beat the expectations every quarter. The highest one was in the 4th calendar quarter where they beat the consensus by 4.6%. Zacks Investment Research reports that the 2016 Price to Earnings ratio for STI is 11.80 vs. an industry ratio of 13.00.
Interpublic Group of Companies, Inc. ( IPG ) is reporting for the quarter ending March 31, 2016. The advertising/marketing company's consensus earnings per share forecast from the 4 analysts that follow the stock is $-0.01. This value represents a 0.00% decrease compared to the same quarter last year. In the past year IPG has beat the expectations every quarter. The highest one was in the 4th calendar quarter where they beat the consensus by 6.45%. Zacks Investment Research reports that the 2016 Price to Earnings ratio for IPG is 17.90 vs. an industry ratio of 6.10, implying that they will have a higher earnings growth than their competitors in the same industry.
Wabco Holdings Inc. ( WBC ) is reporting for the quarter ending March 31, 2016. The auto (truck) company's consensus earnings per share forecast from the 8 analysts that follow the stock is $1.34. This value represents a 4.96% decrease compared to the same quarter last year. Zacks Investment Research reports that the 2016 Price to Earnings ratio for WBC is 19.98 vs. an industry ratio of 25.80.
AutoNation, Inc. ( AN ) is reporting for the quarter ending March 31, 2016. The retail company's consensus earnings per share forecast from the 9 analysts that follow the stock is $0.93. This value represents a 4.12% decrease compared to the same quarter last year. Zacks Investment Research reports that the 2016 Price to Earnings ratio for AN is 11.38 vs. an industry ratio of -8.20, implying that they will have a higher earnings growth than their competitors in the same industry.
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.
|
American Airlines Group, Inc. ( AAL ) is reporting for the quarter ending March 31, 2016. In the past year AAL has beat the expectations every quarter. Zacks Investment Research reports that the 2016 Price to Earnings ratio for AAL is 6.69 vs. an industry ratio of 9.70.
|
American Airlines Group, Inc. ( AAL ) is reporting for the quarter ending March 31, 2016. In the past year AAL has beat the expectations every quarter. Zacks Investment Research reports that the 2016 Price to Earnings ratio for AAL is 6.69 vs. an industry ratio of 9.70.
|
American Airlines Group, Inc. ( AAL ) is reporting for the quarter ending March 31, 2016. In the past year AAL has beat the expectations every quarter. Zacks Investment Research reports that the 2016 Price to Earnings ratio for AAL is 6.69 vs. an industry ratio of 9.70.
|
American Airlines Group, Inc. ( AAL ) is reporting for the quarter ending March 31, 2016. In the past year AAL has beat the expectations every quarter. Zacks Investment Research reports that the 2016 Price to Earnings ratio for AAL is 6.69 vs. an industry ratio of 9.70.
|
8004.0
|
2016-04-20 00:00:00 UTC
|
Spirit Airlines Beats Expectations Again
|
AAL
|
https://www.nasdaq.com/articles/spirit-airlines-beats-expectations-again-2016-04-20
|
nan
|
nan
|
After being forced to cut its guidance on multiple occasions from late 2014 through 2015, Spirit Airlines has returned to its winning ways. In January, the company dramatically boosted its Q4 margin guidance, offering hope that the unit revenue declines seen throughout 2015 were starting to moderate.
On Monday, Spirit offered up more evidence of a turnaround in unit revenue. It still has to make up a lot of ground to return to unit revenue growth, but revenue came in ahead of expectations for a second straight quarter, leading to a better-than-expected operating margin in Q1.
Spirit boosts its guidance again
In Q1 2015, Spirit Airlines achieved a remarkable 22.7% adjusted operating margin during what is traditionally the weakest quarter for the airline industry. However, revenue trends weakened throughout 2015 as airline capacity grew faster than demand and industry giants like Delta Air Lines and American Airlines started matching Spirit's low fares.
Spirit's unit revenue fell steeply in 2015. Image source: Spirit Airlines.
As a result, when Spirit provided its Q1 guidance back in February, it projected a profit decline. The company's operating margin forecast of 19%-20.5% was nothing to sneeze at, but it implied that earnings would be down about 10% year over year.
Fortunately, revenue trends improved over the course of the quarter. Total revenue per available seat mile (TRASM) still fell about 14% year over year, but management had warned in February that TRASM could fall 16%, in line with Spirit's Q4 unit revenue decline.
As a result, Spirit now expects to post a 21.5% operating margin when it reports earnings next week. That will still be down a bit compared to last year. However, this will be offset by higher revenue. The net result should be earnings equal to or better than last year's results.
Looking ahead
In this week's investor update, Spirit reiterated that "fares in our markets remain low": something that the company has stated repeatedly in the past six months. Thus, investors shouldn't expect a miraculous revenue recovery in the next quarter or two. Nevertheless, I do expect substantial sequential improvements going forward.
One source of improvement will be easier comparisons. Spirit's TRASM fell 9.9% year over year in Q1 2015, but the TRASM declines accelerated to 17.5% by Q3.
These declines reflected -- at least in part -- the increase in price-matching activity at American Airlines and Delta Air Lines during the course of 2015. While price-matching appears to be here to stay, the year-over-year impact will be much smaller by the second half of 2016.
Second, operational snafus related to unusually severe weather last June cost Spirit $5 million of revenue in Q2. The storms also drove up costs by $15 million. Under new CEO Bob Fornaro, Spirit Airlines is laser-focused on improving reliability, which should hopefully allow it to avoid similar problems this year.
Third, numerous airlines -- including American and Delta -- have estimated that industry capacity growth will slow noticeably as the year progresses. This should lead to better unit revenue trends.
Delta's domestic unit revenue is on the verge of returning to growth.
In fact, in the domestic market -- which represents most of Spirit's capacity -- Delta recently stated that fares for advance bookings have turned positive on a year-over-year basis. Most of the international markets that Spirit serves (such as Mexico and the Caribbean) are also seeing relatively favorable revenue trends. This bodes well for Spirit's performance in the months ahead.
Keeping profit moving in the right direction
Thanks to a relatively easy comparison, Spirit is likely to project modest margin expansion for Q2 in its guidance next week. Profit growth will be tougher in the second half of the year. Spirit expects non-fuel unit costs to rise in Q3 and Q4, and it will probably have a smaller benefit from fuel cost savings then.
Still, based on the projections from Delta and American for slowing industry capacity growth, Spirit's unit revenue trends may improve dramatically by the time the peak summer season rolls around. That would keep earnings moving steadily higher.
Spirit Airlines stock jumped 6% on Tuesday following the bullish investor update. But given Spirit's massive growth opportunities and its still-modest valuation of 12 times trailing earnings, there's clearly a ton of upside left here for investors.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article Spirit Airlines Beats Expectations Again originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of Spirit Airlines and is long Jan. 2017 $40 calls on Delta Air Lines, long Jan. 2017 $30 calls on American Airlines Group, and long June 2016 $30 calls on Spirit Airlines. The Motley Fool is long Jan. 2017 $35 calls on American Airlines Group. The Motley Fool recommends Spirit Airlines. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
In fact, in the domestic market -- which represents most of Spirit's capacity -- Delta recently stated that fares for advance bookings have turned positive on a year-over-year basis. Keeping profit moving in the right direction Thanks to a relatively easy comparison, Spirit is likely to project modest margin expansion for Q2 in its guidance next week. Still, based on the projections from Delta and American for slowing industry capacity growth, Spirit's unit revenue trends may improve dramatically by the time the peak summer season rolls around.
|
However, revenue trends weakened throughout 2015 as airline capacity grew faster than demand and industry giants like Delta Air Lines and American Airlines started matching Spirit's low fares. Still, based on the projections from Delta and American for slowing industry capacity growth, Spirit's unit revenue trends may improve dramatically by the time the peak summer season rolls around. Adam Levine-Weinberg owns shares of Spirit Airlines and is long Jan. 2017 $40 calls on Delta Air Lines, long Jan. 2017 $30 calls on American Airlines Group, and long June 2016 $30 calls on Spirit Airlines.
|
Spirit boosts its guidance again In Q1 2015, Spirit Airlines achieved a remarkable 22.7% adjusted operating margin during what is traditionally the weakest quarter for the airline industry. Total revenue per available seat mile (TRASM) still fell about 14% year over year, but management had warned in February that TRASM could fall 16%, in line with Spirit's Q4 unit revenue decline. Adam Levine-Weinberg owns shares of Spirit Airlines and is long Jan. 2017 $40 calls on Delta Air Lines, long Jan. 2017 $30 calls on American Airlines Group, and long June 2016 $30 calls on Spirit Airlines.
|
It still has to make up a lot of ground to return to unit revenue growth, but revenue came in ahead of expectations for a second straight quarter, leading to a better-than-expected operating margin in Q1. Spirit boosts its guidance again In Q1 2015, Spirit Airlines achieved a remarkable 22.7% adjusted operating margin during what is traditionally the weakest quarter for the airline industry. Fortunately, revenue trends improved over the course of the quarter.
|
8005.0
|
2016-04-19 00:00:00 UTC
|
Earnings Alert: Which Airline Stocks WIll Hit Turbulence This Season?
|
AAL
|
https://www.nasdaq.com/articles/earnings-alert-which-airline-stocks-will-hit-turbulence-season-2016-04-19
|
nan
|
nan
|
It is earnings season and we are taking a look at the top industries in this earnings spotlight series. Today's report focuses on the airline industry as expectations are definitely high for the space. Not only is the airline sector facing reduced competition and seeing lower fuel prices, but it has a Zacks Industry Rank in the top 40% too.
Five key companies are due up in the days ahead, starting with United Continental (UAL) on Wednesday. Recent estimates have been a bit higher here, but will it be enough to beat out expectations? We take a closer look at the chart and recent performance for some possible clues. We also discuss Southwest Airlines (LUV) and if this low-cost airline can keep its winning streak alive, along with what investors need to watch for this company in the weeks ahead.
There are also two Zacks Rank #4 (Sell) stocks reporting this week, including Hawaiian (HA) and American (AAL). We find out what the trends have been in both, and where investors might be facing more turbulence after their reports.
And finally, investors have Alaska Airlines (ALK) which recently moved to acquire rival Virgin America (VA). Estimates haven't been trending in the right direction for this stock, but buyout news is likely to dominate the headlines for ALK this week, as well as their plans for the new combined company.
Watch the video for more earnings insights and a closer look at the charts for these airline stocks. And make sure to tune in later in the week for more analysis of company reports!
Want more insights from Zacks? See our latest free report 5 Stocks to Double . Click here to receive this free report now >>>
Author owns LUV in a personal account.
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 AIR (LUV): Free Stock Analysis Report
HAWAIIAN HLDGS (HA): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
VIRGIN AMERICA (VA): 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.
|
There are also two Zacks Rank #4 (Sell) stocks reporting this week, including Hawaiian (HA) and American (AAL). Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. Not only is the airline sector facing reduced competition and seeing lower fuel prices, but it has a Zacks Industry Rank in the top 40% too.
|
There are also two Zacks Rank #4 (Sell) stocks reporting this week, including Hawaiian (HA) and American (AAL). Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report VIRGIN AMERICA (VA): 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.
|
There are also two Zacks Rank #4 (Sell) stocks reporting this week, including Hawaiian (HA) and American (AAL). Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report VIRGIN AMERICA (VA): 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.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. There are also two Zacks Rank #4 (Sell) stocks reporting this week, including Hawaiian (HA) and American (AAL). Not only is the airline sector facing reduced competition and seeing lower fuel prices, but it has a Zacks Industry Rank in the top 40% too.
|
8006.0
|
2016-04-19 00:00:00 UTC
|
Airlines Will Have to Fight for Slots in Tokyo Again
|
AAL
|
https://www.nasdaq.com/articles/airlines-will-have-fight-slots-tokyo-again-2016-04-19
|
nan
|
nan
|
In the past few years, Delta Air Lines , American Airlines , United Continental , and Hawaiian Holdings have repeatedly clashed about four slots reserved for U.S. airlines at Tokyo's Haneda Airport.
Airlines have fought over access to Haneda Airport in recent years. Image source: American Airlines.
Now they're going to have to do it all over again. Last week, the Department of Transportation finalized its decision to start from scratch in allocating Haneda flights now that U.S. airlines will no longer be limited to overnight operations there.
Haneda Airport opens a little further
From 1978 to 2010, Haneda Airport was closed to flights from the U.S. Long-haul international flights were all required to use the newer Narita Airport, which is nearly 40 miles from central Tokyo.
Since late 2010, the U.S. government has been allowed to allocate four daily flights to Haneda, but all takeoffs and landings have been relegated to the undesirable 10 p.m.-7 a.m. window. Japanese carriers have been allowed to operate another four daily roundtrips from Haneda to the U.S.
All four U.S. airlines that serve Haneda have been pushing the U.S. government to negotiate for better access to that critical airport. Delta has been particularly strident, calling for open access to Haneda.
The airlines are finally getting their wish, to some extent. In February, the U.S. and Japan reached a new agreement that will allow U.S. carriers to operate six daily roundtrips to Haneda Airport -- five of which will be during the daytime.
Delta goes its own way again
Following this agreement, American Airlines, Hawaiian Holdings, and United Continental all asked the DOT to let them move their nighttime Haneda flights to the new daytime slots. If they (and Delta) had been allowed to do so, it would have left just one remaining daytime slot and one nighttime slot for the DOT to allocate.
United Airlines hoped to keep its Haneda slot without having to bid again.
Instead, the DOT plans to run a full allocation proceeding to determine which routes to Haneda would best serve the public interest. It thinks that daytime slots will make far more routes viable than was the case when Haneda operations were limited to the overnight hours. Most notably, routes to the eastern half of the U.S. -- which all failed previously -- may now be workable.
This means that some of the airlines that currently fly to Haneda could potentially lose their route authorities. Delta Air Lines was the only carrier to support this reallocation process.
Delta's gambit is unlikely to pay off
Based on Delta's support for reallocating the Haneda slots, there's a good chance that it will request all five daytime slots. This would also fit with the company's long-standing demand that the U.S. pursue the removal of all restrictions on flights to Haneda Airport.
Delta believes that its mini-hub at Narita Airport is in grave danger. American Airlines and United Continental both have joint venture partners in Japan with hubs at both Narita and Haneda. This allows them to offer greater access to Haneda Airport and numerous connecting opportunities at both airports, which Delta can't hope to match.
Delta will likely argue that United and American already control half of the slots for U.S.-Haneda flights through their Japanese joint venture partners -- and that Delta should receive the other five daytime slots to create competition. (It might let Hawaiian Airlines keep the remaining nighttime slot.)
Delta may ask for all five daytime Haneda slots.
However, the DOT has shown a tendency to divide assets like these Haneda route authorities relatively evenly. The agency's main goal seems to be giving cities like New York, Chicago, Detroit, Washington, D.C., and Atlanta a shot at nonstop service to Haneda. It would be very surprising to see it hand out more than two (or, at most, three) frequencies to any one airline.
Who wins? Who loses?
In all likelihood, this new route allocation proceeding won't lead to radical changes. American, Delta, and United all have the inside track in terms of moving their existing flights to daytime slots. The one possible exception is the Los Angeles-Haneda route, which American and Delta both serve today. The DOT may opt to drop one of those flights to provide more geographical diversity, but the loser would probably be awarded a different route.
In allocating the other two daytime slots, the DOT will look at which cities have the greatest demand for service to Haneda and will likely award the routes accordingly. New York, Chicago, and Detroit all seem like plausible options. Each of the legacy carriers has hubs in two of the three cities, so it should be a fair fight.
Hawaiian Airlines looks like the loser in this allocation proceeding. In a sense, it's a victim of its own success. Because its existing Haneda-Honolulu route has worked well during the overnight hours -- unlike other airlines' current Haneda flights -- the DOT will probably award it the remaining nighttime slot.
Hawaiian Holdings may not snag a daytime slot at Haneda Airport. Image source: Wikimedia Commons .
Given the DOT's interest in geographical diversity, Hawaiian is unlikely to secure a second route authority. By contrast, if it had been allowed to move its existing flight to a daytime slot, Hawaiian would have had a good chance of picking up the nighttime slot as a growth opportunity rather than a fallback option.
Even so, Hawaiian will end up no worse off than it is today. That's the nice thing about the DOT reallocating these routes -- it may be a bit of a headache, but all of the airlines should benefit.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article Airlines Will Have to Fight for Slots in Tokyo Again originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of Hawaiian Holdings, and United Continental Holdings, and is long Jan. 2017 $40 calls on Delta Air Lines, long Jan. 2017 $30 calls on American Airlines Group, and short Oct. 2016 $50 calls on Hawaiian Holdings, The Motley Fool is long Jan. 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
Last week, the Department of Transportation finalized its decision to start from scratch in allocating Haneda flights now that U.S. airlines will no longer be limited to overnight operations there. Delta goes its own way again Following this agreement, American Airlines, Hawaiian Holdings, and United Continental all asked the DOT to let them move their nighttime Haneda flights to the new daytime slots. Because its existing Haneda-Honolulu route has worked well during the overnight hours -- unlike other airlines' current Haneda flights -- the DOT will probably award it the remaining nighttime slot.
|
In the past few years, Delta Air Lines , American Airlines , United Continental , and Hawaiian Holdings have repeatedly clashed about four slots reserved for U.S. airlines at Tokyo's Haneda Airport. Delta goes its own way again Following this agreement, American Airlines, Hawaiian Holdings, and United Continental all asked the DOT to let them move their nighttime Haneda flights to the new daytime slots. Adam Levine-Weinberg owns shares of Hawaiian Holdings, and United Continental Holdings, and is long Jan. 2017 $40 calls on Delta Air Lines, long Jan. 2017 $30 calls on American Airlines Group, and short Oct. 2016 $50 calls on Hawaiian Holdings, The Motley Fool is long Jan. 2017 $35 calls on American Airlines Group.
|
In the past few years, Delta Air Lines , American Airlines , United Continental , and Hawaiian Holdings have repeatedly clashed about four slots reserved for U.S. airlines at Tokyo's Haneda Airport. Delta goes its own way again Following this agreement, American Airlines, Hawaiian Holdings, and United Continental all asked the DOT to let them move their nighttime Haneda flights to the new daytime slots. Adam Levine-Weinberg owns shares of Hawaiian Holdings, and United Continental Holdings, and is long Jan. 2017 $40 calls on Delta Air Lines, long Jan. 2017 $30 calls on American Airlines Group, and short Oct. 2016 $50 calls on Hawaiian Holdings, The Motley Fool is long Jan. 2017 $35 calls on American Airlines Group.
|
In the past few years, Delta Air Lines , American Airlines , United Continental , and Hawaiian Holdings have repeatedly clashed about four slots reserved for U.S. airlines at Tokyo's Haneda Airport. In allocating the other two daytime slots, the DOT will look at which cities have the greatest demand for service to Haneda and will likely award the routes accordingly. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
|
8007.0
|
2016-04-14 00:00:00 UTC
|
The Zacks Analyst Blog Highlights: American Airlines Group, Southwest Airlines, JetBlue Airways, United Continental and Delta Air Lines
|
AAL
|
https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-american-airlines-group-southwest-airlines-jetblue
|
nan
|
nan
|
For Immediate Release
Chicago, IL - April 14, 2016 - 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 Group ( AAL ), Southwest Airlines Co. ( LUV ), JetBlue Airways Corporation ( JBLU ), United Continental Holdings ( UAL ) and Delta Air Lines ( DAL ).
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
The past week saw heavyweights in the airline space like American Airlines Group ( AAL ), and Southwest Airlines Co. ( LUV ) revealing their traffic numbers for the month of March. As was the case in February, March traffic numbers from major carriers like JetBlue Airways Corporation ( JBLU ) saw a decline in load factor (% of seats filled with passengers) as capacity expansion outweighed growth in traffic.
The traffic reports apart, United Continental Holdings' ( UAL ) announcement of not proceeding with its previous plan to buy slots from Delta Air Lines ( DAL ) at the Newark Liberty International Airport, grabbed headlines. By virtue of this move, the Chicago-based carrier has called off efforts to expand its already strong position at Newark.
Read the last Airline Stock Roundup for Apr 06, 2016 .
Recap of the Past Week's Most Important Stories
1. United Continental has retracted on its plans to expand further at the Newark Liberty International Airport, thereby vindicating the stance of the U.S. Justice Department. United Continental's decision to call off its purchase agreement with Delta follows the Federal Aviation Administration's decision, announced on Apr 1, 2016, to lift controls over the number of takeoffs/arrivals per hour at Newark (read more: United Continental to No Longer Buy Newark Slots from Delta ).
On a separate note, United Continental's March traffic numbers were disappointing with all 3 important metrics viz. capacity, air traffic and load factor declining. Moreover, the carrier's forecast with respect to passenger revenue per available seat mile (PRASM: a key measure of unit revenue) for the first quarter of 2016 is also disappointing (read more: United Airlines March Traffic Falls, Q1 PRASM Likely to Drop ).
2. Southwest Airlines announced strong traffic numbers for March 2016 with revenue passenger miles (RPMs: a measure of air traffic) improving 6.2% on a year-over-year basis to 10.9 billion. Available seat miles (ASMs: a measure of capacity) climbed 6.1% to 12.9 billion. The carrier still expects operating revenue per ASM (RASM: a key measure of unit revenue) to be flat on a year-over-year basis in the first quarter of 2016 (read more: Southwest Airlines March Traffic Up, RASM View Maintained ).
3. Traffic at American Airlines Group climbed 3.3% with capacity expanding 3.8%. Load factor declined 40 basis points to 81.7% in Mar 2016. The carrier expects PRASM to decline in the band of 7% to 8% in the first quarter of 2016 (read more American Airlines March Traffic Up, Q1 PRASM View Soft ).
4. In line with its efforts to better customer service, low-cost carrier JetBlue Airways announced that it intends to expand its premium "Mint" service to include key destinations along the West Coast.
On the traffic front, the carrier announced a 12.1% increase in its March air traffic on a 12.5% capacity expansion. Load factor declined 40 basis points to 86.8% as capacity expansion outweighed traffic growth. March 2016 PRASM at the Long Island City, NY carrier declined approximately 7% on a year-over-year basis.
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 >>
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.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today . Find out What is happening in the stock market today on zacks.com.
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
AMER AIRLINES (AAL): Free Stock Analysis Report
SOUTHWEST AIR (LUV): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
DELTA AIR LINES (DAL): 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.
|
Stocks recently featured in the blog include American Airlines Group ( AAL ), Southwest Airlines Co. ( LUV ), JetBlue Airways Corporation ( JBLU ), United Continental Holdings ( UAL ) and Delta Air Lines ( DAL ). Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup The past week saw heavyweights in the airline space like American Airlines Group ( AAL ), and Southwest Airlines Co. ( LUV ) revealing their traffic numbers for the month of March. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
Stocks recently featured in the blog include American Airlines Group ( AAL ), Southwest Airlines Co. ( LUV ), JetBlue Airways Corporation ( JBLU ), United Continental Holdings ( UAL ) and Delta Air Lines ( DAL ). Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here. Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup The past week saw heavyweights in the airline space like American Airlines Group ( AAL ), and Southwest Airlines Co. ( LUV ) revealing their traffic numbers for the month of March.
|
Stocks recently featured in the blog include American Airlines Group ( AAL ), Southwest Airlines Co. ( LUV ), JetBlue Airways Corporation ( JBLU ), United Continental Holdings ( UAL ) and Delta Air Lines ( DAL ). Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup The past week saw heavyweights in the airline space like American Airlines Group ( AAL ), and Southwest Airlines Co. ( LUV ) revealing their traffic numbers for the month of March. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
Stocks recently featured in the blog include American Airlines Group ( AAL ), Southwest Airlines Co. ( LUV ), JetBlue Airways Corporation ( JBLU ), United Continental Holdings ( UAL ) and Delta Air Lines ( DAL ). Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup The past week saw heavyweights in the airline space like American Airlines Group ( AAL ), and Southwest Airlines Co. ( LUV ) revealing their traffic numbers for the month of March. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
8008.0
|
2016-04-14 00:00:00 UTC
|
S&P 500 Movers: STX, AAL
|
AAL
|
https://www.nasdaq.com/articles/sp-500-movers-stx-aal-2016-04-14
|
nan
|
nan
|
In early trading on Thursday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the S&P 500 index, trading up 3.4%. Year to date, American Airlines Group has lost about 2.5% of its value.
And the worst performing S&P 500 component thus far on the day is Seagate Technology ( STX ), trading down 17.2%. Seagate Technology is lower by about 23.4% looking at the year to date performance.
Two other components making moves today are Western Digital ( WDC ), trading down 9.1%, and Chipotle Mexican Grill ( CMG ), trading up 3.1% on the day.
VIDEO: S&P 500 Movers: STX, 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.
|
In early trading on Thursday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the S&P 500 index, trading up 3.4%. VIDEO: S&P 500 Movers: STX, 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 S&P 500 component thus far on the day is Seagate Technology ( STX ), trading down 17.2%.
|
VIDEO: S&P 500 Movers: STX, AAL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. In early trading on Thursday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the S&P 500 index, trading up 3.4%. Year to date, American Airlines Group has lost about 2.5% of its value.
|
In early trading on Thursday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the S&P 500 index, trading up 3.4%. VIDEO: S&P 500 Movers: STX, AAL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Two other components making moves today are Western Digital ( WDC ), trading down 9.1%, and Chipotle Mexican Grill ( CMG ), trading up 3.1% on the day.
|
In early trading on Thursday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the S&P 500 index, trading up 3.4%. VIDEO: S&P 500 Movers: STX, 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 S&P 500 component thus far on the day is Seagate Technology ( STX ), trading down 17.2%.
|
8009.0
|
2016-04-14 00:00:00 UTC
|
Airline ETF Finds Tailwind from Soaring Delta Profits
|
AAL
|
https://www.nasdaq.com/articles/airline-etf-finds-tailwind-soaring-delta-profits-2016-04-14
|
nan
|
nan
|
Delta Air Lines ( DAL ) revealed a strong first quarter earnings on higher cost savings, lifting the lone airline industry-related exchange traded fund.
The U.S. Global Jets ETF (NYSEArca: JETS ) , the only dedicated airline industry-related ETF on the market, gained 1.6% Thursday after Delta Air Lines reported earnings. JETS increased 14.3% over the past three months and rose 2.5% year-to-date.
Airline stocks rallied Thursday on Delta Air Lines' strong first quarter earnings. Delta Air Lines' first quarter earnings surged 27% to $946 million, capitalizing on cheaper fuel costs, reports David Koenig for the Associated Press .
The airline spent about one-third less on fuel, compared to the same period year-over-year, which resulted in a savings of more than $700 million. The savings helped offset higher spending costs on labor, notably profit sharing for employees.
Additionally, airliner reassured markets of its focus on continued growth and consumer retention.
"We are focused on getting unit revenues back to a positive trajectory and we will make adjustments to our fall capacity levels if we are not making sufficient progress over the coming months," said Delta exec Glen Hauenstein, who will become Delta's president or second-ranking executive next month.
DAL shares rose 1.6% Thursday.
Trending on ETF Trends
Investors Embrace Value ETFs After Renewed Attention
A Bearish Call on a Big Utilities ETF
Transportation ETFs Move Back on Track
Equity Energy ETFs Keep Moving Higher
Oil Services ETF Tries to Keep the Party Going
Leading the sector higher on Thursday, JetBlue ( JBLU ) was up 3.9%, Spirit Airlines ( SAVE ) was up 3.3%, American Airlines Group ( AAL ) was up 3.3%, United Continental ( UAL ) was up 2.5% and Southwest Airlines (LUV) was up 2.3%.
The airline ETF includes a heavy tilt toward the top four airlines, including 12.2% LUV, 11.7% DAL, 11.5% AAL and 11.3% UAL, along with 3.8% in JBLU.
Airline industry observers, though, should watch for potential rough patches ahead. For instance, oil prices have jumped almost 60% off their mid-February lows, which will increase jet fuel costs. Labor costs are increasing as employees demand higher wages and profit sharing. Airfares have dipped. Geographical risks, such as terror attacks and the Zika virus, have weighed on vacationers' sentiment.
U.S. Global Jets ETF
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
This article was provided by our partner Tom Lydon of etftrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
Trending on ETF Trends Investors Embrace Value ETFs After Renewed Attention A Bearish Call on a Big Utilities ETF Transportation ETFs Move Back on Track Equity Energy ETFs Keep Moving Higher Oil Services ETF Tries to Keep the Party Going Leading the sector higher on Thursday, JetBlue ( JBLU ) was up 3.9%, Spirit Airlines ( SAVE ) was up 3.3%, American Airlines Group ( AAL ) was up 3.3%, United Continental ( UAL ) was up 2.5% and Southwest Airlines (LUV) was up 2.3%. The airline ETF includes a heavy tilt toward the top four airlines, including 12.2% LUV, 11.7% DAL, 11.5% AAL and 11.3% UAL, along with 3.8% in JBLU. Delta Air Lines ( DAL ) revealed a strong first quarter earnings on higher cost savings, lifting the lone airline industry-related exchange traded fund.
|
Trending on ETF Trends Investors Embrace Value ETFs After Renewed Attention A Bearish Call on a Big Utilities ETF Transportation ETFs Move Back on Track Equity Energy ETFs Keep Moving Higher Oil Services ETF Tries to Keep the Party Going Leading the sector higher on Thursday, JetBlue ( JBLU ) was up 3.9%, Spirit Airlines ( SAVE ) was up 3.3%, American Airlines Group ( AAL ) was up 3.3%, United Continental ( UAL ) was up 2.5% and Southwest Airlines (LUV) was up 2.3%. The airline ETF includes a heavy tilt toward the top four airlines, including 12.2% LUV, 11.7% DAL, 11.5% AAL and 11.3% UAL, along with 3.8% in JBLU. Delta Air Lines ( DAL ) revealed a strong first quarter earnings on higher cost savings, lifting the lone airline industry-related exchange traded fund.
|
Trending on ETF Trends Investors Embrace Value ETFs After Renewed Attention A Bearish Call on a Big Utilities ETF Transportation ETFs Move Back on Track Equity Energy ETFs Keep Moving Higher Oil Services ETF Tries to Keep the Party Going Leading the sector higher on Thursday, JetBlue ( JBLU ) was up 3.9%, Spirit Airlines ( SAVE ) was up 3.3%, American Airlines Group ( AAL ) was up 3.3%, United Continental ( UAL ) was up 2.5% and Southwest Airlines (LUV) was up 2.3%. The airline ETF includes a heavy tilt toward the top four airlines, including 12.2% LUV, 11.7% DAL, 11.5% AAL and 11.3% UAL, along with 3.8% in JBLU. Delta Air Lines ( DAL ) revealed a strong first quarter earnings on higher cost savings, lifting the lone airline industry-related exchange traded fund.
|
Trending on ETF Trends Investors Embrace Value ETFs After Renewed Attention A Bearish Call on a Big Utilities ETF Transportation ETFs Move Back on Track Equity Energy ETFs Keep Moving Higher Oil Services ETF Tries to Keep the Party Going Leading the sector higher on Thursday, JetBlue ( JBLU ) was up 3.9%, Spirit Airlines ( SAVE ) was up 3.3%, American Airlines Group ( AAL ) was up 3.3%, United Continental ( UAL ) was up 2.5% and Southwest Airlines (LUV) was up 2.3%. The airline ETF includes a heavy tilt toward the top four airlines, including 12.2% LUV, 11.7% DAL, 11.5% AAL and 11.3% UAL, along with 3.8% in JBLU. JETS increased 14.3% over the past three months and rose 2.5% year-to-date.
|
8010.0
|
2016-04-14 00:00:00 UTC
|
JetBlue Goes Upscale to Compete With Bigger Rivals
|
AAL
|
https://www.nasdaq.com/articles/jetblue-goes-upscale-compete-bigger-rivals-2016-04-14
|
nan
|
nan
|
In mid-2014, JetBlue Airways launched its Mint premium service on a limited number of flights between New York and Los Angeles. While JetBlue has offered extra-legroom seats on its flights for many years, this was the first time it ventured into offering a "first-class"-like experience.
Mint was a phenomenal success for JetBlue out of the gate. As a result, JetBlue has expanded the scale of its Mint service numerous times in the past two years.
This week, the company announced its boldest move yet. JetBlue will upgrade seven more transcontinental routes to Mint service in 2017 and beyond. This move should help it win over even more business travelers, boosting JetBlue's unit revenue.
A bright spot for JetBlue
JetBlue's Mint service utilizes a dedicated fleet of Airbus A321 aircraft configured with 159 seats. That includes 143 "Core" seats, some of which have extra legroom, and 16 full flat-bed "Mint" premium seats.
The Mint seats have the longest bed length of any domestic business class seat and come with a built-in massage function. Four of the seats actually convert to semi-private suites. Customers receive Birchbox amenity kits upon boarding and are treated to a tapas-style meal that regularly gets rave reviews.
JetBlue's Mint planes feature 16 flat-bed seats in the premium cabin. Image source: JetBlue Airways.
Customer acceptance of Mint has exceeded JetBlue's hopes. It originally thought that the Mint premium seats would cater to wealthy individuals and small businesses . It assumed that big corporations would remain loyal to JetBlue's larger rivals: American Airlines , Delta Air Lines , and United Continental .
However, JetBlue has also gained a foothold among large corporations, at the expense of American, Delta, United, and Virgin America . To satisfy surging demand for the Mint premium seats, JetBlue has had to add flights.
JetBlue's initial plan for Mint was to operate seven daily New York-Los Angeles roundtrips and five daily New York-San Francisco roundtrips. It now operates up to 10 daily roundtrips on the LA route and up to six daily roundtrips to San Francisco. Meanwhile, strong demand from corporate customers has allowed JetBlue to achieve much higher average fares than expected.
Mint expands -- rapidly
JetBlue has gone well beyond adding flights on its two original Mint routes. It now offers Mint flights from New York and Boston to several Caribbean destinations. For the most part, these are Saturday-only flights scheduled to utilize the Mint fleet on a day that has less demand for transcontinental flights.
More significantly, JetBlue is in the midst of expanding its Mint transcontinental service to Boston: its second-largest focus city. One of its three daily Boston-San Francisco roundtrips now operates on a Mint-configured A321. A second daily Mint flight on that route will start next week, and JetBlue will move to all-Mint service for Boston-San Francisco flights in September. JetBlue will then introduce Mint service on the Boston-Los Angeles route beginning in October.
On Tuesday, JetBlue announced even grander plans. During the 2017-2018 period, it plans to inaugurate Mint service on seven more routes: New York-Seattle, Boston-Seattle, New York-San Diego, Boston-San Diego, New York-Las Vegas, Fort Lauderdale-Los Angeles, and Fort Lauderdale-San Francisco.
A bold stand-alone plan
This massive Mint expansion appears to be JetBlue's response to losing out on its bid to acquire Virgin America. JetBlue already competes with Virgin America on all of its transcontinental Mint routes, and it will go head-to-head with either Virgin America or its soon-to-be parent Alaska Air on all of the newly announced Mint routes, except for New York-San Diego.
JetBlue is challenging Virgin America in the premium market. Image source: Virgin America.
In deciding to expand Mint to more routes, JetBlue was probably encouraged by its strong performance with large corporations. Flat-bed seats have become standard in business class on the New York-LA and New York-San Francisco routes. Only Virgin America has recliner-style first-class seats on those routes, albeit very comfortable ones. However, business travelers don't have good options today on other transcontinental routes.
Indeed, American, Delta, United, and Virgin America use the same planes on other transcontinental routes that they use for much shorter flights. Delta and United have shrunk the first-class pitch (the distance between rows) to 37" or less on many domestic aircraft, whereas 40" or more used to be typical. American Airlines offers only slightly more legroom in first class.
Today, Virgin America is by far the leader in terms of first-class seating quality on all of its routes except for New York-LA and New York-San Francisco. Its plush first-class seats offer 55" of pitch. But for redeye flights, business travelers prefer to have a bed -- and Virgin America only serves a handful of routes anyway.
By offering a vastly superior product for business travelers on more routes than ever, JetBlue has an opportunity to make a much bigger dent in the corporate travel market. This could also have a halo effect, getting more business travelers to consider flying JetBlue even on non-Mint routes.
JetBlue has big potential
Buying Virgin America would have given JetBlue a very strong platform for competing with American, Delta, and United. But this week's big Mint expansion announcement shows that JetBlue is confident in its ability to compete even as a smaller player.
JetBlue currently plans to increase its Mint fleet from 11 planes at the end of 2015 to 26 planes by the end of 2017 -- with more growth beyond that. As the expansion of Mint service brings in more and more high-fare business travelers, it should pull JetBlue's unit revenue higher, driving strong earnings growth.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article JetBlue Goes Upscale to Compete With Bigger Rivals originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of JetBlue Airways and United Continental Holdings, and is long January 2017 $17 calls on JetBlue Airways, long January 2017 $40 calls on Delta Air Lines,, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group. The Motley Fool recommends Virgin America. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
It assumed that big corporations would remain loyal to JetBlue's larger rivals: American Airlines , Delta Air Lines , and United Continental . A bold stand-alone plan This massive Mint expansion appears to be JetBlue's response to losing out on its bid to acquire Virgin America. As the expansion of Mint service brings in more and more high-fare business travelers, it should pull JetBlue's unit revenue higher, driving strong earnings growth.
|
It assumed that big corporations would remain loyal to JetBlue's larger rivals: American Airlines , Delta Air Lines , and United Continental . Adam Levine-Weinberg owns shares of JetBlue Airways and United Continental Holdings, and is long January 2017 $17 calls on JetBlue Airways, long January 2017 $40 calls on Delta Air Lines,, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
A second daily Mint flight on that route will start next week, and JetBlue will move to all-Mint service for Boston-San Francisco flights in September. JetBlue already competes with Virgin America on all of its transcontinental Mint routes, and it will go head-to-head with either Virgin America or its soon-to-be parent Alaska Air on all of the newly announced Mint routes, except for New York-San Diego. Adam Levine-Weinberg owns shares of JetBlue Airways and United Continental Holdings, and is long January 2017 $17 calls on JetBlue Airways, long January 2017 $40 calls on Delta Air Lines,, and long January 2017 $30 calls on American Airlines Group.
|
A second daily Mint flight on that route will start next week, and JetBlue will move to all-Mint service for Boston-San Francisco flights in September. Indeed, American, Delta, United, and Virgin America use the same planes on other transcontinental routes that they use for much shorter flights. The Motley Fool recommends Virgin America.
|
8011.0
|
2016-04-13 00:00:00 UTC
|
Southwest Airlines Continues to Outperform Its Larger Rivals
|
AAL
|
https://www.nasdaq.com/articles/southwest-airlines-continues-outperform-its-larger-rivals-2016-04-13
|
nan
|
nan
|
Less than a year ago, Southwest Airlines seemed to be suffering from the same revenue headwinds that were impacting its larger rivals: American Airlines , Delta Air Lines , and United Continental .
However, since the middle of 2015, Southwest has shown a remarkable ability to keep unit revenue roughly stable while profiting from lower fuel prices. Southwest's favorable positioning could help its stock continue to rise, even though it trades at a substantial premium to peers.
Parity quickly unravels
As recently as Q2 2015, all four of the top U.S. airlines were experiencing relatively similar unit revenue trends. During that quarter, Southwest had the smallest decline in passenger revenue per available seat mile (PRASM), at 4.6%. But Delta was not far behind, with PRASM down 4.7%. United and American were also within striking distance, with PRASM down 5.6% and 6.9%, respectively.
Unit revenue has been declining for the past year at most major airlines. Photo: The Motley Fool.
However, Southwest quickly bounced back. Last summer, it signed a new co-branded credit card agreement that is significantly more lucrative than the one it replaced. Southwest has estimated that the annual benefit will be around $500 million .
By Q4, Southwest's total revenue per available seat mile (RASM) -- which includes the incremental credit card revenue -- was down just 0.7% year over year. Delta also had a decline of less than 2% for Q4. However, United Continental's total RASM fell 4.7% year over year for the quarter, while American Airlines' total RASM slumped 5.6%.
The trend continues
Southwest continued to pull away from its competitors during Q1. Last week, the company confirmed that unit revenue for the first quarter will be roughly in line with its performance a year ago.
By contrast, all of the other major airlines are projecting that unit revenue will be near the bottom of the guidance ranges they provided in January. For Delta, that means PRASM declined about 4.5% in Q1. United estimates that PRASM fell 7.25%-7.75%. Finally, American expects to report a 7%-8% PRASM decline for Q1.
Some of this divergence -- about 2.5 percentage points -- still relates to Southwest's new credit card agreement. However, Southwest is also benefiting from its domestic focus. Airlines with large exposure to international routes have faced revenue headwinds from the strong dollar, as well as automatic fuel surcharge reductions in some markets: issues that Southwest has avoided.
Southwest has handily outperformed its rivals on unit revenue since last summer. Photo: The Motley Fool.
Southwest's strong unit revenue performance is particularly impressive because the company has been steadily adding larger planes to its fleet and operating longer flights. Both moves would tend to depress unit revenue.
Unit revenue outperformance keeps margins high
Thanks to Southwest's continuing unit revenue outperformance, analysts expect the company's earnings per share to rise more than 20% in 2016.
Plenty of airlines are likely to post earnings growth in that range this year. What's unique about Southwest's situation is that the company is still locked into relatively high fuel prices. If Brent crude prices average $45/barrel this year -- roughly in line with the current market price -- Southwest expects to pay $1.95-$2.00 per gallon for jet fuel. That would probably be $0.40-$0.50 more than the industry average.
That's because Southwest hedged a lot of its future fuel consumption at higher prices. As of mid-January, the company's 2016 fuel hedges were in the red to the tune of $1 billion.
The good news is that hedging losses will be a lot lower after 2016. For 2017 and 2018 combined, Southwest's unrealized fuel hedging losses were less than $800 million as of mid-January. Furthermore, the company has greater protection than other airlines in case fuel prices move higher again.
This means that Southwest may have more earnings growth potential for 2017 and 2018 than the legacy carriers, especially if fuel prices rise significantly from here. With shares trading for just over 10 times projected 2016 earnings, Southwest Airlines stock remains a relatively safe pick in the turbulent airline industry.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article Southwest Airlines Continues to Outperform Its Larger Rivals originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
However, since the middle of 2015, Southwest has shown a remarkable ability to keep unit revenue roughly stable while profiting from lower fuel prices. Airlines with large exposure to international routes have faced revenue headwinds from the strong dollar, as well as automatic fuel surcharge reductions in some markets: issues that Southwest has avoided. Southwest's strong unit revenue performance is particularly impressive because the company has been steadily adding larger planes to its fleet and operating longer flights.
|
However, United Continental's total RASM fell 4.7% year over year for the quarter, while American Airlines' total RASM slumped 5.6%. Unit revenue outperformance keeps margins high Thanks to Southwest's continuing unit revenue outperformance, analysts expect the company's earnings per share to rise more than 20% in 2016. Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group.
|
Less than a year ago, Southwest Airlines seemed to be suffering from the same revenue headwinds that were impacting its larger rivals: American Airlines , Delta Air Lines , and United Continental . By Q4, Southwest's total revenue per available seat mile (RASM) -- which includes the incremental credit card revenue -- was down just 0.7% year over year. Unit revenue outperformance keeps margins high Thanks to Southwest's continuing unit revenue outperformance, analysts expect the company's earnings per share to rise more than 20% in 2016.
|
Less than a year ago, Southwest Airlines seemed to be suffering from the same revenue headwinds that were impacting its larger rivals: American Airlines , Delta Air Lines , and United Continental . Unit revenue has been declining for the past year at most major airlines. Unit revenue outperformance keeps margins high Thanks to Southwest's continuing unit revenue outperformance, analysts expect the company's earnings per share to rise more than 20% in 2016.
|
8012.0
|
2016-04-13 00:00:00 UTC
|
A Forensic Financial Analysis Of Sabre Corp. And Its Related-Party Acquisition Of Abacus Suggests Cash Flow And EBITDA Overstatement
|
AAL
|
https://www.nasdaq.com/articles/forensic-financial-analysis-sabre-corp-and-its-related-party-acquisition-abacus-suggests
|
nan
|
nan
|
By Ben Axler :
Report Entitled " Sabre Corp : Slicing Estimates "
Spruce Point Capital Management is pleased to announce it has released the contents of a unique short idea involving Sabre Corp (NASDAQ: SABR ), a recycled LBO taken public in 2014 where we see $1200-$1700 per share, or approximately 40% to 60% downside Our presentation is accessible on our website wwwsprucepointcapcom We also encourage all of our readers to sign-up on our website and to follow us on Twitter @Sprucepointcap for exclusive research updates Please review our disclaimer at the end of our research report
I Executive Summary
Introducing Sabre Corp, An Old Investment Story Taken Public in 2014 after its LBO in 2007 Underlying Business Model Pressure Suggest Questionable Value Creation
Sabre Corp is a travel tech company with a core business of operating a Global Distribution System ("GDS"), a platform that facilitates travel by bringing together content such as inventory, prices, and availability from a broad array of travel suppliers for a range of travel buyers such as online/physical travel agents and corporate travel departments Customers include American Airlines (NASDAQ: AAL ), United (NYSE: UAL ), Delta (NYSE: DAL ), and Air Canada ( OTCPK:ACDVF ) As a middleman between buyers and suppliers, Sabre's biggest risk is disintermediation, whereby its consumers bypass its network, through emerging threats from Google (NASDAQ: GOOG ) ( GOOGL ), or even worse, suppliers imposing fees to customers for using it (eg Lufthansa)
To keep customers happy and loyal, Sabre must offer upfront cash incentives because its contracts are typically short term, and upwards of 20% of contracts renew annually Our research suggests that Sabre has been offering increasing incentive discounts, which has forced deflationary pricing as evident in declining revenue per transaction Sabre came public in 2014 after a highly promoted going private LBO in 2007 during the pre-financial crisis buyout mania
Our research suggests that despite significant M&A and restructuring at Sabre while under private ownership, there has been no value creation in its underlying business, which has sorely disappointed expectations By ignoring the headline "Adjusted" EBITDA and EPS results and focusing on underlying cash flow economics, it's evident that Sabre is at best a stagnant business Not surprisingly, Sabre's two private equity sponsors have rapidly exited the stock through 4 secondary issuances, and reduced their ownership from 95% pre-IPO to 25% today!
Management Quietly Starts Liquidating Ahead of the Questionable Related-Party Acquisition of Abacus Int'l
As a result of underlying business pressures, we believe insiders were likely aware that revenue and earnings estimates would not be met in 2015 Management quietly announced on the Q1 2015 conference call in May that they would start liquidating shares under a 10b5-1 program Realizing that Wall Street punishes earnings misses for "growth" stories fiercely, and needing a cover-up to "beat" estimates, in our opinion, Sabre announced the acquisition of Sabre, its Asian GDS affiliate
Sabre already owned 35%, and spun the transaction as a way to access faster growing markets, but there's evidence to suggest the transaction may have allowed the company to spring-load revenue and provide a band aid to an injured business Not surprisingly, by adjusting Sabre's results for the consolidation of Abacus, Sabre's Travel Network segment barely grew in 2015, yet management is still touting mid-to-high single-digit organic growth!
Evidence of Accounting Shenanigans To Inflate Operating Cash Flow and EBITDA:
To support our concerns about the Abacus deal, we sourced its Singapore financial filings and were disappointed to find discrepancies between the figures reported to investors in their SEC filings Even worse, we found irregularities related to Sabre's JV accounting that suggest it artificially inflated its operating cash flow by representing returns of capital as operating cash flows, when accounting rules dictate that dividends in excess of earnings should be treated as returns of capital, and be treated as investment cash flows By pro forma adjusting the results, we find that Sabre's operating cash flows declined in 2015, while management represented that they increased! Aggressive accounting strategies appear to be the norm with Sabre
Our forensic analysis suggests they have become more aggressive in capitalizing upfront customer incentives, which artificially increases earnings and EBITDA Investors are better served adjusting Sabre's financials to remove the effects of capitalization As a result, we find Sabre's EBITDA margin actually declined in 2015, but of course, management would like you to believe they expandedoh the miracles of financial alchemy! Not surprisingly, management's cash bonuses, along with its sponsors' management fees, are solely linked to reported EBITDA This linkage provides clear incentives to game the EBITDA figures
Valuation Disconnect Suggesting 40%-60% Downside :
Smelling a fee bonanza from repeated equity and debt issuances, a grand total of 13 analysts all have "Buy" recommendations and see upside to an average price target of $3342 (+17%) In our opinion, it's easy to refute the bull case from analysts flawed investment assumptions At approximately 34x and 105x 2016E Street sales and Adj EBITDA estimates, respectively, Sabre appears fairly valued to peers (on inflated street numbers) Amadeus ( OTCPK:AMADF ) and Travelport (NYSE: TVPT ) During the heavily touted LBO, venerated investment bankers at Goldman Sachs and Morgan Stanley issued a fairness opinion suggesting a terminal EBITDA multiple range of 65x-80x
Given our belief that post-LBO, no underlying financial improvement has been created, and at worst accounting gimmicks are masking deterioration, we find it baffling how analysts can justify the current valuation Furthermore, analysts fail to adjust their models for Sabre's $387m tax receivable liability that starts coming due in 2017 and has real cash flow implications We also adjust Sabre's financials for the aggressive capitalization of recurring and normal upfront cash incentives As a result, we derive a long-term price target of $1200 - $1700 per share, or 40-60% downside
II Brief Overview of Sabre
Sabre Corp, headquartered in Southlake, TX comprises two segments: Travel Networks and Airline and Hospitality Solutions In 2015, the company reported total revenues of $29bn, Adj EBITDA of $941m, Adj Free Cash Flow of $299m, and Adj EPS of $110/share
Sabre was taken private in 2007 by TPG and Silver Lake at a 30% premium for $3275/share, valuing the deal at approximately $50bn (including the assumption of $550m of net debt) and subsequently IPO'ed in April 2014 at $1600 per share, giving Sabre an enterprise value of $75bn With an 80% appreciation in the shares, Sabre's market cap and enterprise value are $78bn and $113bn, respectively
Travel Networks Segment 2015 Revenues of $2,102m and Adj EBITDA of $877m (71% of total revenue and 73% of total Adj EBITDA 1 ) Global business-to-business travel marketplace and consists primarily of its Global Distribution System ("GDS") and a broad set of solutions that integrate with its GDS to add value for travel suppliers and travel buyers GDS facilitates travel by bringing together travel content such as inventory, prices, and availability from a broad array of travel suppliers, including airlines, hotels, car rental brands, rail carriers, cruise lines and tour operators, with a large network of travel buyers, including online travel agencies ("OTAs"), offline travel agencies, travel management companies ("TMCs") and corporate travel departments
Airline and Hospitality Solutions Segment: 2015 Revenues of $872m and Adj EBITDA of $323m (29% of total revenue and 27% of total Adj EBITDA (1)) Airline and Hospitality Solutions business offers a broad portfolio of software technology products and solutions, through software-as-a-service ("SaaS") and hosted delivery model, to airlines, hotel properties and other travel suppliers Airline and Hospitality Solutions aggregates Sabre's Airline Solutions and Hospitality Solutions operating segments
(1) pre-corporate overhead
Capital and Debt Structure
Sabre IPO'ed at $16/share in April 2014 Its aggressive leverage, reflective of a junk credit status with S&P and Moody's, and its high valuation leave no margin for error in disappointing Wall Street's analysts
Note: We include the $387m book value of the Tax Receivable Agreement liability in our valuation It has near-term cash implications, with payments expected starting 2017
Other liabilities that could affect the valuation include $96m of pension liabilities and $102m representing the present value of operating leases
Sabre has significant debt of $32bn ($36bn inc the TRA) and it has a $381m of available revolving credit as of 12/31/15 which expires in 2018/2019
(click to enlarge)
(click to enlarge)
Key Events Inflating Sabre's Stock Price
Sabre's IPO priced well below the $18-$20 indicated range, but has appreciated +80% on the back of earnings increases, a debt refinancing, and selective M&A deals Our report will focus on the "quality" of Sabre's earnings, especially in relation to the aggressive accounting for Sabre's Abacus deal
(click to enlarge)
III Fundamental Short Thesis and Evidence Suggesting Limited/No Value Creation Post LBO
Summary of Fundamental Concerns
Sabre's core Travel Network (GDS) business is under pressure while its transition to higher margin services is slow to materialize, and coming with substantial capex costs
Furthermore, we believe little/no financial value has been created at Sabre Pre/Post its LBO in 2007
Key Issues
Short-Term Contracts with Significant Renewal Risk : Contracts are typically structured for 1-3 years and a meaningful portion of travel buyer agreements typically representing 15%-20% of bookings are up for renewal in a given year!
Growth Masked By Questionable JV Consolidation : Underlying growth in the Travel Network segment could be closer to zero, yet management is still touting its 6% organic revenue goals, excluding the Abacus consolidation Our forensic analysis suggests substantial issues, and earnings estimates that would not have been met in 2015 absent the Abacus deal
Deflation : Loss of pricing power is evident in Sabre's declining Revenue per Booking Our forensic accounting analysis also suggests that Sabre is having to substantially increase upfront customer incentives, yet minimizes the current impact to its financials through aggressive capitalization
Disintermediation : Airlines look to cut costs from middlemen like Sabre Lufthansa recently imposed a fee to customers for going through a GDS Google's purchase of ITA Software in 2011 is a major competitive threat that could intensify this trend Google's settlement with the Dept of Justice expires in Oct 2016, which could allow it to accelerate its direct to consumer model
Debt : Sabre is saddled with $32bn of debt and another $387m of tax payments ("TRA") which start coming due in 2017 Sabre's credit profile is "aggressive" and is rated Ba3 / B+ by Moody's/S&P, respectively Pro forma for the TRA, we estimate its leverage at 38x, leaving little margin for error
Critical Analysis of Sabre's LBO
The Sabre acquisition, which closed in early 2007, was a relic of the pre-financial crisis leverage mania that started to unravel in 2008
The deal followed the sale of Travelport from Cendant to Blackstone for $43 billion in cash, which closed in August 2006
The deal valued Travelport at approximately 76x LTM EBITDA and was levered 63x Total Debt / LTM EBITDA TPG and Silver Lake's acquisition of Sabre pushed the bar even higher! According to the fairness opinion , the deal was the richest and most highly levered of all precedent transactions
Sabre was acquired at approximately 102x trailing EBITDA with 78x Debt / EBITDA
Valuation and Leverage Predicated on High Expectations:
Greg Mondre, a Managing Director of Silver Lake Partners, said:
Key Sabre Management All Left :
Sabre CEO Sam Gilliland mysteriously ousted ahead of the IPO in 2014
Sabre Treasurer/Chief Accounting Officer/CFO Jeff Jackson leaves for Thayer Ventures
Sabre Controller, later promoted to CFO, Mark Miller, replaced by Rick Simonson in 2013
According to TPG Partner Karl Peterson:
Based on our analysis and opinion :
Jan 2015 : Sabre dumps Travelocity/Lastminutecom as its popularity dwindles, financial performance deteriorates
Adjusted Non-GAAP EBITDA/EPS, it appears that limited/no value has been created at Sabre
Analyst Hype and Failed LBO Expectations
Sell-side analyst comments on Sabre have proven to be overly optimistic shocker!
Morgan Stanley Analyst : In a research note published before the agreement was announced, the analyst suggested that Sabre's would-be buyers might be able to afford an even higher price " Under private equity ownershipaggressive cost-cutting could yield higher margins and lower [capital expenditures], and in that case a $34 [per share] value could be possible " - Source
Spruce Point Reality Check : A higher offer never emerged Under private equity ownership, cost cuts have not stemmed the surge in capex, making cash flow unchanged
Bear Stearns Analyst : " While this transaction was widely anticipated,we think Sabre remains attractive to financial and/or strategic buyers given the highly visible cash flows from the global travel distribution business and the potential growth that the online travel agency (Travelocity) can offer " - Source
Spruce Point Reality Check: Only 1 strategic buyer expressed interest in Sabre Travelocity was a bust and was sold, and Sabre appears to be using accounting tricks to mask declining free cash flow
Rochdale Securities Analyst : " They (Sabre) have strong cash flow and good business fundamentals " - Source
Spruce Point Reality Check: What may have been true in the past, may not be true in the present!
Limited Strategic Interest in Sabre
The short case is supported in knowing there was limited strategic interest in acquiring Sabre during the prior strategic alternative process Given our belief that Sabre's growth remains at risk of further deterioration, and that accounting gimmickry appears to be used to embellish its result, we think strategic buyer interest will continue to remain unlikely
Background of MergerSabre Proxy :
The board considered Company Z's proposal and draft merger agreement and discussed with our management and advisors a potential combination with Company Z at our board meeting on October 13, 2006 The discussion included a consideration of the relative risks and merits of a combination with Company Z as compared to a possible take-private transaction that would not present any potentially significant regulatory or other non-consummation risk or delayAfter a period during which our senior management and advisors discussed with Company Z the potential issues that would be presented in a combination transaction, our board instructed our management to cease discussions with Company Z and inform Company Z that the board was focused on avoiding substantial non-consummation risk for the CompanyOur management informed Company Z of this decision
Evidence of Disintermediation: Lufthansa Imposes Fees on GDS Use
In June 2015, Lufthansa, took the decisive step to penalize customers with higher fees for booking tickets indirectly through GDS providers Lufthansa was noted as a major customer of Sabre What is stopping other airlines from following Lufthansa's lead - such as Air France-KLM - also reportedly evaluating a similar surcharge pricing strategy?
According to Sabre'sS-1 IPO Filing : " Our largest Travel Network suppliers include American Airlines, Delta, US Airways, United, Air Canada,Lufthansa, Air France, British Airways and Emirates "
LufthansaRedirects Commercial Strategy:
Major Downside Catalyst Forthcoming: Google Threat Rises in October 2016
In July 2010, Google announced its acquisition of ITA Software for $700m Google said the acquisition of ITA, which organizes data such as flight times, ticket availability and prices, will enable it to create online search tools to help people find such information more easily on the Web The deal spooked industry participants, who formed a group and released a video in an attempt to warn about the dangers of Google entering the business In April 2011, the Dept of Justice cleared the transaction , but imposed conditions limiting how Google could use the technology
After the Justice Department's consent decreeexpires in October 2016, Google will be able to do what it pleases with ITA, and that makes people likeinternet travel expertsEd Hasbrouck nervous
Sabre mentions direct to consumer risk in its10-K, page 42:
Sabre's Results Failing Initial Expectations
Sabre's Management outlined long-term projections for its business from 2007-2012 in its proxy statement prior to its take private transaction which closed March 20, 2007 Since then, Sabre has made numerous divestitures and some acquisitions , although many acquisitions have been immaterial to results We attempted to reconcile actual 2012 revenues vs projections by adjusting the reported results for acquisitions and divestitures Our back of the envelope estimate suggests that Sabre's 2012 results sorely disappointed expectations and could be evidence of erosion of its core business
(click to enlarge)
Questionable LBO Value Creation
Both Sabre and its analysts would love investors to focus on its growing Adjusted EPS and EBITDA However, the sad reality is that despite years of financial engineering, restructuring, and transitioning to more SAAS solutions, Sabre's free cash flow and margins remain largely unchanged from Pre-LBO levels This has very important implications for Sabre's valuation, which we discuss later in the valuation section
(click to enlarge)
As a technology company, it's disappointing that Sabre has not found a way to leverage technology to make its business more efficient
As indicated in the charts below, the company has not been able to increase the efficiency of its business as measured by Revenue per Employee and Adj Cash Flow per Employee We believe this supports our view that a valuation expansion for Sabre is not warranted
(click to enlarge)
EBITDA is inherently susceptible to accounting distortions Instead, we evaluate its business by comparing its operating cash flow to average assets and employees vs Travelport and Amadeus
We find that Sabre has the worst capital efficiency in the industry
(click to enlarge)
Strong Evidence of Deflation and a Cracking Business Model
Management does not steer investors towards evaluating revenue per transaction, but we've unraveled the mystery for investors; the picture is not pretty!
(click to enlarge)
Is Sabre a Buy While Insiders Jump Ship and the Company Dilutes?
Since its IPO in April 2014, the three largest beneficial owners of Sabre have conducted 4 secondary issuances, and dropped their combined beneficial ownership from 95% (pre-IPO) to 25% as of March 2nd, 2016 While insiders have been selling, the Company has quietly been diluting shareholders Basic shares outstanding have risen by 17m or 65% since the IPO
(click to enlarge)
IV Accounting, Financial and Governance Concerns
It's important to evaluate the incentive structure that motivates management and insiders Accordingly, we observe that Sabre's management variable incentive comp is entirely linked to Adjusted EBITDA Furthermore, its shareholders also extract management fees tied to Adjusted EBITDA Therefore, we believe investors should carefully scrutinize the quality of Sabre's EBITDA to make sure management and insiders are not inflating this metric to extract unjust compensation
Corporate Performance Measure
Management Services Agreement
Source: Sabre Proxy Statement
Abacus Deal in 2015 Deserves Major Scrutiny
Sabre announced its acquisition of 65% of Abacus in May 2015 This related party transaction deserves significant scrutiny because Sabre previously controlled 35% of Abacus before acquiring the remaining ownership and consolidating results!
Quick Background on Abacus International
Singapore-based Asian Pacific GDS operator
Owned by a consortium of 11 Asian airlines alongside Sabre
Abacus serves more than 100,000 travel agents across the Asia-Pacific region's 59 markets and has both global and uniquely local relationships with airlines and hotels, including the a portfolio of low-cost content and Chinese airline content
600 employees
Quick Overview of Transaction Terms
Paid $411 million in net cash for the 65% it didn't own and guided to $50m of incremental EBITDA for 2016
Implies total valuation of $632m enterprise value or 8x 2016E EBITDA Sabre projected funding with $250m of cash and $160m of incremental net debt
Pro forma Net Debt/LTM Adj EBITDA leverage would increase to 30x from 33x
The acquisition includes new long-term distribution agreements between Sabre and the 11 airline owners of Abacus
Sabre projected $10m of annual cost synergies by 2017
Originally projected to close on Aug 1st, the deal closed July 1st
Source: Company press release and presentation
Critical Review of Abacus Deal: Industry View vs Analyst and Management Promotion
Sabre's Management:
Warning:Robert Bailey left Abacus a few months later to be CEO at Linkswood Group according to hisLinkedInProfile
Wall Street Analysts' Views:
Morgan Stanley:"Abacus now gives Sabre control over an entity with substantial presence in the largest, fastest growth travel market in the world"
Goldman Sachs: "Still, we view the announcement positively as it removes uncertainty and helps simplify the passenger booking numbers as well as the income statement"
Deutsche Bank:" We would expect Sabre to accelerate Abacus growth from 7% in 2014 to high single/low double digit growth through share gains"
Industry Insider View:
Asset shuffling? On February 24, 2012, Sabre completed the sale of its 51% stake in Sabre Pacific, which had been jointly owned, to Abacus for $46m million of proceeds Now, the company will re-inherit Sabre Pacific, through its Abacus buyout!
Sabre is doubling down on its traditional, low-margin, air GDS business:Runs counter to the [IPO] narrative of growth led by the hospitality services division
Abacus has lost significant Asia Pacific market share to rivals:For a decade, Abacus has been losing market share to rivals Amadeus and Travelport in a steady loss of a point a year
In 2002, Abacus/Sabre had 57% market share of GDS bookings in Asia Pacific, counted as one-way segment volume, on average
Today, that figure is much lower, in the mid-30s percentage-wise, said sourcesHigher Incentives to come? Sabre has lost share because it has been slower to hike fees it charges its partner airlines Amadeus/Travelport receive higher fees from suppliers allowing them to pay higher incentive fees to travel agency subscribers Sabre might be willing to match competitors' higher level of incentives to travel agents, speculates one former executive
Sources:Tnooz, "Sabre is Ready to spend $500m, and Abacus is likely target" - Jan 27, 2015Tnooz, "Sabre confirms $411 million Abacus takeover"- May 14, 2015
Warning: Management Quietly Starts Dumping Shares Ahead of Abacus Deal
Sabre's management started a 10b5-1 insider stock sale program in early May 5, 2015 less than ten days before the Abacus transaction was announced on May 14, 2015 It is also noteworthy that management did not put this disclosure in writing within its earnings press release , its 10-Q filing or by 8-K filing Instead, management made the selective disclosure during its conference call While not a technical disclosure violation, best practices may have merited expanded disclosure
Q1 2015 Conference Call
Spruce Point Note: Certain members of Sabre management joined in the past few years The statement suggests that the entire management team waited seven years to sell
While exact details of the 10b5-1 program have not been disclosed to investors, we analyzed recent sales through Form 4 filings
As of the latest proxy statement filed 2/28/15, all executive officers and directors owned 62m shares or 23% of total shares outstanding
Form 4 filings indicate that a range of executives and directors have sold including the CEO/CFO and EVP of Sabre Travel Network
We estimate total insider sales of 23m shares at $2715/sh average price, reaping $644m in proceeds
Viewed in context of insider holdings pre-10b5-1, insiders have sold 37% of their holdings
Warning: Low Quality Earnings Guidance Post Abacus Deal Announcement
Spruce Point has consistently warned its readers about the perils of investing in companies that have characteristics of diverging earnings and cash flow Little more than two months after issuing updated guidance for the Abacus acquisition, Sabre increased guidance during its Q2'2015 earnings results In Sabre's case, its "Adjusted" EBITDA and EPS started diverging from free cash flow after it "raised guidance" post the acquisition of Abacus
Sabre increased sales guidance by 21%, Adj EBITDA by 28%, and Adjusted EPS range by 47%-50%, yet high-end Adjusted Free Cash Flow fell by 33% from $300m+ to $290m+
The increase was specifically called out to be related to the Travel Network by the CFO on theconfcall:
(click to enlarge)
Source: Abacus Presentation, May 14, 2015 and Q2 2015 Earnings Presentation, Aug 4, 2015
Warning: Low Quality Earnings, Or Worse, Evidence of Spring-Loading Revenues?
This accounting maneuver came under scrutiny during the Tyco scandal and has been studied by academics at Yale According to the Abacus deal investor presentation , Sabre estimated that 2015 revenue would increase by $120m (assuming 8/1/15 closing) as a result of the Abacus acquisition consolidation However, the deal actually closed a month earlier on 7/1/15 In its Q3'15 10-Q (p 7) and later in its FY 2015 10-K filing (p 78), Sabre made the following disclosures:
(1) Note: When asked on the Q3'15 earnings conferencecall , the CFO said the impact of the Abacus acquisition was approximately $70-75m for the quarter, significantly less than disclosed in the 10-Q which was filed with the SEC on the same day
Warning:Something Does Not Add Up!
How is it possible that Q4 revenues declined to $91m ($187m-$96m), yet income surged $12m ($13m-$1m) or 1,200% Sabre guided to $10m of total synergies by 2017 Did it somehow exceed its target in just 1 quarter?
By closing one month early, Sabre added $67m of incremental revenue in 2015 above the $120m estimate ($187m-$120m)
Recall that the $120m initial revenue estimate assuming an 8/1/15 closing would result in 5 months of revenue consolidation or approximately $24m of sales per month Therefore, we would have expected approximately $144m ($120m+$24m) of full year 2015 Abacus revenue from the addition of the extra month
Warning: Questionable Earnings "Beat" in 2015
Given our concerns raised on the previous slide about the Abacus transaction and numbers not making sense, it's worth questioning the quality of the earnings "beats" in subsequent quarters
So how did Q3 financial results play out for Sabre? The company reported revenue of $785m and $029c of Adj EPS and beat Wall St estimates by just 1 cent and revenue estimates by just $117m!
Source:Associated Press
Also in Q4, Sabre yet again beat Wall St earnings estimates by 1 cent, but disappointed on the revenue line by posting $7585m vs $7621m estimates
Source:Associated Press
The Ugly Reality of Sabre's Core Business
By adjusting Sabre's financials to remove the impact of Abacus, we find that its revenue growth rate declined significantly during 2015, well below management's guidance range of 4%-6%
Note management's quote:
Source: Q2'2015 Conf Call - Aug 5, 2015
Q3 2015:10-Q filingpost 7/1/15 close (page 7)
FY 2015:10-K filing(page 78)
(click to enlarge)
Management Still Touting Travel Network Growth Excluding Abacus in 2016…
Sabre's management is still touting 6% growth in the Travel Network segment well into 2016 despite strong evidence to suggest they fell well short of this goal in 2015! CFO on FY 2015Conference Call, Feb 9, 2016
And also the CFO at the Goldman Sachs Tech and Internet Conf,Feb 10 2016
Feb 8, 2016
More Evidence of Abacus Int'l Accounting Issues
We sourced the financial statements of Abacus International Pte Ltd, the filings of the acquired business Source: SingaporeRegistry
There are some clear discrepancies between figures reported to investors in Sabre's SEC filings
Our major concerns are that revenues booked by Sabre are substantially higher than related party purchases noted by Abacus
Furthermore, receivables from Abacus as noted by Sabre are higher than payables noted by Abacus
(click to enlarge)
(click to enlarge)
(click to enlarge)
More Evidence of Joint Venture Accounting Concerns
Sabre recognizes its proportionate share of earnings from joint ventures under the "Equity Method" which means it recognizes non-cash earnings through the income statement, and deducts it from the cash flow statement However, actual cash dividends received are accounted for as an increase in operating cash flow Take careful notice that in 2015, dividends exceeded the actual earnings from joint ventures
(click to enlarge)
Operating Cash Flow Appears Overstated, Actually Declined in 2015
Because Sabre received more dividends than income in 2015, accounting rules dictate that excess cash must be accounted for as a "Return of Capital" and not a " Return on Capital" (1) As a result, we are justified in reclassifying $139m of cash from operations, to cash flow from investing On a pro-forma basis, Sabre's Adjusted Free Cash Flow appears to have declined in 2015 by 26%!
(click to enlarge)
Source: Sabre SEC Filings
(1) ASC 230-10-45-12 as noted in E&Y's Statement of Cash Flows guide, June 2015
(2) Represents dividends in excess of income, which should be reclassified as an investing cash flow, not from operations
Evidence of Aggressive Upfront Incentive Capitalization
While capitalization of upfront cash incentives is not outright disallowed under GAAP, Spruce Point believes it is an aggressive accounting choice to capitalize normal and recurring operating expenses
This accounting choice increases current period earnings by stretching out expenses over future periods Our analysis will illustrate that Sabre appears to be making more aggressive use of this capitalization strategy
By our calculation, upfront capitalized incentives surged from $537m to $635m in 2015, an 18% increase We believe investors would be better served by evaluating its business by deducting upfront cash incentives
(click to enlarge)
Sabre warns of upfront incentives it must offer, but does not focus attention on quantifying the impact for investors:
Isn't it ironic that prior to finalizing its take-private LBO in 2007, Sabre led investors to believe that incentive costs would fall!
Pre-LBO Sabre capitalized and amortized expenses over a short period of generally 3 years:
Post-LBO Sabre capitalizes incentives and amortizes them 3-5 years to earnings, allowing it to stretch out and reduce expenses
(1) Sabre's 2015 10-K , page 6 and page 38
(2) Sabre 2007 10-K , Trends in Cost Reduction, page 33 and Summary of Significant Accounting Policies, page 77
Upfront Customer Incentives Rising Fast as a % of Travel Network Revenues
Customer Incentives Payments Not Reconciling
Sabre reports beginning and ending account balances within "Other Assets," and non-cash amortization of upfront customer incentives
By mathematical deduction, we can calculate the annual capitalized incentive amount
There's a slight discrepancy in 2014 of $26m in 2014
Incentives Payments Growing as % of Travel Network Revenue
Comparing reported capitalized amounts to Travel Network revenue, we find it growing rapidly as a % of revenue
Aggressively capitalization policies are worthy of close scrutiny
(click to enlarge)
Ratio of Upfront Cash Incentive Capitalization to Amortization Rose Sharply in 2015
(click to enlarge)
CEO Appears to Dodge the Question of Pricing on the Abacus Call:
Also Worth Investigating Questionable Accounting for Deferred Customer Advances
Sabre says that "Deferred Customer Advances and Discounts are amortized are amortized in future periods as the related revenue is earned"
If this is true, our forensic analysis fails to identify these amortization amounts, but it appears they are rapidly growing as a % of revenue
(click to enlarge)
V Valuation and Sell-Side Disconnect
Wall St Analysts Hyper Bullish on Sabre, a Unanimous Buy Recommendation!
Sabre Corp has a large roster of analysts saying unanimously "BUY!" On average analysts see upside to $3342 per share or approximately 17% above the current trading price
Note: based on $2850 stock price
Easy to Refute the Bull Case on Sabre Corp: Analysts' Investment Highlights vs Spruce Point's Rebuttal
Rebuttal: There is nothing defensive about Sabre's business Its Travel Network business (>70% of revenues and EBITDA) is not a guaranteed recurring revenue source with long sticky contracts, but rather tied to the cyclicality of the airline and travel business Our research suggest its core business is not growing at the mid single digit rate management suggests, but in fact is at best stagnant
Rebuttal: Yes, inflecting downward! Our forensic analysis suggests that Sabre included JV dividends in excess of JV income to bolster 2015 operating cash flow By reclassifying the excess dividend as an investment cash flow, we find that Sabre's Adjusted Free Cash Flow declined in 2015!
Rebuttal: This analyst doesn't appear to have looked carefully! In our opinion, Sabre closed the Abacus deal a month early and may have spring-loaded revenues to account for its Q2'15 earnings beat Furthermore, by removing the effect of the Abacus deal, Sabre would have all but certainly missed its 2015 targets
Rebuttal: Sounds like wishful thinking What good are barriers when deflation is causing decreasing revenue per transaction and customer incentives are rising? Furthermore, barriers cannot stop the disintermediation away from GDS that is occurring as evidenced by the Lufthansa news and Google's entry in to the business
Rebuttal: In our opinion, Sabre's multiple should re-rate lower not higher! There's no evidence that under private ownership, and since coming public again in 2014, that Sabre's has improved its overall cash flow or capital efficiency The fairness opinion from the LBO suggested a terminal EBITDA multiple of 65x -80x We believe this is the appropriate valuation range given Sabre's fundamental challenges and low earnings quality
Rebuttal:How many times have investors been pitched "blue sky international opportunities" C'mon sell-side analysts, come up with an original selling point please! Sabre operates in a globally competitive business It would be overly optimistic to assume Sabre can easily penetrate any mature market and achieve substantially higher pricing
What's the Right EBITDA Multiple for Sabre?
Sabre's LBO multiple in 2007 at 102x was a function of a leverage bubble that ultimately burst Precedent transactions (including its recent Abacus deal), and its own fairness opinion , suggest a long-term "terminal multiple" in the 65x-80x range Given evidence of core deterioration in its business being masked by accounting shenanigans, Sabre should not get a multiple expansion
"Goldman Sachsselected exit multiples ranging from 55x to 75xin order to calculate the terminal value based upon factors including precedent transaction analyses and the Company's forward EBITDA Multiple prior to announcement"
" Morgan Stanleyselected exit multiples ranging from 70x to 80x last twelve months EBITDA in order to calculate the terminal valueby applying this multiple to Sabre Holdings' estimated fiscal year 2011 EBITDA The exit multiples of 70x to 80x were based upon analyses of transaction multiples of selected precedent transactions"
"Bear Stearnsused LTM EBITDA exit multiples of 70x to 80x for the Multi-Year Outlook cases and 65x to 75x for the Extended Outlook cases In estimating the terminal value exit multiples, Bear Stearns considered Sabre Holdings' current and recent trading multiples,adjusted downward to reflect declining future growth in EBITDA as projected by Sabre Holdings' relative to current EBITDA growth rates"
(click to enlarge)
Analysts Again Fail to Include Hefty Tax Receivable Agreement in the Valuation
As noted in our previous research on Planet Fitness (NYSE: PLNT ), we believe tax receivable agreements ("TRA") are widely misunderstood and often ignored by analysts and investors for their impact on cash flow and valuation We suggest reading the NY Times article " Private Equity Squeezing Out Cash Long After the IPO " Sabre has a "TRA" with imminent cash flow implications for 2017 and problematic accounting implications
According to Sabre's10-K :
Warning : We believe this would be an incorrect financial classification of TRA payments In reality, the payments should be classified as operating cash flows! There are numerous examples of companies correctly accounting for payments as deductions of operating cash flows, and ultimately free cash flow including PBF Energy , Change Healthcare , Premier, Inc , and Berry Plastics
Warning : Expected payments are rapidly approaching Analysts largely fail to account for these payments as a reduction to operating and free cash flow
Valuation Inflated on Abnormally High EPS Growth Expectations
On the surface, Sabre's valuation appears in line with peers Travelport and Amadeus However, by adjusting its enterprise value for the tax receivable agreement liability and its EBITDA for the aggressive capitalization of upfront incentives, Sabre's valuation is rich Sabre's high YoY EPS growth is a function of the partial year 2015 Abacus consolidation, is supporting the valuation
(click to enlarge)
Realistic Price Target Implies 40%-60% Downside
Sabre's valuation needs to be re-rated to reflect its terminal multiple indicated by the exact same analysts that conducted its fairness opinion in 2007
Sabre has not demonstrated any meaningful underlying business improvements resulting in cash flow enhancement
Meanwhile, there is evidence that Sabre is having to offer greater upfront cash incentivizes to maintain relationships, while the risks that Sabre is disintermediated by the likes of Google and others increases
Furthermore, Sabre should trade at a discount to peers due to the evidence we presented which suggests aggressive accounting and potential irregularities
(click to enlarge)
Thanks again for your interest in our investment ideas
About Spruce Point Capital Management
Spruce Point Capital Management, LLC is a New York based investment manager founded in 2009 The firm focuses on short-selling, special situations, and value investment opportunities The firm conducts in depth forensic fundamental research and takes an activist approach to investing Our research challenges conventional thinking with deep fundamental analysis, analytical rigor, and conclusions rooted with our unique viewpoints For more information visit us at our website to sign-up follow us on Twitter @Sprucepointcap
Disclaimer
This research presentation report expresses our research opinions, which we have based upon interpretation of certain facts and observations, all of which are based upon publicly available information, and all of which are set out in this research presentation report Any investment involves substantial risks, including complete loss of capital Any forecasts or estimates are for illustrative purpose only and should not be taken as limitations of the maximum possible loss or gain Any information contained in this report may include forward looking statements, expectations, pro forma analyses, estimates, and projections You should assume these types of statements, expectations, pro forma analyses, estimates, and projections may turn out to be incorrect for reasons beyond Spruce Point Capital Management LLC's control This is not investment or accounting advice nor should it be construed as such Use of Spruce Point Capital Management LLC's research is at your own risk You should do your own research and due diligence before making any investment decision with respect to securities covered herein All figures assumed to be in US Dollars, unless specified otherwise
You should assume that as of the publication date of any presentation, report or letter, Spruce Point Capital Management LLC (possibly along with or through our members, partners, affiliates, employees, and/or consultants) along with our subscribers and clients has a short position in all stocks (and/or are long puts/short call options of the stock) covered herein, including without limitation Sabre Corporation ("SABR"), and therefore stand to realize significant gains in the event that the price of its stock declines Following publication of any presentation, report or letter, we intend to continue transacting in the securities covered therein, and we may be long, short, or neutral at any time hereafter regardless of our initial recommendation
This is not an offer to sell or a solicitation of an offer to buy any security, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction Spruce Point Capital Management LLC is not registered as an investment advisor, broker/dealer, or accounting firm
To the best of our ability and belief, as of the date hereof, all information contained herein is accurate and reliable and does not omit to state material facts necessary to make the statements herein not misleading, and all information has been obtained from public sources we believe to be accurate and reliable, and who are not insiders or connected persons of the stock covered herein or who may otherwise owe any fiduciary duty or duty of confidentiality to the issuer, or to any other person or entity that was breached by the transmission of information to Spruce Point Capital Management LLC However, Spruce Point Capital Management LLC recognizes that there may be non-public information in the possession of Sabre Corporation or other insiders of Sabre Corporation that has not been publicly disclosed by Sabre Corporation Therefore, such information contained herein is presented "as is," without warranty of any kind - whether express or implied Spruce Point Capital Management LLC makes no other representations, express or implied, as to the accuracy, timeliness, or completeness of any such information or with regard to the results to be obtained from its use All rights reserved This document may not be reproduced or disseminated in whole or in part without the prior written consent of Spruce Point Capital Management LLC
See also Sports Direct: The Good, The Bad And The 30% Upside on seekingalphacom
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.
|
By Ben Axler : Report Entitled " Sabre Corp : Slicing Estimates " Spruce Point Capital Management is pleased to announce it has released the contents of a unique short idea involving Sabre Corp (NASDAQ: SABR ), a recycled LBO taken public in 2014 where we see $1200-$1700 per share, or approximately 40% to 60% downside Our presentation is accessible on our website wwwsprucepointcapcom We also encourage all of our readers to sign-up on our website and to follow us on Twitter @Sprucepointcap for exclusive research updates Please review our disclaimer at the end of our research report I Executive Summary Introducing Sabre Corp, An Old Investment Story Taken Public in 2014 after its LBO in 2007 Underlying Business Model Pressure Suggest Questionable Value Creation Sabre Corp is a travel tech company with a core business of operating a Global Distribution System ("GDS"), a platform that facilitates travel by bringing together content such as inventory, prices, and availability from a broad array of travel suppliers for a range of travel buyers such as online/physical travel agents and corporate travel departments Customers include American Airlines (NASDAQ: AAL ), United (NYSE: UAL ), Delta (NYSE: DAL ), and Air Canada ( OTCPK:ACDVF ) As a middleman between buyers and suppliers, Sabre's biggest risk is disintermediation, whereby its consumers bypass its network, through emerging threats from Google (NASDAQ: GOOG ) ( GOOGL ), or even worse, suppliers imposing fees to customers for using it (eg Lufthansa) To keep customers happy and loyal, Sabre must offer upfront cash incentives because its contracts are typically short term, and upwards of 20% of contracts renew annually Our research suggests that Sabre has been offering increasing incentive discounts, which has forced deflationary pricing as evident in declining revenue per transaction Sabre came public in 2014 after a highly promoted going private LBO in 2007 during the pre-financial crisis buyout mania Our research suggests that despite significant M&A and restructuring at Sabre while under private ownership, there has been no value creation in its underlying business, which has sorely disappointed expectations By ignoring the headline "Adjusted" EBITDA and EPS results and focusing on underlying cash flow economics, it's evident that Sabre is at best a stagnant business Not surprisingly, Sabre's two private equity sponsors have rapidly exited the stock through 4 secondary issuances, and reduced their ownership from 95% pre-IPO to 25% today! Not surprisingly, management's cash bonuses, along with its sponsors' management fees, are solely linked to reported EBITDA This linkage provides clear incentives to game the EBITDA figures Valuation Disconnect Suggesting 40%-60% Downside : Smelling a fee bonanza from repeated equity and debt issuances, a grand total of 13 analysts all have "Buy" recommendations and see upside to an average price target of $3342 (+17%) In our opinion, it's easy to refute the bull case from analysts flawed investment assumptions At approximately 34x and 105x 2016E Street sales and Adj EBITDA estimates, respectively, Sabre appears fairly valued to peers (on inflated street numbers) Amadeus ( OTCPK:AMADF ) and Travelport (NYSE: TVPT ) During the heavily touted LBO, venerated investment bankers at Goldman Sachs and Morgan Stanley issued a fairness opinion suggesting a terminal EBITDA multiple range of 65x-80x Given our belief that post-LBO, no underlying financial improvement has been created, and at worst accounting gimmicks are masking deterioration, we find it baffling how analysts can justify the current valuation Furthermore, analysts fail to adjust their models for Sabre's $387m tax receivable liability that starts coming due in 2017 and has real cash flow implications We also adjust Sabre's financials for the aggressive capitalization of recurring and normal upfront cash incentives As a result, we derive a long-term price target of $1200 - $1700 per share, or 40-60% downside II Brief Overview of Sabre Sabre Corp, headquartered in Southlake, TX comprises two segments: Travel Networks and Airline and Hospitality Solutions In 2015, the company reported total revenues of $29bn, Adj EBITDA of $941m, Adj Free Cash Flow of $299m, and Adj EPS of $110/share Sabre was taken private in 2007 by TPG and Silver Lake at a 30% premium for $3275/share, valuing the deal at approximately $50bn (including the assumption of $550m of net debt) and subsequently IPO'ed in April 2014 at $1600 per share, giving Sabre an enterprise value of $75bn With an 80% appreciation in the shares, Sabre's market cap and enterprise value are $78bn and $113bn, respectively Travel Networks Segment 2015 Revenues of $2,102m and Adj EBITDA of $877m (71% of total revenue and 73% of total Adj EBITDA 1 ) Global business-to-business travel marketplace and consists primarily of its Global Distribution System ("GDS") and a broad set of solutions that integrate with its GDS to add value for travel suppliers and travel buyers GDS facilitates travel by bringing together travel content such as inventory, prices, and availability from a broad array of travel suppliers, including airlines, hotels, car rental brands, rail carriers, cruise lines and tour operators, with a large network of travel buyers, including online travel agencies ("OTAs"), offline travel agencies, travel management companies ("TMCs") and corporate travel departments Airline and Hospitality Solutions Segment: 2015 Revenues of $872m and Adj EBITDA of $323m (29% of total revenue and 27% of total Adj EBITDA (1)) Airline and Hospitality Solutions business offers a broad portfolio of software technology products and solutions, through software-as-a-service ("SaaS") and hosted delivery model, to airlines, hotel properties and other travel suppliers Airline and Hospitality Solutions aggregates Sabre's Airline Solutions and Hospitality Solutions operating segments (1) pre-corporate overhead Capital and Debt Structure Sabre IPO'ed at $16/share in April 2014 Its aggressive leverage, reflective of a junk credit status with S&P and Moody's, and its high valuation leave no margin for error in disappointing Wall Street's analysts Note: We include the $387m book value of the Tax Receivable Agreement liability in our valuation It has near-term cash implications, with payments expected starting 2017 Other liabilities that could affect the valuation include $96m of pension liabilities and $102m representing the present value of operating leases Sabre has significant debt of $32bn ($36bn inc the TRA) and it has a $381m of available revolving credit as of 12/31/15 which expires in 2018/2019 (click to enlarge) (click to enlarge) Key Events Inflating Sabre's Stock Price Sabre's IPO priced well below the $18-$20 indicated range, but has appreciated +80% on the back of earnings increases, a debt refinancing, and selective M&A deals Our report will focus on the "quality" of Sabre's earnings, especially in relation to the aggressive accounting for Sabre's Abacus deal (click to enlarge) III Fundamental Short Thesis and Evidence Suggesting Limited/No Value Creation Post LBO Summary of Fundamental Concerns Sabre's core Travel Network (GDS) business is under pressure while its transition to higher margin services is slow to materialize, and coming with substantial capex costs Furthermore, we believe little/no financial value has been created at Sabre Pre/Post its LBO in 2007 Key Issues Short-Term Contracts with Significant Renewal Risk : Contracts are typically structured for 1-3 years and a meaningful portion of travel buyer agreements typically representing 15%-20% of bookings are up for renewal in a given year! Furthermore, barriers cannot stop the disintermediation away from GDS that is occurring as evidenced by the Lufthansa news and Google's entry in to the business Rebuttal: In our opinion, Sabre's multiple should re-rate lower not higher!
|
By Ben Axler : Report Entitled " Sabre Corp : Slicing Estimates " Spruce Point Capital Management is pleased to announce it has released the contents of a unique short idea involving Sabre Corp (NASDAQ: SABR ), a recycled LBO taken public in 2014 where we see $1200-$1700 per share, or approximately 40% to 60% downside Our presentation is accessible on our website wwwsprucepointcapcom We also encourage all of our readers to sign-up on our website and to follow us on Twitter @Sprucepointcap for exclusive research updates Please review our disclaimer at the end of our research report I Executive Summary Introducing Sabre Corp, An Old Investment Story Taken Public in 2014 after its LBO in 2007 Underlying Business Model Pressure Suggest Questionable Value Creation Sabre Corp is a travel tech company with a core business of operating a Global Distribution System ("GDS"), a platform that facilitates travel by bringing together content such as inventory, prices, and availability from a broad array of travel suppliers for a range of travel buyers such as online/physical travel agents and corporate travel departments Customers include American Airlines (NASDAQ: AAL ), United (NYSE: UAL ), Delta (NYSE: DAL ), and Air Canada ( OTCPK:ACDVF ) As a middleman between buyers and suppliers, Sabre's biggest risk is disintermediation, whereby its consumers bypass its network, through emerging threats from Google (NASDAQ: GOOG ) ( GOOGL ), or even worse, suppliers imposing fees to customers for using it (eg Lufthansa) To keep customers happy and loyal, Sabre must offer upfront cash incentives because its contracts are typically short term, and upwards of 20% of contracts renew annually Our research suggests that Sabre has been offering increasing incentive discounts, which has forced deflationary pricing as evident in declining revenue per transaction Sabre came public in 2014 after a highly promoted going private LBO in 2007 during the pre-financial crisis buyout mania Our research suggests that despite significant M&A and restructuring at Sabre while under private ownership, there has been no value creation in its underlying business, which has sorely disappointed expectations By ignoring the headline "Adjusted" EBITDA and EPS results and focusing on underlying cash flow economics, it's evident that Sabre is at best a stagnant business Not surprisingly, Sabre's two private equity sponsors have rapidly exited the stock through 4 secondary issuances, and reduced their ownership from 95% pre-IPO to 25% today! Quick Background on Abacus International Singapore-based Asian Pacific GDS operator Owned by a consortium of 11 Asian airlines alongside Sabre Abacus serves more than 100,000 travel agents across the Asia-Pacific region's 59 markets and has both global and uniquely local relationships with airlines and hotels, including the a portfolio of low-cost content and Chinese airline content 600 employees Quick Overview of Transaction Terms Paid $411 million in net cash for the 65% it didn't own and guided to $50m of incremental EBITDA for 2016 Implies total valuation of $632m enterprise value or 8x 2016E EBITDA Sabre projected funding with $250m of cash and $160m of incremental net debt Pro forma Net Debt/LTM Adj EBITDA leverage would increase to 30x from 33x The acquisition includes new long-term distribution agreements between Sabre and the 11 airline owners of Abacus Sabre projected $10m of annual cost synergies by 2017 Originally projected to close on Aug 1st, the deal closed July 1st Source: Company press release and presentation Critical Review of Abacus Deal: Industry View vs Analyst and Management Promotion Sabre's Management: Warning:Robert Bailey left Abacus a few months later to be CEO at Linkswood Group according to hisLinkedInProfile Wall Street Analysts' Views: Morgan Stanley:"Abacus now gives Sabre control over an entity with substantial presence in the largest, fastest growth travel market in the world" Goldman Sachs: "Still, we view the announcement positively as it removes uncertainty and helps simplify the passenger booking numbers as well as the income statement" Deutsche Bank:" We would expect Sabre to accelerate Abacus growth from 7% in 2014 to high single/low double digit growth through share gains" Industry Insider View: Asset shuffling? Pre-LBO Sabre capitalized and amortized expenses over a short period of generally 3 years: Post-LBO Sabre capitalizes incentives and amortizes them 3-5 years to earnings, allowing it to stretch out and reduce expenses (1) Sabre's 2015 10-K , page 6 and page 38 (2) Sabre 2007 10-K , Trends in Cost Reduction, page 33 and Summary of Significant Accounting Policies, page 77 Upfront Customer Incentives Rising Fast as a % of Travel Network Revenues Customer Incentives Payments Not Reconciling Sabre reports beginning and ending account balances within "Other Assets," and non-cash amortization of upfront customer incentives By mathematical deduction, we can calculate the annual capitalized incentive amount There's a slight discrepancy in 2014 of $26m in 2014 Incentives Payments Growing as % of Travel Network Revenue Comparing reported capitalized amounts to Travel Network revenue, we find it growing rapidly as a % of revenue Aggressively capitalization policies are worthy of close scrutiny (click to enlarge) Ratio of Upfront Cash Incentive Capitalization to Amortization Rose Sharply in 2015 (click to enlarge) CEO Appears to Dodge the Question of Pricing on the Abacus Call: Also Worth Investigating Questionable Accounting for Deferred Customer Advances Sabre says that "Deferred Customer Advances and Discounts are amortized are amortized in future periods as the related revenue is earned" If this is true, our forensic analysis fails to identify these amortization amounts, but it appears they are rapidly growing as a % of revenue (click to enlarge) V Valuation and Sell-Side Disconnect Wall St Analysts Hyper Bullish on Sabre, a Unanimous Buy Recommendation!
|
By Ben Axler : Report Entitled " Sabre Corp : Slicing Estimates " Spruce Point Capital Management is pleased to announce it has released the contents of a unique short idea involving Sabre Corp (NASDAQ: SABR ), a recycled LBO taken public in 2014 where we see $1200-$1700 per share, or approximately 40% to 60% downside Our presentation is accessible on our website wwwsprucepointcapcom We also encourage all of our readers to sign-up on our website and to follow us on Twitter @Sprucepointcap for exclusive research updates Please review our disclaimer at the end of our research report I Executive Summary Introducing Sabre Corp, An Old Investment Story Taken Public in 2014 after its LBO in 2007 Underlying Business Model Pressure Suggest Questionable Value Creation Sabre Corp is a travel tech company with a core business of operating a Global Distribution System ("GDS"), a platform that facilitates travel by bringing together content such as inventory, prices, and availability from a broad array of travel suppliers for a range of travel buyers such as online/physical travel agents and corporate travel departments Customers include American Airlines (NASDAQ: AAL ), United (NYSE: UAL ), Delta (NYSE: DAL ), and Air Canada ( OTCPK:ACDVF ) As a middleman between buyers and suppliers, Sabre's biggest risk is disintermediation, whereby its consumers bypass its network, through emerging threats from Google (NASDAQ: GOOG ) ( GOOGL ), or even worse, suppliers imposing fees to customers for using it (eg Lufthansa) To keep customers happy and loyal, Sabre must offer upfront cash incentives because its contracts are typically short term, and upwards of 20% of contracts renew annually Our research suggests that Sabre has been offering increasing incentive discounts, which has forced deflationary pricing as evident in declining revenue per transaction Sabre came public in 2014 after a highly promoted going private LBO in 2007 during the pre-financial crisis buyout mania Our research suggests that despite significant M&A and restructuring at Sabre while under private ownership, there has been no value creation in its underlying business, which has sorely disappointed expectations By ignoring the headline "Adjusted" EBITDA and EPS results and focusing on underlying cash flow economics, it's evident that Sabre is at best a stagnant business Not surprisingly, Sabre's two private equity sponsors have rapidly exited the stock through 4 secondary issuances, and reduced their ownership from 95% pre-IPO to 25% today! Not surprisingly, management's cash bonuses, along with its sponsors' management fees, are solely linked to reported EBITDA This linkage provides clear incentives to game the EBITDA figures Valuation Disconnect Suggesting 40%-60% Downside : Smelling a fee bonanza from repeated equity and debt issuances, a grand total of 13 analysts all have "Buy" recommendations and see upside to an average price target of $3342 (+17%) In our opinion, it's easy to refute the bull case from analysts flawed investment assumptions At approximately 34x and 105x 2016E Street sales and Adj EBITDA estimates, respectively, Sabre appears fairly valued to peers (on inflated street numbers) Amadeus ( OTCPK:AMADF ) and Travelport (NYSE: TVPT ) During the heavily touted LBO, venerated investment bankers at Goldman Sachs and Morgan Stanley issued a fairness opinion suggesting a terminal EBITDA multiple range of 65x-80x Given our belief that post-LBO, no underlying financial improvement has been created, and at worst accounting gimmicks are masking deterioration, we find it baffling how analysts can justify the current valuation Furthermore, analysts fail to adjust their models for Sabre's $387m tax receivable liability that starts coming due in 2017 and has real cash flow implications We also adjust Sabre's financials for the aggressive capitalization of recurring and normal upfront cash incentives As a result, we derive a long-term price target of $1200 - $1700 per share, or 40-60% downside II Brief Overview of Sabre Sabre Corp, headquartered in Southlake, TX comprises two segments: Travel Networks and Airline and Hospitality Solutions In 2015, the company reported total revenues of $29bn, Adj EBITDA of $941m, Adj Free Cash Flow of $299m, and Adj EPS of $110/share Sabre was taken private in 2007 by TPG and Silver Lake at a 30% premium for $3275/share, valuing the deal at approximately $50bn (including the assumption of $550m of net debt) and subsequently IPO'ed in April 2014 at $1600 per share, giving Sabre an enterprise value of $75bn With an 80% appreciation in the shares, Sabre's market cap and enterprise value are $78bn and $113bn, respectively Travel Networks Segment 2015 Revenues of $2,102m and Adj EBITDA of $877m (71% of total revenue and 73% of total Adj EBITDA 1 ) Global business-to-business travel marketplace and consists primarily of its Global Distribution System ("GDS") and a broad set of solutions that integrate with its GDS to add value for travel suppliers and travel buyers GDS facilitates travel by bringing together travel content such as inventory, prices, and availability from a broad array of travel suppliers, including airlines, hotels, car rental brands, rail carriers, cruise lines and tour operators, with a large network of travel buyers, including online travel agencies ("OTAs"), offline travel agencies, travel management companies ("TMCs") and corporate travel departments Airline and Hospitality Solutions Segment: 2015 Revenues of $872m and Adj EBITDA of $323m (29% of total revenue and 27% of total Adj EBITDA (1)) Airline and Hospitality Solutions business offers a broad portfolio of software technology products and solutions, through software-as-a-service ("SaaS") and hosted delivery model, to airlines, hotel properties and other travel suppliers Airline and Hospitality Solutions aggregates Sabre's Airline Solutions and Hospitality Solutions operating segments (1) pre-corporate overhead Capital and Debt Structure Sabre IPO'ed at $16/share in April 2014 Its aggressive leverage, reflective of a junk credit status with S&P and Moody's, and its high valuation leave no margin for error in disappointing Wall Street's analysts Note: We include the $387m book value of the Tax Receivable Agreement liability in our valuation It has near-term cash implications, with payments expected starting 2017 Other liabilities that could affect the valuation include $96m of pension liabilities and $102m representing the present value of operating leases Sabre has significant debt of $32bn ($36bn inc the TRA) and it has a $381m of available revolving credit as of 12/31/15 which expires in 2018/2019 (click to enlarge) (click to enlarge) Key Events Inflating Sabre's Stock Price Sabre's IPO priced well below the $18-$20 indicated range, but has appreciated +80% on the back of earnings increases, a debt refinancing, and selective M&A deals Our report will focus on the "quality" of Sabre's earnings, especially in relation to the aggressive accounting for Sabre's Abacus deal (click to enlarge) III Fundamental Short Thesis and Evidence Suggesting Limited/No Value Creation Post LBO Summary of Fundamental Concerns Sabre's core Travel Network (GDS) business is under pressure while its transition to higher margin services is slow to materialize, and coming with substantial capex costs Furthermore, we believe little/no financial value has been created at Sabre Pre/Post its LBO in 2007 Key Issues Short-Term Contracts with Significant Renewal Risk : Contracts are typically structured for 1-3 years and a meaningful portion of travel buyer agreements typically representing 15%-20% of bookings are up for renewal in a given year! Sabre has lost share because it has been slower to hike fees it charges its partner airlines Amadeus/Travelport receive higher fees from suppliers allowing them to pay higher incentive fees to travel agency subscribers Sabre might be willing to match competitors' higher level of incentives to travel agents, speculates one former executive Sources:Tnooz, "Sabre is Ready to spend $500m, and Abacus is likely target" - Jan 27, 2015Tnooz, "Sabre confirms $411 million Abacus takeover"- May 14, 2015 Warning: Management Quietly Starts Dumping Shares Ahead of Abacus Deal Sabre's management started a 10b5-1 insider stock sale program in early May 5, 2015 less than ten days before the Abacus transaction was announced on May 14, 2015 It is also noteworthy that management did not put this disclosure in writing within its earnings press release , its 10-Q filing or by 8-K filing Instead, management made the selective disclosure during its conference call While not a technical disclosure violation, best practices may have merited expanded disclosure Q1 2015 Conference Call Spruce Point Note: Certain members of Sabre management joined in the past few years The statement suggests that the entire management team waited seven years to sell While exact details of the 10b5-1 program have not been disclosed to investors, we analyzed recent sales through Form 4 filings As of the latest proxy statement filed 2/28/15, all executive officers and directors owned 62m shares or 23% of total shares outstanding Form 4 filings indicate that a range of executives and directors have sold including the CEO/CFO and EVP of Sabre Travel Network We estimate total insider sales of 23m shares at $2715/sh average price, reaping $644m in proceeds Viewed in context of insider holdings pre-10b5-1, insiders have sold 37% of their holdings Warning: Low Quality Earnings Guidance Post Abacus Deal Announcement Spruce Point has consistently warned its readers about the perils of investing in companies that have characteristics of diverging earnings and cash flow Little more than two months after issuing updated guidance for the Abacus acquisition, Sabre increased guidance during its Q2'2015 earnings results In Sabre's case, its "Adjusted" EBITDA and EPS started diverging from free cash flow after it "raised guidance" post the acquisition of Abacus Sabre increased sales guidance by 21%, Adj EBITDA by 28%, and Adjusted EPS range by 47%-50%, yet high-end Adjusted Free Cash Flow fell by 33% from $300m+ to $290m+ The increase was specifically called out to be related to the Travel Network by the CFO on theconfcall: (click to enlarge) Source: Abacus Presentation, May 14, 2015 and Q2 2015 Earnings Presentation, Aug 4, 2015 Warning: Low Quality Earnings, Or Worse, Evidence of Spring-Loading Revenues?
|
By Ben Axler : Report Entitled " Sabre Corp : Slicing Estimates " Spruce Point Capital Management is pleased to announce it has released the contents of a unique short idea involving Sabre Corp (NASDAQ: SABR ), a recycled LBO taken public in 2014 where we see $1200-$1700 per share, or approximately 40% to 60% downside Our presentation is accessible on our website wwwsprucepointcapcom We also encourage all of our readers to sign-up on our website and to follow us on Twitter @Sprucepointcap for exclusive research updates Please review our disclaimer at the end of our research report I Executive Summary Introducing Sabre Corp, An Old Investment Story Taken Public in 2014 after its LBO in 2007 Underlying Business Model Pressure Suggest Questionable Value Creation Sabre Corp is a travel tech company with a core business of operating a Global Distribution System ("GDS"), a platform that facilitates travel by bringing together content such as inventory, prices, and availability from a broad array of travel suppliers for a range of travel buyers such as online/physical travel agents and corporate travel departments Customers include American Airlines (NASDAQ: AAL ), United (NYSE: UAL ), Delta (NYSE: DAL ), and Air Canada ( OTCPK:ACDVF ) As a middleman between buyers and suppliers, Sabre's biggest risk is disintermediation, whereby its consumers bypass its network, through emerging threats from Google (NASDAQ: GOOG ) ( GOOGL ), or even worse, suppliers imposing fees to customers for using it (eg Lufthansa) To keep customers happy and loyal, Sabre must offer upfront cash incentives because its contracts are typically short term, and upwards of 20% of contracts renew annually Our research suggests that Sabre has been offering increasing incentive discounts, which has forced deflationary pricing as evident in declining revenue per transaction Sabre came public in 2014 after a highly promoted going private LBO in 2007 during the pre-financial crisis buyout mania Our research suggests that despite significant M&A and restructuring at Sabre while under private ownership, there has been no value creation in its underlying business, which has sorely disappointed expectations By ignoring the headline "Adjusted" EBITDA and EPS results and focusing on underlying cash flow economics, it's evident that Sabre is at best a stagnant business Not surprisingly, Sabre's two private equity sponsors have rapidly exited the stock through 4 secondary issuances, and reduced their ownership from 95% pre-IPO to 25% today! Not surprisingly, management's cash bonuses, along with its sponsors' management fees, are solely linked to reported EBITDA This linkage provides clear incentives to game the EBITDA figures Valuation Disconnect Suggesting 40%-60% Downside : Smelling a fee bonanza from repeated equity and debt issuances, a grand total of 13 analysts all have "Buy" recommendations and see upside to an average price target of $3342 (+17%) In our opinion, it's easy to refute the bull case from analysts flawed investment assumptions At approximately 34x and 105x 2016E Street sales and Adj EBITDA estimates, respectively, Sabre appears fairly valued to peers (on inflated street numbers) Amadeus ( OTCPK:AMADF ) and Travelport (NYSE: TVPT ) During the heavily touted LBO, venerated investment bankers at Goldman Sachs and Morgan Stanley issued a fairness opinion suggesting a terminal EBITDA multiple range of 65x-80x Given our belief that post-LBO, no underlying financial improvement has been created, and at worst accounting gimmicks are masking deterioration, we find it baffling how analysts can justify the current valuation Furthermore, analysts fail to adjust their models for Sabre's $387m tax receivable liability that starts coming due in 2017 and has real cash flow implications We also adjust Sabre's financials for the aggressive capitalization of recurring and normal upfront cash incentives As a result, we derive a long-term price target of $1200 - $1700 per share, or 40-60% downside II Brief Overview of Sabre Sabre Corp, headquartered in Southlake, TX comprises two segments: Travel Networks and Airline and Hospitality Solutions In 2015, the company reported total revenues of $29bn, Adj EBITDA of $941m, Adj Free Cash Flow of $299m, and Adj EPS of $110/share Sabre was taken private in 2007 by TPG and Silver Lake at a 30% premium for $3275/share, valuing the deal at approximately $50bn (including the assumption of $550m of net debt) and subsequently IPO'ed in April 2014 at $1600 per share, giving Sabre an enterprise value of $75bn With an 80% appreciation in the shares, Sabre's market cap and enterprise value are $78bn and $113bn, respectively Travel Networks Segment 2015 Revenues of $2,102m and Adj EBITDA of $877m (71% of total revenue and 73% of total Adj EBITDA 1 ) Global business-to-business travel marketplace and consists primarily of its Global Distribution System ("GDS") and a broad set of solutions that integrate with its GDS to add value for travel suppliers and travel buyers GDS facilitates travel by bringing together travel content such as inventory, prices, and availability from a broad array of travel suppliers, including airlines, hotels, car rental brands, rail carriers, cruise lines and tour operators, with a large network of travel buyers, including online travel agencies ("OTAs"), offline travel agencies, travel management companies ("TMCs") and corporate travel departments Airline and Hospitality Solutions Segment: 2015 Revenues of $872m and Adj EBITDA of $323m (29% of total revenue and 27% of total Adj EBITDA (1)) Airline and Hospitality Solutions business offers a broad portfolio of software technology products and solutions, through software-as-a-service ("SaaS") and hosted delivery model, to airlines, hotel properties and other travel suppliers Airline and Hospitality Solutions aggregates Sabre's Airline Solutions and Hospitality Solutions operating segments (1) pre-corporate overhead Capital and Debt Structure Sabre IPO'ed at $16/share in April 2014 Its aggressive leverage, reflective of a junk credit status with S&P and Moody's, and its high valuation leave no margin for error in disappointing Wall Street's analysts Note: We include the $387m book value of the Tax Receivable Agreement liability in our valuation It has near-term cash implications, with payments expected starting 2017 Other liabilities that could affect the valuation include $96m of pension liabilities and $102m representing the present value of operating leases Sabre has significant debt of $32bn ($36bn inc the TRA) and it has a $381m of available revolving credit as of 12/31/15 which expires in 2018/2019 (click to enlarge) (click to enlarge) Key Events Inflating Sabre's Stock Price Sabre's IPO priced well below the $18-$20 indicated range, but has appreciated +80% on the back of earnings increases, a debt refinancing, and selective M&A deals Our report will focus on the "quality" of Sabre's earnings, especially in relation to the aggressive accounting for Sabre's Abacus deal (click to enlarge) III Fundamental Short Thesis and Evidence Suggesting Limited/No Value Creation Post LBO Summary of Fundamental Concerns Sabre's core Travel Network (GDS) business is under pressure while its transition to higher margin services is slow to materialize, and coming with substantial capex costs Furthermore, we believe little/no financial value has been created at Sabre Pre/Post its LBO in 2007 Key Issues Short-Term Contracts with Significant Renewal Risk : Contracts are typically structured for 1-3 years and a meaningful portion of travel buyer agreements typically representing 15%-20% of bookings are up for renewal in a given year! Growth Masked By Questionable JV Consolidation : Underlying growth in the Travel Network segment could be closer to zero, yet management is still touting its 6% organic revenue goals, excluding the Abacus consolidation Our forensic analysis suggests substantial issues, and earnings estimates that would not have been met in 2015 absent the Abacus deal Deflation : Loss of pricing power is evident in Sabre's declining Revenue per Booking Our forensic accounting analysis also suggests that Sabre is having to substantially increase upfront customer incentives, yet minimizes the current impact to its financials through aggressive capitalization Disintermediation : Airlines look to cut costs from middlemen like Sabre Lufthansa recently imposed a fee to customers for going through a GDS Google's purchase of ITA Software in 2011 is a major competitive threat that could intensify this trend Google's settlement with the Dept of Justice expires in Oct 2016, which could allow it to accelerate its direct to consumer model Debt : Sabre is saddled with $32bn of debt and another $387m of tax payments ("TRA") which start coming due in 2017 Sabre's credit profile is "aggressive" and is rated Ba3 / B+ by Moody's/S&P, respectively Pro forma for the TRA, we estimate its leverage at 38x, leaving little margin for error Critical Analysis of Sabre's LBO The Sabre acquisition, which closed in early 2007, was a relic of the pre-financial crisis leverage mania that started to unravel in 2008 The deal followed the sale of Travelport from Cendant to Blackstone for $43 billion in cash, which closed in August 2006 The deal valued Travelport at approximately 76x LTM EBITDA and was levered 63x Total Debt / LTM EBITDA TPG and Silver Lake's acquisition of Sabre pushed the bar even higher!
|
8013.0
|
2016-04-13 00:00:00 UTC
|
Ellie Mae, American Airlines, JPMorgan Chase, MB Financial and Fidelity Southern highlighted as Zacks Bull and Bear of the Day
|
AAL
|
https://www.nasdaq.com/articles/ellie-mae-american-airlines-jpmorgan-chase-mb-financial-and-fidelity-southern-highlighted
|
nan
|
nan
|
For Immediate Release
Chicago, IL - April 13, 2016 - Zacks Equity Research highlights Ellie Mae ( ELLI ) as the Bull of the Day and American Airlines ( AAL ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on JPMorgan Chase & Co. ( JPM ), MB Financial Inc. ( MBFI ) and Fidelity Southern Corporation ( LION ).
Here is a synopsis of all five stocks:
Bull of the Day :
Ellie Mae ( ELLI ) beat the Zacks Consensus Estimate about three months ago earnings are right around the corner. The stock is a Zacks Rank #1 (Strong Buy) and today it is the Bull of the Day.
The Numbers
ELLI beat the Zacks Consensus Estimate of $0.00 by $0.23 for a huge positive earnings surprise. Revenues came in a little above expectations at $65 million for a 5.7% positive revenue surprise.
Description
Ellie Mae operates electronic mortgage origination networks in the United States. The Company's network and technology-enabled solutions help streamline and automate the mortgage origination process. Ellie Mae is headquartered in Pleasanton, California.
Earnings History
The recent earnings history for ELLI is rather solid with six of the last six reports topping the Zacks Consensus Estimate.
Estimates
The FY16 Zacks Consensus Estimate has been moving higher. The number stood at $0.53 in September of last year. The number moved higher to $0.70 in October and on the strength of the most recent beat the estimate kicked higher to $0.95 in February.
The FY2017 Zacks Consensus Estimate is only recently out, and it has held steady at $1.22 over the last two months.
Bear of the Day :
American Airlines ( AAL ) has beaten the Zacks Consensus Estimate rather consistently but the estimates have slipped and it is now a Zacks Rank #5 (Strong Sell) and today it is the Bear of the Day.
The Numbers
AAL topped the Zacks Consensus Estimate of $1.96 by $0.04 for a 2% positive earnings surprise. Revenues came in a little below expectations at $9.63B for a 1% negative revenue surprise.
Description
American Airlines Group operates in the airline industry. The company provides scheduled passenger, freight and mail service. American Airlines Group is based in Fort Worth TX.
Earnings History
Usually when a stock is the Bear of the Day, the earnings history is filled with misses. This is not the case for AAL, as the stock has posted six straight beats.
Estimates
Here is the real reason the stock is a Zacks Rank #5 (Strong Sell) and the Bear of the Day. The Zacks Consensus Estimate has fallen in each of the last two months. The FY16 estimate stood at $6.96 in January but fell to $6.76 in February and is now down to $6.21 in April.
Next year is seeing an even larger move to the downside, with numbers sliding from $6.29 to $6.22 down to $6.00 over the same time period as mentioned above. That is the reason this stock is a Zacks Rank #5 (Strong Sell).
Additional content:
Why Q1 Earnings May Be Ill-Fated for JPMorgan (JPM)
A huge respite from legal costs, effective cost cutting and increased revenues had helped JPMorgan Chase & Co. ( JPM ) to churn out juicy fourth-quarter results - beating the Zacks Consensus Estimate on both the top and the bottom lines - despite tough market conditions. But that failed to translate into any strength for its stock, as evident from its year-to-date plunge of over 11%.
In the absence of any known catalyst that can turn the tables, the stock might not have any better luck after the company releases first-quarter results on Apr 13. In fact, if the results disappoint, the stock could lose further value.
However, an earnings beat doesn't look very difficult for JPMorgan, as the Zacks Consensus Estimate is pretty conservative at $1.26 after a number of downward revisions over the last couple of months.
Our quantitative model doesn't point to an earnings beat though. Here's why:
JPMorgan doesn't have the right combination of the two key ingredients - positive Earnings ESP and a Zacks Rank #3 (Hold) or better - for increasing the odds of an earnings surprise.
Zacks ESP: The Earnings ESP for JPMorgan is +2.38%, but it alone isn't enough to enhance the chance of an earnings beat.
Zacks Rank: JPMorgan carries a Zacks Rank #5 (Strong Sell), which makes our earnings prediction difficult. Also, we caution against Sell-rated stocks going into an earnings announcement, especially if the company has seen negative estimate revisions.
The lackluster performance by the JPMorgan stock so far this year can be attributed to the uncertainty over the Fed's rate hike schedule, concerns related to banks' exposure to the distressed energy sector and the expected ill effects of the low rate environment on the finance industry. We believe the chance of first-quarter results validating the concerns is high. The industry-wide disruption across the key operating segments can dampen JPMorgan's overall performance in the quarter.
Likely Factors at Play
The anticipated adverse impact of plunging oil prices , a weakening global economy and low interest rates resulted in low client activity and volatility in the financial markets. As a result, JPMorgan has already hinted at dismal trading activities (particularly fixed-income and equity trading) in the first quarter, which is typically a strong quarter for the industry.
Further, the continued shift toward electronic platforms may have weighed on the investment banking performance of JPMorgan.
Moreover, JPMorgan's revenues from advisory and underwriting may have been dampened by the persistent decline in M&A activities and a weakening IPO market in the wake of the global rout.
At its Investor Day conference, JPMorgan's corporate and investment bank chief Daniel Pinto said that that the company's first-quarter investment banking revenues are expected to be down 25% year over year. He also revealed a 20% decline in markets revenues due to a tough comparison with the year-ago period.
The mortgage business is not expected see any improvement either. People might have rushed to get homes financed to avoid higher rates later, but that did not help the bank's business anyway. Low margin on fresh mortgages due to low rates made the mortgage business miserable. Further, repayment and charge-off of mortgage loans at a rate faster than fresh originations might have led to a declining trend in outstanding mortgage loans.
JPMorgan continued with its efforts to keep expenses at check. The company had outflows related to legal settlements, but there was nothing as such to impact its earnings unusually. The company has agreed to settle two of its biggest cases - one related to Lehman Brothers and the other pertaining to Insurer Ambac - for about $2.5 billion. However, it doesn't expect any of the settlements to materially affect its earnings.
Stocks That Warrant a Look
Here are a few bank stocks that you may want to consider, as our model shows that these have the right combination for an earnings beat this time around:
With an Earnings ESP of +1.96% and a Zacks Rank #3, MB Financial Inc. ( MBFI ) is expected to report on Apr 18.
Fidelity Southern Corporation ( LION ) has an Earnings ESP of +2.86% and carries a Zacks Rank #2 (Buy). It is scheduled to report results on Apr 21.
Get today's Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
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 analyst 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.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Click here to subscribe to this free newsletter today .
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
ELLIE MAE INC (ELLI): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
MB FINANCL INC (MBFI): Free Stock Analysis Report
FIDELITY SOUTHN (LION): 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.
|
For Immediate Release Chicago, IL - April 13, 2016 - Zacks Equity Research highlights Ellie Mae ( ELLI ) as the Bull of the Day and American Airlines ( AAL ) as the Bear of the Day. Bear of the Day : American Airlines ( AAL ) has beaten the Zacks Consensus Estimate rather consistently but the estimates have slipped and it is now a Zacks Rank #5 (Strong Sell) and today it is the Bear of the Day. The Numbers AAL topped the Zacks Consensus Estimate of $1.96 by $0.04 for a 2% positive earnings surprise.
|
For Immediate Release Chicago, IL - April 13, 2016 - Zacks Equity Research highlights Ellie Mae ( ELLI ) as the Bull of the Day and American Airlines ( AAL ) as the Bear of the Day. Click to get this free report ELLIE MAE INC (ELLI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report JPMORGAN CHASE (JPM): Free Stock Analysis Report MB FINANCL INC (MBFI): Free Stock Analysis Report FIDELITY SOUTHN (LION): Free Stock Analysis Report To read this article on Zacks.com click here. Bear of the Day : American Airlines ( AAL ) has beaten the Zacks Consensus Estimate rather consistently but the estimates have slipped and it is now a Zacks Rank #5 (Strong Sell) and today it is the Bear of the Day.
|
Click to get this free report ELLIE MAE INC (ELLI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report JPMORGAN CHASE (JPM): Free Stock Analysis Report MB FINANCL INC (MBFI): Free Stock Analysis Report FIDELITY SOUTHN (LION): Free Stock Analysis Report To read this article on Zacks.com click here. For Immediate Release Chicago, IL - April 13, 2016 - Zacks Equity Research highlights Ellie Mae ( ELLI ) as the Bull of the Day and American Airlines ( AAL ) as the Bear of the Day. Bear of the Day : American Airlines ( AAL ) has beaten the Zacks Consensus Estimate rather consistently but the estimates have slipped and it is now a Zacks Rank #5 (Strong Sell) and today it is the Bear of the Day.
|
For Immediate Release Chicago, IL - April 13, 2016 - Zacks Equity Research highlights Ellie Mae ( ELLI ) as the Bull of the Day and American Airlines ( AAL ) as the Bear of the Day. Bear of the Day : American Airlines ( AAL ) has beaten the Zacks Consensus Estimate rather consistently but the estimates have slipped and it is now a Zacks Rank #5 (Strong Sell) and today it is the Bear of the Day. The Numbers AAL topped the Zacks Consensus Estimate of $1.96 by $0.04 for a 2% positive earnings surprise.
|
8014.0
|
2016-04-12 00:00:00 UTC
|
American Airlines March Traffic Up, Q1 PRASM View Soft
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-march-traffic-up-q1-prasm-view-soft-2016-04-12
|
nan
|
nan
|
Premier passenger carrier American Airlines Group Inc.AAL posted strong air traffic in the month of March. Traffic - measured in revenue passenger miles (RPMs) - stood at 19 billion, up 3.3% from 18.4 billion recorded last March.
On a year-over-year basis, consolidated capacity (available seat miles/ASMs) increased 3.8% to 23.26 billion. However, the load factor or percentage of seats filled by passengers decreased to 81.7% from 82.1% in Mar 2015.
In the first three months of 2016, American Airlines generated RPMs of 51.77 billion (up 3.2% from the corresponding period last year) and ASMs of 65.06 billion (up 3.6% year over year). Meanwhile, the load factor declined 30 basis points year over year to 79.6%. Moreover, total passenger count in March as well as in the first three months of 2016 increased 1% and 1.6% year over year, respectively.
We believe that the company's route expansion plans, introduction of ancillary products and customer service enhancement bode well for the future. Further, the company has been reaping considerable benefits from its joint ventures and code share agreements.
Meanwhile, American Airlines forecasts a 7% to 8% drop in PRASM (passenger revenue per available seat mile) for the second quarter of 2015. We believe that the decline may have been brought about by foreign currency exchange rate risks.
Zacks Rank & Stocks to Consider
American Airlines currently carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks in the same space include Deutsche Lufthansa Aktiengesellschaft DLAKY , China Eastern Airlines Corp. Ltd. CEA and GOL Linhas Aereas Inteligentes S.A. GOL . Both Deutsche Lufthansa and China Eastern sport a Zacks Rank #1 (Strong Buy) while GOL Linhas carries a Zacks Rank #2 (Buy).
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 >>
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-ADR (GOL): Free Stock Analysis Report
CHINA EASTN-ADR (CEA): Free Stock Analysis Report
LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report
AMER AIRLINES (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.
|
Premier passenger carrier American Airlines Group Inc.AAL posted strong air traffic in the month of March. Click to get this free report GOL LINHAS-ADR (GOL): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. We believe that the company's route expansion plans, introduction of ancillary products and customer service enhancement bode well for the future.
|
Click to get this free report GOL LINHAS-ADR (GOL): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Premier passenger carrier American Airlines Group Inc.AAL posted strong air traffic in the month of March. Better-ranked stocks in the same space include Deutsche Lufthansa Aktiengesellschaft DLAKY , China Eastern Airlines Corp. Ltd. CEA and GOL Linhas Aereas Inteligentes S.A. GOL .
|
Click to get this free report GOL LINHAS-ADR (GOL): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Premier passenger carrier American Airlines Group Inc.AAL posted strong air traffic in the month of March. In the first three months of 2016, American Airlines generated RPMs of 51.77 billion (up 3.2% from the corresponding period last year) and ASMs of 65.06 billion (up 3.6% year over year).
|
Premier passenger carrier American Airlines Group Inc.AAL posted strong air traffic in the month of March. Click to get this free report GOL LINHAS-ADR (GOL): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Meanwhile, the load factor declined 30 basis points year over year to 79.6%.
|
8015.0
|
2016-04-12 00:00:00 UTC
|
American Airlines and United Continental Binge on Buybacks
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-and-united-continental-binge-buybacks-2016-04-12
|
nan
|
nan
|
Most airline stocks had a very up-and-down start to 2016. American Airlines and United Continental were no exception. Shares of both legacy carriers logged double-digit declines in the first six weeks of the year, recovered into positive territory by late March, and have since started to slip back again.
American Airlines vs. United Continental Stock Performance, data by YCharts
Not surprisingly, executives at American and United took advantage of this extreme volatility by cranking up their share-repurchase programs to stunning levels.
American Airlines continues its liberal buybacks
In 2015, American Airlines spent a massive $3.58 billion on share buybacks. The biggest chunk came in Q3, when the company spent $1.56 billion to repurchase more than 37 million shares. For the full year, American repurchased 85.1 million shares, representing more than 12% of its share count.
American's management quickly signaled even bigger plans for 2016. CFO Derek Kerr stated on the Q4earnings callthat American Airlines would target a minimum liquidity level of $6.5 billion, implying that it ended 2015 with more than $2 billion of excess cash. Furthermore, the company plans to borrow enough money in 2016 to fully finance its aircraft purchases.
The net result is that based on its stated financial targets, American should have the capacity to repurchase more than $5 billion of stock this year. It got off to a quick start last quarter, spending $1.6 billion to repurchase 39.3 million shares.
American Airlines bought back $1.6 billion of stock in Q1. Image source: American Airlines.
Remarkably, American Airlines has nearly exhausted the $6 billion in share repurchases the company's board authorized during 2015. The company remains on track to buy back about $5 billion of stock this year, so it's likely to announce another substantial buyback program in conjunction with its Q1 earnings report later this month.
United Continental starts its own buyback binge
Unlike American Airlines, United Continental didn't spend an unusually large amount of money on buybacks last year. The company repurchased $1.2 billion of stock for the full year. That was a little more than 5% of the company's year-end 2015 market cap.
However, the pace of buybacks accelerated after new CEO Oscar Munoz took the helm last September. In January, interim CFO Gerry Laderman said that United planned to spend about $750 million on share repurchases during Q1. A month later, the company disclosed that it now planned to buy back $1.5 billion of stock in Q1 and complete its $3 billion share-repurchase program during 2016.
Last week, United confirmed that it had followed through by buying $1.5 billion of stock during the quarter. That leaves it with a little less than $1 billion remaining on its current buyback program. In all likelihood, it, too, will announce a new share repurchase authorization soon.
Share count reductions offset revenue weakness
American Airlines and United Continental are both estimating that passenger unit revenue slumped 7%-8% last quarter. United still expects to post modest pre-tax margin expansion for Q1 because of its big fuel cost savings.
United Continental's pre-tax margin expanded slightly in Q1. Image source: The Motley Fool.
By contrast, American -- which had a bigger fuel benefit last year -- will have an adjusted pre-tax margin roughly in line with its Q1 2015 result of 12.7%. That means it could potentially suffer a modest decline in pre-tax income. Year-over-year earnings comparisons will get tougher as the year progresses for both companies, as fuel prices were lower during the second half of 2015 than for the first half of the year.
However, American Airlines and United Continental are still making money hand over fist in an absolute sense. Additionally, both companies have cautiously predicted that revenue trends will strengthen sequentially going forward.
In this context, their share-repurchase programs will bolster earnings per share during a somewhat challenging period. American Airlines expects its Q2 diluted share count to be 591 million -- down more than 16% year over year -- assuming no further buybacks. Meanwhile, United's diluted share count declined by about 8% in Q1 and will probably decrease by double digits on a year-over-year basis starting with Q2.
Considering that shares of American Airlines and United Continental each trade for a little more than six times earnings (and less than four times pre-tax earnings), buying back lots of stock is a no-brainer. Both companies are steadily building value for investors by shrinking their share counts while it's extremely cheap to do so.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article American Airlines and United Continental Binge on Buybacks originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
Shares of both legacy carriers logged double-digit declines in the first six weeks of the year, recovered into positive territory by late March, and have since started to slip back again. The company remains on track to buy back about $5 billion of stock this year, so it's likely to announce another substantial buyback program in conjunction with its Q1 earnings report later this month. Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $30 calls on American Airlines Group.
|
It got off to a quick start last quarter, spending $1.6 billion to repurchase 39.3 million shares. United Continental starts its own buyback binge Unlike American Airlines, United Continental didn't spend an unusually large amount of money on buybacks last year. Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $30 calls on American Airlines Group.
|
American Airlines vs. United Continental Stock Performance, data by YCharts Not surprisingly, executives at American and United took advantage of this extreme volatility by cranking up their share-repurchase programs to stunning levels. American Airlines continues its liberal buybacks In 2015, American Airlines spent a massive $3.58 billion on share buybacks. United Continental starts its own buyback binge Unlike American Airlines, United Continental didn't spend an unusually large amount of money on buybacks last year.
|
American Airlines bought back $1.6 billion of stock in Q1. United Continental starts its own buyback binge Unlike American Airlines, United Continental didn't spend an unusually large amount of money on buybacks last year. A month later, the company disclosed that it now planned to buy back $1.5 billion of stock in Q1 and complete its $3 billion share-repurchase program during 2016.
|
8016.0
|
2016-04-11 00:00:00 UTC
|
Why Alcoa Inc (AA), American Airlines Group Inc (AAL) and Hatteras Financial Corp. (HTS) Are 3 of Today’s Best Stocks
|
AAL
|
https://www.nasdaq.com/articles/why-alcoa-inc-aa-american-airlines-group-inc-aal-and-hatteras-financial-corp.-hts-are-3-of
|
nan
|
nan
|
InvestorPlace InvestorPlace - Stock Market News, Stock Advice & Trading Tips
After slumping in four of last week's five trading sessions, U.S. stocks gave up gains from earlier in Monday's session to slide as the S&P 500 lost 0.27%. The Dow Jones Industrial Average declined 0.12% while the Nasdaq Composite finished the day down 0.36%.
Although oil prices rose, topping $40 per barrel, gold prices also climbed, underscoring the risk-off element to today's session. Expectations for slowing global economic growth and a dismal first-quarter earnings season could be keeping investors away from riskier assets.
With investors bracing for earnings season, there was plenty of analyst chatter to digest Monday and that helps explain why Alcoa Inc (NYSE: AA ), American Airlines Group Inc (NASDAQ: AAL ) and Hatteras Financial Corp. (NYSE: HTS ) are three of today's best stocks.
7 Healthcare Stocks That Are Fit as a Fiddle
Alcoa Inc (AA)
Aluminum maker Alcoa climbed almost 4% on above-average volume ahead of the company's first-quarter earnings report today after the close of U.S. markets. AA usually starts the quarterly avalanches of earnings reports, and this time around is no exception.
As InvestorPlace reported earlier Monday, analysts are expecting AA "to earn 2 cents per share on revenues of $5.14 billion for the quarter ended March 16. That would represent a 93% decline in earnings on a drop of nearly 12% in sales."
Shares of AA, formerly a member of the Dow Jones Industrial Average, are a little more than 1% lower year-to-date.
American Airlines Group Inc (AAL)
Shares of American Airlines, one of the largest U.S. carriers, added 0.6% after the company published bullish March traffic data. Texas-based AAL said its March traffic climbed 3.3% from a year earlier, adding that total capacity rose 3.8%. International flights were the primary drivers of AAL's traffic increase.
AAL said it expects first-quarter revenue per seat mile to decline 7% to 8%.
"Netting it all out our 1Q16 EPS estimate improves to $1.20 from $1.12 previously; full-year EPS declines to $5.35 from $5.49. American plans to report its 1Q16 results on Friday, April 22 nd ," according to part of an Evercore ISI note on AAL posted by Barron's .
Hatteras Financial Corp. (HTS)
Shares of mortgage real estate investment trust Hatteras Financial surged nearly 11% on volume that was more than 26 times the daily average after the company received a takeover offer from rival Annaly Capital Management, Inc. (NYSE: NLY ).
Annaly will pay $1.5 billion for HTS. HTS shareholders can receive cash, stock or choose a combination of the two. NLY believes acquiring HTS will boost its book value and per share earnings.
At the time of this writing, Todd Shriber did not own shares of any of the aforementioned securities.
More From InvestorPlace
7 Dividend Stocks That Have Paid Investors Since the 19th Century
9 Stocks to Buy for Rip-Roaring Growth Potential
7 Deep Value Stocks to Buy Soon
The post Why Alcoa Inc (AA), American Airlines Group Inc (AAL) and Hatteras Financial Corp. (HTS) Are 3 of Today's Best Stocks 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.
|
American plans to report its 1Q16 results on Friday, April 22 nd ," according to part of an Evercore ISI note on AAL posted by Barron's . With investors bracing for earnings season, there was plenty of analyst chatter to digest Monday and that helps explain why Alcoa Inc (NYSE: AA ), American Airlines Group Inc (NASDAQ: AAL ) and Hatteras Financial Corp. (NYSE: HTS ) are three of today's best stocks. American Airlines Group Inc (AAL) Shares of American Airlines, one of the largest U.S. carriers, added 0.6% after the company published bullish March traffic data.
|
With investors bracing for earnings season, there was plenty of analyst chatter to digest Monday and that helps explain why Alcoa Inc (NYSE: AA ), American Airlines Group Inc (NASDAQ: AAL ) and Hatteras Financial Corp. (NYSE: HTS ) are three of today's best stocks. More From InvestorPlace 7 Dividend Stocks That Have Paid Investors Since the 19th Century 9 Stocks to Buy for Rip-Roaring Growth Potential 7 Deep Value Stocks to Buy Soon The post Why Alcoa Inc (AA), American Airlines Group Inc (AAL) and Hatteras Financial Corp. (HTS) Are 3 of Today's Best Stocks appeared first on InvestorPlace . American Airlines Group Inc (AAL) Shares of American Airlines, one of the largest U.S. carriers, added 0.6% after the company published bullish March traffic data.
|
With investors bracing for earnings season, there was plenty of analyst chatter to digest Monday and that helps explain why Alcoa Inc (NYSE: AA ), American Airlines Group Inc (NASDAQ: AAL ) and Hatteras Financial Corp. (NYSE: HTS ) are three of today's best stocks. More From InvestorPlace 7 Dividend Stocks That Have Paid Investors Since the 19th Century 9 Stocks to Buy for Rip-Roaring Growth Potential 7 Deep Value Stocks to Buy Soon The post Why Alcoa Inc (AA), American Airlines Group Inc (AAL) and Hatteras Financial Corp. (HTS) Are 3 of Today's Best Stocks appeared first on InvestorPlace . American Airlines Group Inc (AAL) Shares of American Airlines, one of the largest U.S. carriers, added 0.6% after the company published bullish March traffic data.
|
Texas-based AAL said its March traffic climbed 3.3% from a year earlier, adding that total capacity rose 3.8%. More From InvestorPlace 7 Dividend Stocks That Have Paid Investors Since the 19th Century 9 Stocks to Buy for Rip-Roaring Growth Potential 7 Deep Value Stocks to Buy Soon The post Why Alcoa Inc (AA), American Airlines Group Inc (AAL) and Hatteras Financial Corp. (HTS) Are 3 of Today's Best Stocks appeared first on InvestorPlace . With investors bracing for earnings season, there was plenty of analyst chatter to digest Monday and that helps explain why Alcoa Inc (NYSE: AA ), American Airlines Group Inc (NASDAQ: AAL ) and Hatteras Financial Corp. (NYSE: HTS ) are three of today's best stocks.
|
8017.0
|
2016-04-08 00:00:00 UTC
|
Investors Are Shorting These 4 Tech Stocks Like Crazy
|
AAL
|
https://www.nasdaq.com/articles/investors-are-shorting-these-4-tech-stocks-crazy-2016-04-08
|
nan
|
nan
|
The Fitbit Blaze. Source: Fitbit.
When short-sellers become skeptical of a given company's future prospects, they borrow its shares to sell them short, betting that the company's stock is likely to decline. Almost every stock currently trading is being shorted by someone somewhere, but some stocks are shorted much more often and much more heavily than others. Fortunately, investors have a way to keep tabs by monitoring short interest.
Short interest can be a powerful indicator, and a key tool for investors. It represents the proportion of a given company's shares that have been borrowed by short-sellers. For most companies, especially traditional blue chips, short interest is usually in the low single-digits. When it begins to rise above 10%, investors should take note. A high short interest indicates a controversial company, one whose shares could be poised to head much lower.
Fitbit , Square , GrubHub , and Gogo are four tech stocks with extremely high short interest.
The smartwatch cometh
21.54% of Fitbit's outstanding shares were sold short as of March 15. That's a fairly sizable figure for a company that's turning a profit and trading with a reasonable valuation. Fitbit's trailing price-to-earnings ratio is just above 19, largely in line with the broader market. The problem is that Fitbit derives virtually all of its revenue from the sale of its wearable fitness trackers, a market that could dry up, or even vanish outright, in the years ahead.
Fitbit sells more wearables than any other firm -- it sold 8.1 million in the fourth quarter last year -- but its devices are simplistic. They can't run third-party apps, or integrate with existing smartphone platforms. The steady growth of smartwatches (which offer all of these features and more) poses a challenge -- perhaps an existential one. A consumer who buys an Android Wear watch, for example, is unlikely to pick up the new Fitbit Blaze , and that could strain the company's earnings in the years to come. Meanwhile, low-cost competitors such as Xiaomi are churning out similar trackers with ever-lower price tags.
Losing money with no credible plans for future profitability
Payment processor Square and Wi-Fi provider Gogo are in a different situation. Neither company is profitable, and it's not obviously clear that either will become profitable in the immediate future. For that reason, neither business can be valued under traditional metrics, and short-sellers may be skeptical of the value the market is currently placing on them. As of March 15, 29.68% of Square's shares and 28.81% of Gogo's shares had been sold short. Beyond valuation, there's doubts about the long-term viability of their businesses.
Square's potential for true long-term profitability may lie in the sale of ancillary services, rather than its actual core payment processing. Square has put an increasing degree of emphasis on its small-business products, including Square Capital and Caviar, through which it sells services to the merchants that use its readers. But the percentage of revenue that it derives from these services remains small -- less than 20% of its adjusted revenue last quarter. At the same time, its CEO, Jack Dorsey, splits his time between two firms (Square and Twitter ).
Gogo is in a very different business, but is in a similar operating situation. The company has been unable to turn a profit providing its core product. The demand for Wi-Fi services should only increase as the number of connected devices multiplies, but it's not clear that Gogo will benefit. In February, American Airlines -- its partner --sued the company in an effort to get out of its contract, alleging that one of its competitors offered a better product.
Competition is intensifying
GrubHub also faces a high degree of competition. In addition to Square, Uber, Yelp , and Groupon have all entered the market for takeout delivery in recent quarters, while a number of high-profile start-ups also compete in the space. GrubHub is profitable, but its valuation may be stretched, as it trades with a trailing price-to-earnings ratio of more than 50. As of March 15, 29.15% of GrubHub's outstanding shares had been sold short.
A number of analysts have downgraded GrubHub in recent months, mostly due to competitive fears, but saturation in several key markets could also limit GrubHub's upside. Also, GrubHub has long been seen as a potential takeover target, which may have inflated its valuation in the past -- but as more competitors appear, its prospects for a favorable sale appear increasingly unlikely.
Burning investors, squeezing shorts
It's costly and dangerous to sell stocks short. While a stock can theoretically rise to infinity, rewarding investors along the way, a short-seller's potential profit is limited by the specter of bankruptcy -- a stock can't fall below $0 per share. Moreover, short-sellers are responsible for dividend payments, and over the long term, the market tends to rise, lifting nearly every stock up in the process. If a stock you've sold short rises, you could be on the hook for buying shares at a price way above what you sold your borrowed shares for.
A stock with a high short interest suggests there's a large amount of people with a fairly strong level of conviction betting against the company. That's not to say they're right, but investors should approach these firms with a greater degree of caution.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article Investors Are Shorting These 4 Tech Stocks Like Crazy originally appeared on Fool.com.
Sam Mattera has no position in any stocks mentioned. The Motley Fool has the following options: long January 2017 $35 calls on American Airlines Group. The Motley Fool recommends Yelp. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
The problem is that Fitbit derives virtually all of its revenue from the sale of its wearable fitness trackers, a market that could dry up, or even vanish outright, in the years ahead. In addition to Square, Uber, Yelp , and Groupon have all entered the market for takeout delivery in recent quarters, while a number of high-profile start-ups also compete in the space. A stock with a high short interest suggests there's a large amount of people with a fairly strong level of conviction betting against the company.
|
When short-sellers become skeptical of a given company's future prospects, they borrow its shares to sell them short, betting that the company's stock is likely to decline. Fitbit , Square , GrubHub , and Gogo are four tech stocks with extremely high short interest. Losing money with no credible plans for future profitability Payment processor Square and Wi-Fi provider Gogo are in a different situation.
|
When short-sellers become skeptical of a given company's future prospects, they borrow its shares to sell them short, betting that the company's stock is likely to decline. Fitbit , Square , GrubHub , and Gogo are four tech stocks with extremely high short interest. While a stock can theoretically rise to infinity, rewarding investors along the way, a short-seller's potential profit is limited by the specter of bankruptcy -- a stock can't fall below $0 per share.
|
Almost every stock currently trading is being shorted by someone somewhere, but some stocks are shorted much more often and much more heavily than others. Fitbit , Square , GrubHub , and Gogo are four tech stocks with extremely high short interest. If a stock you've sold short rises, you could be on the hook for buying shares at a price way above what you sold your borrowed shares for.
|
8018.0
|
2016-04-06 00:00:00 UTC
|
Should You Drop American Airlines from Your Portfolio Now?
|
AAL
|
https://www.nasdaq.com/articles/should-you-drop-american-airlines-from-your-portfolio-now-2016-04-06
|
nan
|
nan
|
On Apr 5 2016, Zacks Investment Research downgraded airline transport carrier American Airlines Group Inc. AAL to a Zacks Rank #5 (Strong Sell).
American Airlines operates in a highly competitive industry with the presence of low-cost carriers like Southwest Airlines and Virgin America. Moreover, the disappointing first-quarter 2016 forecast for passenger revenue per available seat mile (PRASM) provided by the management raises concern. The metric is expected to decline in the range of 6% and 8% in the quarter, mainly because of foreign currency exchange rate risks.
Also, the current Zika virus outbreak has affected business for many airlines, including the likes of American Airlines. Carriers are presently offering fliers (particularly pregnant women) refunds or options to reschedule their travel to Zika-affected areas. Such events affect operations for carriers like American Airlines to a great extent.
Meanwhile, American Airlines along with Delta Air Lines Inc. DAL , United Continental Holdings Inc. UAL and Southwest Airlines Co. LUV are being investigated by the Department of Justice on the possibility of collusion to limit the availability of seats with the objective of keeping airfares high. Apart from the probe, the ongoing dispute with the Gulf carriers is also a cause for concern.
However, the company's efforts to reward shareholders through raised buybacks and dividend payments are impressive. During the fourth quarter, the company returned $1.2 billion to its shareholders through the payment of $72 million in dividends and share buyback of $1.1 billion. The company returned approximately 3.9 billion to its shareholders in 2015.
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 >>
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 AIR (LUV): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
AMER AIRLINES (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.
|
On Apr 5 2016, Zacks Investment Research downgraded airline transport carrier American Airlines Group Inc. AAL to a Zacks Rank #5 (Strong Sell). Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Moreover, the disappointing first-quarter 2016 forecast for passenger revenue per available seat mile (PRASM) provided by the management raises concern.
|
On Apr 5 2016, Zacks Investment Research downgraded airline transport carrier American Airlines Group Inc. AAL to a Zacks Rank #5 (Strong Sell). Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Meanwhile, American Airlines along with Delta Air Lines Inc. DAL , United Continental Holdings Inc. UAL and Southwest Airlines Co. LUV are being investigated by the Department of Justice on the possibility of collusion to limit the availability of seats with the objective of keeping airfares high.
|
On Apr 5 2016, Zacks Investment Research downgraded airline transport carrier American Airlines Group Inc. AAL to a Zacks Rank #5 (Strong Sell). Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. During the fourth quarter, the company returned $1.2 billion to its shareholders through the payment of $72 million in dividends and share buyback of $1.1 billion.
|
On Apr 5 2016, Zacks Investment Research downgraded airline transport carrier American Airlines Group Inc. AAL to a Zacks Rank #5 (Strong Sell). Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (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.
|
8019.0
|
2016-04-06 00:00:00 UTC
|
New Strong Sell Stocks for April 6th
|
AAL
|
https://www.nasdaq.com/articles/new-strong-sell-stocks-for-april-6th-2016-04-06
|
nan
|
nan
|
Here are 5 stocks added to the Zacks Rank #5 (Strong Sell) List today:
American Airlines Group IncAAL
Antares Pharma IncATRS
ArcBest CorpARCB
Attunity LtdATTU
BT Group plcBT
View the entire Zacks Rank #5 List .
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
ARCBEST CORP (ARCB): Free Stock Analysis Report
ATTUNITY LTD (ATTU): Free Stock Analysis Report
BT GRP PLC-ADR (BT): Free Stock Analysis Report
ANTARES PHARMA (ATRS): Free Stock Analysis Report
AMER AIRLINES (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.
|
Here are 5 stocks added to the Zacks Rank #5 (Strong Sell) List today: American Airlines Group IncAAL Antares Pharma IncATRS ArcBest CorpARCB Attunity LtdATTU BT Group plcBT View the entire Zacks Rank #5 List . Click to get this free report ARCBEST CORP (ARCB): Free Stock Analysis Report ATTUNITY LTD (ATTU): Free Stock Analysis Report BT GRP PLC-ADR (BT): Free Stock Analysis Report ANTARES PHARMA (ATRS): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Want the latest recommendations from Zacks Investment Research?
|
Here are 5 stocks added to the Zacks Rank #5 (Strong Sell) List today: American Airlines Group IncAAL Antares Pharma IncATRS ArcBest CorpARCB Attunity LtdATTU BT Group plcBT View the entire Zacks Rank #5 List . Click to get this free report ARCBEST CORP (ARCB): Free Stock Analysis Report ATTUNITY LTD (ATTU): Free Stock Analysis Report BT GRP PLC-ADR (BT): Free Stock Analysis Report ANTARES PHARMA (ATRS): Free Stock Analysis Report AMER AIRLINES (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.
|
Here are 5 stocks added to the Zacks Rank #5 (Strong Sell) List today: American Airlines Group IncAAL Antares Pharma IncATRS ArcBest CorpARCB Attunity LtdATTU BT Group plcBT View the entire Zacks Rank #5 List . Click to get this free report ARCBEST CORP (ARCB): Free Stock Analysis Report ATTUNITY LTD (ATTU): Free Stock Analysis Report BT GRP PLC-ADR (BT): Free Stock Analysis Report ANTARES PHARMA (ATRS): Free Stock Analysis Report AMER AIRLINES (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.
|
Here are 5 stocks added to the Zacks Rank #5 (Strong Sell) List today: American Airlines Group IncAAL Antares Pharma IncATRS ArcBest CorpARCB Attunity LtdATTU BT Group plcBT View the entire Zacks Rank #5 List . Click to get this free report ARCBEST CORP (ARCB): Free Stock Analysis Report ATTUNITY LTD (ATTU): Free Stock Analysis Report BT GRP PLC-ADR (BT): Free Stock Analysis Report ANTARES PHARMA (ATRS): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Want the latest recommendations from Zacks Investment Research?
|
8020.0
|
2016-04-04 00:00:00 UTC
|
American Airlines Group Inc: Why You Should Avoid AAL Stock
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-group-inc-why-you-should-avoid-aal-stock-2016-04-04
|
nan
|
nan
|
InvestorPlaceInvestorPlace - Stock Market News, Stock Advice & Trading Tips
Airline travel, nowadays, has become exceedingly commonplace. No longer is there a need for a travel agency to book a flight. Travelers basically buy the cheapest deal they can find on one of the travel sites, irrespective of the carrier. And the simple fact is cheaper fuel is not going to change that outcome.
For an airline stock to be an attractive investment, management has to do a couple of things. They have to cap expenses quickly, invest in growth carefully and, always, generate enough cushion for the bad times.
Unfortunately, none of this is true for American Airlines Group Inc ( AAL ) and that's why American Airlines stock is one to avoid.
The 10 Best Stocks to Buy for 2016 Through Q1
American Airlines: Too Slow, Too Heavy
Fuel costs have always been a big deal for airlines. Certainly, that was the case when fuel prices surged. But, even now, it's still a big deal, though prices have fallen to a record low.
With fuel costs being such a wild card, an airline stock needs to maximize its profits when fuel prices are low. In that way, they're able to compensate investors in the bad times. Unfortunately, this is where American Airlines stock fails.
When we compare American Airlines to JetBlue Airways Corp ( JBLU ), it's clear how much less profitable American Airlines stock really is.
In this case, we've used earnings margin (before tax) as an indicator. Earnings margin shows the percentage a company earns from every dollar of revenue. It's relevant here because it demonstrates efficiency; in other words, how many cents on the dollar the stock is earning before tax.
During the bad times, from 2007 to 2013, American Airlines earnings margin was negative, i.e. they were losing money. Over the same period, however, JetBlue was rather profitable.
But even more recently (2014 onwards), while fuel prices are comparatively low, American Airlines still lags JetBlue with a lower earnings margin.
But wait! There's more! American Airlines is burdened with debt. The company's poor earnings record meant that the money for operations had to come from somewhere. That somewhere is debt - and quite a lot of it.
American Airlines' debt is more than three times its equity. That is compared to about 0.5 equity for JetBlue stock. So not only do you have to worry about American Airlines' profitability, but its debt burden as well.
Click to Enlarge Source: Morningstar
AAL Stock Is No Bargain
Of course, the counter argument for buying American Airlines stock is that it's cheap. AAL stock is trading at a price-to-earnings multiple of 6. That's pretty low compared to JetBlue's P/E of 9.
Are investors being overly cautious? Not this time. Over the past 10 years, American Airlines was profitable only in four of them. So why would you pay more than six times earnings, when the company has barely been able to profit in four years?
You shouldn't.
American airlines stock is just not worth the risk. No surprise there.
But, in the same breath, our analysis not only reveals the weakness in AAL stock, but highlights the strength in JBLU stock. JetBlue glows when it's dark and shines when it's bright.
In the rough playfield of airlines stocks, JetBlue is at the top of its game.
As of this writing, Lior Alkalay did not hold a position in any of the aforementioned securities.
More From InvestorPlace
MVP Portfolio: The 6 Best Stocks You Can Buy Now
GoPro Inc: Will Karma Be the Catalyst GPRO Stock Needs?
10 Biotech Stocks With Big Catalysts Coming This Quarter
The post American Airlines Group Inc: Why You Should Avoid AAL 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.
|
Unfortunately, none of this is true for American Airlines Group Inc ( AAL ) and that's why American Airlines stock is one to avoid. Click to Enlarge Source: Morningstar AAL Stock Is No Bargain Of course, the counter argument for buying American Airlines stock is that it's cheap. AAL stock is trading at a price-to-earnings multiple of 6.
|
Unfortunately, none of this is true for American Airlines Group Inc ( AAL ) and that's why American Airlines stock is one to avoid. Click to Enlarge Source: Morningstar AAL Stock Is No Bargain Of course, the counter argument for buying American Airlines stock is that it's cheap. AAL stock is trading at a price-to-earnings multiple of 6.
|
Unfortunately, none of this is true for American Airlines Group Inc ( AAL ) and that's why American Airlines stock is one to avoid. Click to Enlarge Source: Morningstar AAL Stock Is No Bargain Of course, the counter argument for buying American Airlines stock is that it's cheap. AAL stock is trading at a price-to-earnings multiple of 6.
|
Unfortunately, none of this is true for American Airlines Group Inc ( AAL ) and that's why American Airlines stock is one to avoid. Click to Enlarge Source: Morningstar AAL Stock Is No Bargain Of course, the counter argument for buying American Airlines stock is that it's cheap. AAL stock is trading at a price-to-earnings multiple of 6.
|
8021.0
|
2016-04-04 00:00:00 UTC
|
Will Alaska Air Acquire Virgin America for Over $2 Billion?
|
AAL
|
https://www.nasdaq.com/articles/will-alaska-air-acquire-virgin-america-for-over-%242-billion-2016-04-04
|
nan
|
nan
|
Is the suspense regarding the sale of low-cost carrier Virgin AmericaVA over? If media reports are to be believed, then the answer would be "Yes". The bidding war between JetBlue Airways Corporation JBLU and Alaska Air Group ALK over the acquisition of Virgin America has reportedly been settled in favor of the latter.
Multiple media reports have suggested that Alaska Air will pay more than $2 billion ($2.5 billion, according to Wall Street Journal) to buy the California-based airlines. The offer price per share will vary in the range of $56 and $58, per Reuters. Reports have stated that the deal to buy Virgin America will be announced by the Seattle, WA-based carrier on Apr 4.
We would like to remind investors that Virgin America, partly owned by British billionaire investor, Richard Branson, went public in Nov 2014. The carrier has performed well since its IPO driven by the disciplined cost structure and focus on customer-friendly ways.
If all goes well, the tie up between Virgin America and Alaska Air would be the first significant merger in the airline space since late 2013 when AMR (American Airlines' parent group) and US Airways combined to create American Airlines Group AAL . With the buyout, if successful, Alaska Air would be able to expand to several key markets.
Media reports further suggested that Alaska Air, by combining with Virgin America, would climb to the fifth spot among the U.S. carriers in terms of traffic displacing JetBlue Airways. The deal, if announced, is likely to undergo immense scrutiny by regulators before being cleared. Investors' attention would be focused on whether the rumors regarding the proposed deal are confirmed.
Zacks Rank
Both Virgin America and Alaska Air Group currently carry a Zacks Rank #3 (Hold). A better-ranked stock in the airline space is China Eastern Airlines Corp. Ltd. CEA sporting a Zacks Rank #1 (Strong Buy).
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 >>
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 (JBLU): Free Stock Analysis Report
CHINA EASTN-ADR (CEA): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
VIRGIN AMERICA (VA): 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.
|
If all goes well, the tie up between Virgin America and Alaska Air would be the first significant merger in the airline space since late 2013 when AMR (American Airlines' parent group) and US Airways combined to create American Airlines Group AAL . Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. The bidding war between JetBlue Airways Corporation JBLU and Alaska Air Group ALK over the acquisition of Virgin America has reportedly been settled in favor of the latter.
|
If all goes well, the tie up between Virgin America and Alaska Air would be the first significant merger in the airline space since late 2013 when AMR (American Airlines' parent group) and US Airways combined to create American Airlines Group AAL . Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Rank Both Virgin America and Alaska Air Group currently carry a Zacks Rank #3 (Hold).
|
If all goes well, the tie up between Virgin America and Alaska Air would be the first significant merger in the airline space since late 2013 when AMR (American Airlines' parent group) and US Airways combined to create American Airlines Group AAL . Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. Media reports further suggested that Alaska Air, by combining with Virgin America, would climb to the fifth spot among the U.S. carriers in terms of traffic displacing JetBlue Airways.
|
If all goes well, the tie up between Virgin America and Alaska Air would be the first significant merger in the airline space since late 2013 when AMR (American Airlines' parent group) and US Airways combined to create American Airlines Group AAL . Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. Media reports further suggested that Alaska Air, by combining with Virgin America, would climb to the fifth spot among the U.S. carriers in terms of traffic displacing JetBlue Airways.
|
8022.0
|
2016-04-02 00:00:00 UTC
|
An Airline Battle Is Heating Up in Los Angeles
|
AAL
|
https://www.nasdaq.com/articles/airline-battle-heating-los-angeles-2016-04-02
|
nan
|
nan
|
At most major airports, there are one or two dominant airlines that carry most of the passenger traffic. It's rare to see rivals mount a serious challenge to the market leaders. Delta Air Lines' recent move into Seattle -- Alaska Air 's home turf -- has been a somewhat surprising exception to the rule.
It looks like the next big airline battle could come in Los Angeles. Right now, all three legacy carriers are in a dead heat there, with none holding more than 19% market share. However, American Airlines and Delta Air Lines are both trying to pull away from the pack.
Delta is ready to invest for growth in LA
Delta has been the fastest-growing airline at Los Angeles International Airport (LAX) since 2009 and it now offers about 160 peak day departures there. Delta roughly doubled its capacity at LAX between 2009 and 2015, as measured by the number of seats offered.
Delta has grown faster than any other airline in Los Angeles since 2009. Image source: The Motley Fool.
Delta now has nonstop flights to dozens of destinations from LAX, including up to 10 daily flights to New York and an hourly shuttle flight to San Francisco. Los Angeles is also a key trans-Pacific hub for Delta. It has nonstop flights to both Tokyo airports, Shanghai, and Sydney, and has requested government approval to begin flying to Beijing in December.
The main thing preventing Delta from expanding further at LAX is the airport's cramped terminals. The carrier recently completed a $229 million renovation of its terminal at LAX, but it's still far from being a state-of-the-art facility.
That's why Delta has signed a letter of intent with the city to completely renovate Terminal 2 and Terminal 3 and move Delta's entire operation there. This would allow Delta to build a world-class terminal from scratch (more or less). Delta may be willing to spend more than $1 billion on this project to make it by far the best terminal at LAX.
The new facility would presumably accommodate more gates than Delta currently controls. This would allow the carrier to ramp up its growth again. However, it will probably take at least five years to execute this project -- if it is even approved.
American Airlines looks for its own advantage
Today, American Airlines is the largest airline in Los Angeles -- if only by a few percentage points -- and it plans to build on that advantage. It currently operates about 200 daily departures at LAX and is in the midst of building two more gates there. That will allow American to add another 20 daily departures beginning in June.
American is also in the midst of a rapid international buildup in Los Angeles, which is becoming the carrier's main trans-Pacific gateway. Just a few months ago, American's only trans-Pacific flights from LAX were to Shanghai and Tokyo's Narita Airport.
American Airlines has been adding lots of international flights at LAX. Image source: American Airlines.
However, American Airlines launched new nonstop flights to Sydney in December and Tokyo's Haneda Airport in February. It has also announced new routes to Auckland and Hong Kong that will start later this year. Finally, just two weeks after Delta applied for LAX-Beijing flights, American Airlines put in its own application to serve that route -- with the same proposed starting date!
Clearly, American Airlines doesn't want to let Delta gain any route network advantage in Los Angeles. But the stakes are particularly high in this case. The U.S. government can only award one more daily flight to China under the current bilateral aviation treaty -- so it will have to pick either Delta or American and leave the other one out in the cold.
Competition will benefit travelers
The consolidation of the airline industry has meant that travelers in fortress hub markets often face high fares, while travelers in mid-size cities typically have limited nonstop flight options. In either case, service is frequently subpar.
That's not the case in Los Angeles, though. The rivalry between Delta and American -- with United Continental and Southwest Airlines not far behind -- will likely lead to low fares, lots of flight options, and better service. That's a great reason to root for a stalemate rather than a decisive victory by any airline in the battle for Los Angeles.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article An Airline Battle Is Heating Up in Los Angeles originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
Finally, just two weeks after Delta applied for LAX-Beijing flights, American Airlines put in its own application to serve that route -- with the same proposed starting date! The U.S. government can only award one more daily flight to China under the current bilateral aviation treaty -- so it will have to pick either Delta or American and leave the other one out in the cold. The rivalry between Delta and American -- with United Continental and Southwest Airlines not far behind -- will likely lead to low fares, lots of flight options, and better service.
|
That's why Delta has signed a letter of intent with the city to completely renovate Terminal 2 and Terminal 3 and move Delta's entire operation there. Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
Delta is ready to invest for growth in LA Delta has been the fastest-growing airline at Los Angeles International Airport (LAX) since 2009 and it now offers about 160 peak day departures there. American Airlines looks for its own advantage Today, American Airlines is the largest airline in Los Angeles -- if only by a few percentage points -- and it plans to build on that advantage. Clearly, American Airlines doesn't want to let Delta gain any route network advantage in Los Angeles.
|
Delta is ready to invest for growth in LA Delta has been the fastest-growing airline at Los Angeles International Airport (LAX) since 2009 and it now offers about 160 peak day departures there. That's not the case in Los Angeles, though. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
|
8023.0
|
2016-04-01 00:00:00 UTC
|
Why United Continental Holdings Inc (UAL), Marriott International Inc (MAR) and BlackBerry Ltd (BBRY) Are 3 of Today’s Worst Stocks
|
AAL
|
https://www.nasdaq.com/articles/why-united-continental-holdings-inc-ual-marriott-international-inc-mar-and-blackberry-ltd
|
nan
|
nan
|
InvestorPlace InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The initial reaction to this morning's encouraging jobs report for March was bearish - traders worried that any hint of economic strength might accelerate the Federal Reserve's rate hike plans for 2016. With more time to think about it though, investors decided the "Goldilocks" situation meant there's more liability in not owning stocks than there is in owning them. The S&P 500 finished the day at 2072.78, up 0.63% for the session, and up 1.8% for the week.
Friday wasn't a winner for all stocks, however. United Continental Holdings Inc (NYSE: UAL ), Marriott International Inc (NASDAQ: MAR ) and BlackBerry Ltd (NASDAQ: BBRY ) each finished the day rather deep in the red.
Here's what traders need to know.
United Continental Holdings Inc (UAL)
Just for the record, none of the major airline stocks had a particularly encouraging Friday. United Continental Holdings was the worst of the worst, however, dishing out the biggest loss to most investors.
UAL ended the day down more than 5%.
The prod for the pullback? Deutsche Bank lowered its ratings on airlines as a group , while CRT Capital Group did the equivalent by reducing its earnings estimates for United Continental Holdings, Delta Air Lines, Inc. (NYSE: DAL ) and American Airlines Group Inc (NASDAQ: AAL ).
7 F-Rated Stocks You'd Be a Fool to Own
Deutsche Bank analyst Michael Linenberg explained :
"We are lowering our rating on American Airlines, Delta Air Lines, United Continental and Hawaiian Holdings shares from Buy to Hold as several of our key macro indicators are suggesting a more challenging environment for 2016. More specifically, we have observed a slowdown in US corporate profits which is a concern given that they are a leading indicator of economic activity, and therefore, could lead to reduced demand for corporate travel."
Marriott International Inc (MAR)
It's a bit of a confusing love triangle, but MAR shares were hit hard today following news that Chinese insurer Anbang was giving up on its bidding war with Marriott to acquire Starwood Hotels & Resorts Worldwide Inc (NYSE: HOT ).
Marriott International was all set to purchase Starwood a few weeks ago, when at the 11th hour Anbang stepped in with a better offer. A bidding war ensued, and as is the case with any auction, it didn't take much for the bidding to reach uncomfortable prices. Anbang had second thoughts about its offer, retracting it, leaving Marriott as the highest (though only other) bidder .
Problem: While Marriott International was the winning bidder, some MAR shareholders think the bidding war meant the hotel chain paid too much for Starwood Hotels & Resorts with its $13.6 billion offer . The original offer was only $12.2 billion.
MAR ended the day down nearly 6%. HOT was down almost as much.
BlackBerry Ltd (BBRY)
Last but not least, BlackBerry may be transitioning into a software company, but the progress it's making on the software front isn't materializing as fast as its hardware and related services business is imploding.
Last quarter, BlackBerry lost 3 cents per share on revenue of $464 million . The bottom line beat the loss of 10 cents per share analysts were expecting, but the top line fell well short of the expected revenue of $563.2 million. Sales were down 30% on a year-over-year basis.
CEO John Chen put the requisite positive spin on the quarter's results, saying:
"Overall, BlackBerry's Q4 performance was solid as we made progress on the key elements of our strategy, which are to grow software faster than the mobility software market, achieve device profitability and generate positive free cash flow."
Investors weren't buying it though, sending BBRY shares down 7% on the unimpressive software revenue growth against a backdrop of the steep 53% decline in smartphone sales .
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
More From InvestorPlace
9 Hot Stocks to Toss in the Trash Before Q2
10 Tech Stocks That Are Disturbingly Overbought
7 Stocks That Are Rotten Inside and Out
The post Why United Continental Holdings Inc (UAL), Marriott International Inc (MAR) and BlackBerry Ltd (BBRY) Are 3 of Today's Worst Stocks 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.
|
Deutsche Bank lowered its ratings on airlines as a group , while CRT Capital Group did the equivalent by reducing its earnings estimates for United Continental Holdings, Delta Air Lines, Inc. (NYSE: DAL ) and American Airlines Group Inc (NASDAQ: AAL ). 7 F-Rated Stocks You'd Be a Fool to Own Deutsche Bank analyst Michael Linenberg explained : "We are lowering our rating on American Airlines, Delta Air Lines, United Continental and Hawaiian Holdings shares from Buy to Hold as several of our key macro indicators are suggesting a more challenging environment for 2016. CEO John Chen put the requisite positive spin on the quarter's results, saying: "Overall, BlackBerry's Q4 performance was solid as we made progress on the key elements of our strategy, which are to grow software faster than the mobility software market, achieve device profitability and generate positive free cash flow."
|
Deutsche Bank lowered its ratings on airlines as a group , while CRT Capital Group did the equivalent by reducing its earnings estimates for United Continental Holdings, Delta Air Lines, Inc. (NYSE: DAL ) and American Airlines Group Inc (NASDAQ: AAL ). United Continental Holdings Inc (NYSE: UAL ), Marriott International Inc (NASDAQ: MAR ) and BlackBerry Ltd (NASDAQ: BBRY ) each finished the day rather deep in the red. 7 F-Rated Stocks You'd Be a Fool to Own Deutsche Bank analyst Michael Linenberg explained : "We are lowering our rating on American Airlines, Delta Air Lines, United Continental and Hawaiian Holdings shares from Buy to Hold as several of our key macro indicators are suggesting a more challenging environment for 2016.
|
Deutsche Bank lowered its ratings on airlines as a group , while CRT Capital Group did the equivalent by reducing its earnings estimates for United Continental Holdings, Delta Air Lines, Inc. (NYSE: DAL ) and American Airlines Group Inc (NASDAQ: AAL ). United Continental Holdings Inc (NYSE: UAL ), Marriott International Inc (NASDAQ: MAR ) and BlackBerry Ltd (NASDAQ: BBRY ) each finished the day rather deep in the red. Marriott International Inc (MAR) It's a bit of a confusing love triangle, but MAR shares were hit hard today following news that Chinese insurer Anbang was giving up on its bidding war with Marriott to acquire Starwood Hotels & Resorts Worldwide Inc (NYSE: HOT ).
|
Deutsche Bank lowered its ratings on airlines as a group , while CRT Capital Group did the equivalent by reducing its earnings estimates for United Continental Holdings, Delta Air Lines, Inc. (NYSE: DAL ) and American Airlines Group Inc (NASDAQ: AAL ). United Continental Holdings Inc (UAL) Just for the record, none of the major airline stocks had a particularly encouraging Friday. Marriott International Inc (MAR) It's a bit of a confusing love triangle, but MAR shares were hit hard today following news that Chinese insurer Anbang was giving up on its bidding war with Marriott to acquire Starwood Hotels & Resorts Worldwide Inc (NYSE: HOT ).
|
8024.0
|
2016-04-01 00:00:00 UTC
|
Southwest Airlines to Connect Long Beach, Oakland from Summer
|
AAL
|
https://www.nasdaq.com/articles/southwest-airlines-to-connect-long-beach-oakland-from-summer-2016-04-01
|
nan
|
nan
|
In a bid to expand its operations, Dallas, TX-based low-cost carrier Southwest AirlinesLUV announced that it will operate flights connecting the Long Beach Airport and Oakland from Jun 5 this year. In keeping with its expansion initiatives, the carrier intends to operate four non-stop flights (on a daily basis) in either direction connecting the cities. In an attempt to attract more fliers to flights on its latest route, the carrier has kept the introductory one-way fares amazingly low at $49.
We note that Southwest Airlines had expressed its desire to serve Long Beach through an application filed in Feb 2016. In response to the application, the city awarded the carrier four slot pairs. Consequently, effective Jun 5, Long Beach will be the 98th city apart from being the 10 th airport in California served by the carrier. The new route to be served by the carrier will connect Long Beach with 19 cities across its network.
With Southwest Airlines set to serve Long Beach, competition will intensify at the Long Beach Airport. Carriers including JetBlue Airways JBLU and American Airlines AAL already have a presence there. Southwest Airlines continues to expect available seat miles (a measure of capacity) to grow in 2016 in the 5% to 6% range, on a year-over-year basis.
Zacks Rank
Southwest Airlines currently carries a Zacks Rank #3 (Hold). Investors interested in the airline space may consider China Eastern Airlines Corp. Ltd. CEA , which sports a Zacks Rank #1 (Strong Buy).
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 >>
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 AIR (LUV): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
CHINA EASTN-ADR (CEA): Free Stock Analysis Report
AMER AIRLINES (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.
|
Carriers including JetBlue Airways JBLU and American Airlines AAL already have a presence there. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. In keeping with its expansion initiatives, the carrier intends to operate four non-stop flights (on a daily basis) in either direction connecting the cities.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Carriers including JetBlue Airways JBLU and American Airlines AAL already have a presence there. Click to get this free report >> Want the latest recommendations from Zacks Investment Research?
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Carriers including JetBlue Airways JBLU and American Airlines AAL already have a presence there. In a bid to expand its operations, Dallas, TX-based low-cost carrier Southwest AirlinesLUV announced that it will operate flights connecting the Long Beach Airport and Oakland from Jun 5 this year.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Carriers including JetBlue Airways JBLU and American Airlines AAL already have a presence there. The new route to be served by the carrier will connect Long Beach with 19 cities across its network.
|
8025.0
|
2016-04-01 00:00:00 UTC
|
Nasdaq 100 Movers: MAR, TSLA
|
AAL
|
https://www.nasdaq.com/articles/nasdaq-100-movers-mar-tsla-2016-04-01
|
nan
|
nan
|
In early trading on Friday, shares of Tesla Motors ( TSLA ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 4.7%. Year to date, Tesla Motors registers a 0.3% gain.
And the worst performing Nasdaq 100 component thus far on the day is Marriott International ( MAR ), trading down 4.9%. Marriott International is showing a gain of 1.0% looking at the year to date performance.
Two other components making moves today are American Airlines Group ( AAL ), trading down 4.0%, and Regeneron Pharmaceuticals ( REGN ), trading up 4.1% on the day.
VIDEO: Nasdaq 100 Movers: MAR, TSLA
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.
|
Two other components making moves today are American Airlines Group ( AAL ), trading down 4.0%, and Regeneron Pharmaceuticals ( REGN ), trading up 4.1% on the day. And the worst performing Nasdaq 100 component thus far on the day is Marriott International ( MAR ), trading down 4.9%. Marriott International is showing a gain of 1.0% looking at the year to date performance.
|
Two other components making moves today are American Airlines Group ( AAL ), trading down 4.0%, and Regeneron Pharmaceuticals ( REGN ), trading up 4.1% on the day. And the worst performing Nasdaq 100 component thus far on the day is Marriott International ( MAR ), trading down 4.9%. VIDEO: Nasdaq 100 Movers: MAR, TSLA The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
Two other components making moves today are American Airlines Group ( AAL ), trading down 4.0%, and Regeneron Pharmaceuticals ( REGN ), trading up 4.1% on the day. In early trading on Friday, shares of Tesla Motors ( TSLA ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 4.7%. And the worst performing Nasdaq 100 component thus far on the day is Marriott International ( MAR ), trading down 4.9%.
|
Two other components making moves today are American Airlines Group ( AAL ), trading down 4.0%, and Regeneron Pharmaceuticals ( REGN ), trading up 4.1% on the day. In early trading on Friday, shares of Tesla Motors ( TSLA ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 4.7%. And the worst performing Nasdaq 100 component thus far on the day is Marriott International ( MAR ), trading down 4.9%.
|
8026.0
|
2016-03-31 00:00:00 UTC
|
The Zacks Analyst Blog Highlights: American Airlines Group, Virgin America, United Continental Holdings, JetBlue Airways and Alaska Air Group
|
AAL
|
https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-american-airlines-group-virgin-america-united
|
nan
|
nan
|
For Immediate Release
Chicago, IL - March 31, 2016 - 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 Group ( AAL ), Virgin America ( VA ), United Continental Holdings ( UAL ), JetBlue Airways Corporation ( JBLU ) and Alaska Air Group Inc. ( ALK ).
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: On Brussels & Virgin America
The past week saw quite a few updates in the airline space with the twin attacks in Brussels taking up most of the attention. Terror attacks on Mar 22 at the Brussels airport and the Maelbeek metro station in central Brussels negatively impacted travel stocks, which includes the airline players.
Apart from the horrific attacks, the past week saw Fort Worth, TX-based American Airlines Group ( AAL ) finally giving in to the profit sharing scheme after opposing it for a long time. Moreover, reports of the low-cost carrier Virgin America ( VA ) putting itself up for sale also grabbed headlines. Meanwhile, customer-friendly updates from United Continental Holdings ( UAL ) and JetBlue Airways Corporation ( JBLU ) also invited attention.
Read the last Airline Stock Roundup for Mar22, 2016 .
Recap of the Past Week's Most Important Stories
1. Airline stocks shed value following the twin terror attacks in Brussels which claimed over 25 lives apart from injuring more than 200 people. However, the impact of such terror attacks is generally found to be short-term in nature. Moreover, according to media reports, U.S. carriers do not have a huge exposure in Belgium. This should further limit the damage caused to stocks in the US airline industry (read more Airlines Attractive Despite Brussels Attacks: 5 Solid Picks ).
2. American Airlines reversed its stance on profit sharing and announced that it would pay 5% of 2016 pretax profits to its employees apart from those in management. Consequently, the carrier's first profit sharing payment will be made early next year (read more: Airlines Profit Sharing in Vogue, Courtesy Cheap Oil ).
3. Virgin America was a major news maker last week following a Bloomberg report on Mar 23 that suggested that the airline is up for sale . Reportedly, JetBlue Airways and Alaska Air Group Inc. ( ALK ) have submitted bids to buy the California-based low-cost carrier (read more: Virgin America Taking Bids: Gains 10% on the Day ).
4. In line with its efforts to expand further, United Continental inked a multi-year deal with premier Chinese carrier Air China. The carriers have also established a joint strategic initiative aimed at benefiting fliers in the two countries (read more: United Continental Aims to Broaden Chinese Footprint ).
5. In a customer-friendly move, JetBlue Airways announced the expansion of its partnership with Azul Brazilian Airlines. The unilateral codesharing pact inked by the two carriers will however take effect once it receives government clearance (read more: JetBlue Extends Partnership with Azul Brazilian Airlines ).
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 >>
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.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today . Find out What is happening in the stock market today on zacks.com.
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
AMER AIRLINES (AAL): Free Stock Analysis Report
VIRGIN AMERICA (VA): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
ALASKA AIR GRP (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.
|
Apart from the horrific attacks, the past week saw Fort Worth, TX-based American Airlines Group ( AAL ) finally giving in to the profit sharing scheme after opposing it for a long time. Stocks recently featured in the blog include American Airlines Group ( AAL ), Virgin America ( VA ), United Continental Holdings ( UAL ), JetBlue Airways Corporation ( JBLU ) and Alaska Air Group Inc. ( ALK ). Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here.
|
Stocks recently featured in the blog include American Airlines Group ( AAL ), Virgin America ( VA ), United Continental Holdings ( UAL ), JetBlue Airways Corporation ( JBLU ) and Alaska Air Group Inc. ( ALK ). Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Apart from the horrific attacks, the past week saw Fort Worth, TX-based American Airlines Group ( AAL ) finally giving in to the profit sharing scheme after opposing it for a long time.
|
Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks recently featured in the blog include American Airlines Group ( AAL ), Virgin America ( VA ), United Continental Holdings ( UAL ), JetBlue Airways Corporation ( JBLU ) and Alaska Air Group Inc. ( ALK ). Apart from the horrific attacks, the past week saw Fort Worth, TX-based American Airlines Group ( AAL ) finally giving in to the profit sharing scheme after opposing it for a long time.
|
Stocks recently featured in the blog include American Airlines Group ( AAL ), Virgin America ( VA ), United Continental Holdings ( UAL ), JetBlue Airways Corporation ( JBLU ) and Alaska Air Group Inc. ( ALK ). Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Apart from the horrific attacks, the past week saw Fort Worth, TX-based American Airlines Group ( AAL ) finally giving in to the profit sharing scheme after opposing it for a long time.
|
8027.0
|
2016-03-29 00:00:00 UTC
|
Airlines Profit Sharing in Vogue, Courtesy Cheap Oil
|
AAL
|
https://www.nasdaq.com/articles/airlines-profit-sharing-in-vogue-courtesy-cheap-oil-2016-03-29
|
nan
|
nan
|
It is a no-brainer that low oil prices have been nothing short of a godsend for stocks in the airline space. Just when Ebola fears were wreaking havoc on airline stocks in 2014, oil prices started to dip from over $100 levels, courtesy an over-supplied oil market as demand remained lackluster. Since fuel costs account for a major chunk of an airline company's operating expenses, the massive drop in oil price (currently hovering around the $40-per-barrel mark) has resulted in impressive bottom-line performances at carriers.
Bankruptcy Filings: A Thing of the Past for Legacy Carriers
Needless to say, the massive savings emanating from cheap oil has caused a rebound in the financial health of carriers. Most carriers had been under pressure on the financial front, even a few years back, as they struggled to cope with high fuel costs along with other challenges. Financial woes caused many leading carriers to file for bankruptcy. For example, Atlanta, GA-based Delta Air Lines DAL had plunged into bankruptcy in 2005. Its merger with Northwest Airlines, a few years later, helped the carrier come out of the mess.
American Airlines too had filed for bankruptcy in 2011. The subsequent merger of AMR (American Airlines' parent group) and US Airways in 2013, which resulted in the formation of American Airlines Group AAL , was a masterstroke. The carrier, which does not hedge fuel costs, has witnessed solid profits in recent times.
Financial Rebound: A Blessing for Employees and Investors
When carriers were under financial strain, their employees too had to bear the brunt. Pay cuts were a common practice then. However, with carriers currently in the pink of financial health, the situation is definitely looking better for employees.
The strong balance sheet of airline companies has also prompted a surge in shareholder-friendly activities like increased dividend payouts and an uptick in buyback activities. Naturally, employees too are now expecting better remuneration. Meanwhile, labor deals have taken center stage with major carriers including United Continental Holdings UAL and American Airlines apart from low-cost ones like Spirit Airlines SAVE being highly active on the labor font.
Profit Sharing Reaches New Highs: American Airlines Reverses Stance
Now financially strong, airlines have also gone employee-friendly with their profit sharing initiatives. For example, earlier this year, Delta's employees received the highest payout in the history of corporate profit sharing programs. The total payout of $1.5 billion meant that employees received more than 21% of their 2015 annual earnings. The comparable figure was 16% in 2014. Southwest Airlines LUV too announced its highest profit sharing payment (total of $620 million). The payment, to be made on Apr 29, equates to approximately 15.6% of each employee's earnings in 2015.
The popularity of the profit sharing scheme became evident last week when American Airlines Group, which had earlier opposed the scheme, also decided that its employees will enjoy a share of its profits.
We remind investors that Doug Parker, CEO of the Fort Worth, TX-based carrier had earlier consistently opposed the profit sharing scheme, calling it outdated and a method to merely make up for wage cuts. Parker had been in favor of pay raises instead without any variable component attached. However, last week the carrier reversed its stance and announced that it would pay 5% of 2016 pretax profits to its employees apart from those in management. Consequently, the carrier's first profit sharing payment will be made early next year. Although Parker has acknowledged that the 5% payout is lower compared to its peers, the carrier intends to offer higher hourly pay rates to make up for the lesser share.
While announcing the profit scheme through a letter, Parker stated that even though he still believes that the most effective means of compensation comes through a raise in base pay, he conceded that profit-sharing enhances team-spirit. With the top U.S. carrier (in terms of traffic) changing its stance and resorting to profit sharing, we firmly believe that that focus will stay on this employee-friendly scheme going forward as oil prices remain soft continuing to boost the financial health of carriers.
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 >>
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 AIR (LUV): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
SPIRIT AIRLINES (SAVE): Free Stock Analysis Report
AMER AIRLINES (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.
|
The subsequent merger of AMR (American Airlines' parent group) and US Airways in 2013, which resulted in the formation of American Airlines Group AAL , was a masterstroke. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Since fuel costs account for a major chunk of an airline company's operating expenses, the massive drop in oil price (currently hovering around the $40-per-barrel mark) has resulted in impressive bottom-line performances at carriers.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The subsequent merger of AMR (American Airlines' parent group) and US Airways in 2013, which resulted in the formation of American Airlines Group AAL , was a masterstroke. Profit Sharing Reaches New Highs: American Airlines Reverses Stance Now financially strong, airlines have also gone employee-friendly with their profit sharing initiatives.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The subsequent merger of AMR (American Airlines' parent group) and US Airways in 2013, which resulted in the formation of American Airlines Group AAL , was a masterstroke. Profit Sharing Reaches New Highs: American Airlines Reverses Stance Now financially strong, airlines have also gone employee-friendly with their profit sharing initiatives.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The subsequent merger of AMR (American Airlines' parent group) and US Airways in 2013, which resulted in the formation of American Airlines Group AAL , was a masterstroke. Profit Sharing Reaches New Highs: American Airlines Reverses Stance Now financially strong, airlines have also gone employee-friendly with their profit sharing initiatives.
|
8028.0
|
2016-03-29 00:00:00 UTC
|
Oil Prices Recover: What About Airline Stocks?
|
AAL
|
https://www.nasdaq.com/articles/oil-prices-recover-what-about-airline-stocks-2016-03-29
|
nan
|
nan
|
Airline Stock Performances vs. Brent Crude Oil Price, data by YCharts .
However, since reaching a nadir on January 20, oil prices have jumped more than 50%. Airline stocks have rebounded, too. Southwest Airlines stock is back where it was three months ago, while shares of American, Delta, and United are now down modestly year to date.
Making sense of the relationship
So, why have airline stocks been tracking oil prices so closely recently? To some extent, there's a direct link, as low oil prices have caused sharp declines in energy industry activity. That's hurt the economies of many oil-producing countries. Energy companies have also slashed corporate travel -- this had a particularly severe impact on United, which operates a big hub in Houston.
However, a bigger driver of the airline stock price declines appears to be a widespread fear that low oil prices were causing airlines to dial up capacity growth, causing fares to fall.
Indeed, domestic airline capacity increased 5.3% year over year in 2015, according to the U.S. Department of Transportation. That was the biggest increase since 2004 and nearly equaled the total domestic capacity increase over the previous five years combined! Not surprisingly, average airfares have been declining for about a year now.
Airfares have been declining across the industry over the past year.
Nevertheless, airline industry profits surged to a record high in 2015 and may continue to rise in 2016 as fuel hedging losses dissipate at carriers like Delta and United. This suggests that a big reason why airlines haven't reined in capacity growth yet is that they are making lots of money, even with lower fares.
What happens now?
The jump in oil prices and airline stocks over the past two months indicates that investors have become more comfortable with the global economic outlook. It also implies that investors expect airline unit revenue to return to growth soon, bolstered by tighter capacity discipline.
Indeed, airlines have recently displayed increasing urgency to get unit revenue growing again. However, it's not clear that this has anything to do with the recent rise in oil prices. And there haven't been any notable capacity cut announcements in the past two months.
Meanwhile, the further oil prices rise, the more pressure there is for airlines to grow unit revenue. When oil was in the $30/barrel range, airlines could look forward to another year of solid profit growth even with declining unit revenue. If oil rises toward the $50/barrel mark this year, some airlines could find their profits eroding quickly if fares keep falling.
In the long run, airlines should be able to offset the majority of any fuel price increase through higher fares. The U.S. airline industry is concentrated enough that American, Delta, Southwest, and United can cut capacity if necessary without worrying too much about market share losses.
However, in the short run, all bets are off. There is bound to be a lag between when oil prices start to rise and when airlines dial back capacity to bolster fares. Furthermore, it's doubtful that many airlines could replicate their current profit margins if oil were to return to the $80-$100/barrel level at some point in the future.
Higher oil prices could ultimately help get airlines' unit revenue growing again. But if oil prices continue rising, airline investors may find themselves longing for the days of rock-bottom oil prices and falling unit revenue -- because that has been a recipe for record profits.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early, in-the-know investors! To be one of them, just click here .
The article Oil Prices Recover: What About Airline Stocks? originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
Southwest Airlines stock is back where it was three months ago, while shares of American, Delta, and United are now down modestly year to date. Nevertheless, airline industry profits surged to a record high in 2015 and may continue to rise in 2016 as fuel hedging losses dissipate at carriers like Delta and United. This suggests that a big reason why airlines haven't reined in capacity growth yet is that they are making lots of money, even with lower fares.
|
However, a bigger driver of the airline stock price declines appears to be a widespread fear that low oil prices were causing airlines to dial up capacity growth, causing fares to fall. But if oil prices continue rising, airline investors may find themselves longing for the days of rock-bottom oil prices and falling unit revenue -- because that has been a recipe for record profits. Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group.
|
However, a bigger driver of the airline stock price declines appears to be a widespread fear that low oil prices were causing airlines to dial up capacity growth, causing fares to fall. Meanwhile, the further oil prices rise, the more pressure there is for airlines to grow unit revenue. But if oil prices continue rising, airline investors may find themselves longing for the days of rock-bottom oil prices and falling unit revenue -- because that has been a recipe for record profits.
|
However, a bigger driver of the airline stock price declines appears to be a widespread fear that low oil prices were causing airlines to dial up capacity growth, causing fares to fall. In the long run, airlines should be able to offset the majority of any fuel price increase through higher fares. But if oil prices continue rising, airline investors may find themselves longing for the days of rock-bottom oil prices and falling unit revenue -- because that has been a recipe for record profits.
|
8029.0
|
2016-03-24 00:00:00 UTC
|
AAL Makes Notable Cross Below Critical Moving Average
|
AAL
|
https://www.nasdaq.com/articles/aal-makes-notable-cross-below-critical-moving-average-2016-03-24
|
nan
|
nan
|
In trading on Thursday, shares of American Airlines Group Inc (Symbol: AAL) crossed below their 200 day moving average of $41.51, changing hands as low as $40.19 per share. American Airlines Group Inc shares are currently trading off about 2.7% on the day. The chart below shows the one year performance of AAL shares, versus its 200 day moving average:
Looking at the chart above, AAL's low point in its 52 week range is $34.10 per share, with $54.41 as the 52 week high point - that compares with a last trade of $40.88.
According to the ETF Finder at ETF Channel, AAL makes up 4.83% of the PowerShares Dynamic Leisure and Entertainment Portfolio ETF (Symbol: PEJ) which is trading lower by about 1% on the day Thursday.
Click here to find out which 9 other stocks recently crossed below their 200 day moving average »
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.
|
In trading on Thursday, shares of American Airlines Group Inc (Symbol: AAL) crossed below their 200 day moving average of $41.51, changing hands as low as $40.19 per share. The chart below shows the one year performance of AAL shares, versus its 200 day moving average: Looking at the chart above, AAL's low point in its 52 week range is $34.10 per share, with $54.41 as the 52 week high point - that compares with a last trade of $40.88. According to the ETF Finder at ETF Channel, AAL makes up 4.83% of the PowerShares Dynamic Leisure and Entertainment Portfolio ETF (Symbol: PEJ) which is trading lower by about 1% on the day Thursday.
|
In trading on Thursday, shares of American Airlines Group Inc (Symbol: AAL) crossed below their 200 day moving average of $41.51, changing hands as low as $40.19 per share. The chart below shows the one year performance of AAL shares, versus its 200 day moving average: Looking at the chart above, AAL's low point in its 52 week range is $34.10 per share, with $54.41 as the 52 week high point - that compares with a last trade of $40.88. According to the ETF Finder at ETF Channel, AAL makes up 4.83% of the PowerShares Dynamic Leisure and Entertainment Portfolio ETF (Symbol: PEJ) which is trading lower by about 1% on the day Thursday.
|
In trading on Thursday, shares of American Airlines Group Inc (Symbol: AAL) crossed below their 200 day moving average of $41.51, changing hands as low as $40.19 per share. The chart below shows the one year performance of AAL shares, versus its 200 day moving average: Looking at the chart above, AAL's low point in its 52 week range is $34.10 per share, with $54.41 as the 52 week high point - that compares with a last trade of $40.88. According to the ETF Finder at ETF Channel, AAL makes up 4.83% of the PowerShares Dynamic Leisure and Entertainment Portfolio ETF (Symbol: PEJ) which is trading lower by about 1% on the day Thursday.
|
In trading on Thursday, shares of American Airlines Group Inc (Symbol: AAL) crossed below their 200 day moving average of $41.51, changing hands as low as $40.19 per share. According to the ETF Finder at ETF Channel, AAL makes up 4.83% of the PowerShares Dynamic Leisure and Entertainment Portfolio ETF (Symbol: PEJ) which is trading lower by about 1% on the day Thursday. The chart below shows the one year performance of AAL shares, versus its 200 day moving average: Looking at the chart above, AAL's low point in its 52 week range is $34.10 per share, with $54.41 as the 52 week high point - that compares with a last trade of $40.88.
|
8030.0
|
2016-03-24 00:00:00 UTC
|
The Zacks Analyst Blog Highlights: Delta Air Lines, American Airlines Group, Marriott International, Starwood Hotels & Resorts Worldwide and United Continental
|
AAL
|
https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-delta-air-lines-american-airlines-group-marriott
|
nan
|
nan
|
For Immediate Release
Chicago, IL - March 24, 2016 - 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 the Delta Air Lines, Inc. ( DAL ), American Airlines Group Inc. ( AAL ), Marriott International, Inc. ( MAR ), Starwood Hotels & Resorts Worldwide Inc. ( HOT ) and United Continental Holdings ( UAL ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Wednesday's Analyst Blog:
5 Travel Stocks Hit by Brussels Attack
At least 31 people were killed and more than 200 injured during terrorist attacks on Brussels airport and a metro station on Tuesday. The Islamic State (IS) claimed responsibility for the two attacks which took place on Tuesday. These tragic developments sent ripples throughout Europe and the world at large. Authorities have been forced to reevaluate levels of security at airports and public transport.
Travel, tourism and airline stocks took a hit immediately after these developments. Following indications that these events may be linked to the attacks which occurred in Paris in November, airline, travel and tourism companies may be significantly affected as travel to Europe is likely to fall.
Links to Paris Attacks
According to experts, the blasts were being planned before the arrest of a French citizen last Friday. The individual is believed to have played a major role in the attacks on Paris which took place on Nov 13. Explosives and evidence of his association with the IS were discovered during his arrest. Meanwhile, the IS has claimed responsibility for the attacks on Maelbeek metro station and Zaventem airport.
IS has also issued a warning to those countries which have joined in a coalition against the group and are actively engaged in a conflict against it in Iraq and Syria. Public transport had been suspended following the attacks but normalcy has now begun to return to Belgium's capital. Despite the resumption of some services, the city's metro system and airport remain closed for now.
Travel, Airline Stocks Decline
Immediately after these attacks, travel and tourism stocks took a considerable hit. Delta Air Lines, Inc. ( DAL ) and American Airlines Group Inc. ( AAL ) declined by a minimum of 1.5% on Tuesday. Meanwhile, Marriott International, Inc. ( MAR ) and Starwood Hotels & Resorts Worldwide Inc. ( HOT ) fell by 1.9% and 0.4%, respectively. Additionally, United Continental Holdings ( UAL ) which owns United Airlines experienced a 1% fall in its stock.
United Airlines has decided to exempt passengers from the change in fees and gap between fares in case they decide to reschedule their flights to Brussels up to Apr 1. Meanwhile, American Airlines has decided to suspend Wednesday's and Thursday's flights to Brussels. Both companies are also reaching out to employees affected by these events. Marriot, Starwood and Delta have confirmed that employees and customers caught up in these events are safe.
Summer Travel to Europe Likely to Fall
Following Tuesday's attacks in Brussels, travel and tourism to Europe is likely to be affected this summer. According to travel company Thomas Cook, summer bookings have declined compared to last year. Only 40% of the summer season has been sold yet, primarily because of the recent events in Paris and now Brussels.
According to airfare prediction app Hopper, bookings to France have declined 8-10% year-over-year following November's events. Further, the number of Internet searches made on the site show that interest in Europe as a destination has declined 13% year to date compared to the year ago period.
However, there are still some factors in play which could reduce the impact of these events. A strong dollar, decline in airfares due to cheaper fuel prices and affordable accommodation have increased the area's attractiveness to travelers.
In Conclusion
It is likely that travel to Europe is likely to suffer somewhat over the year following the recent terrorist attacks. Additionally, the migrant crisis is also likely to force travelers to rethink their choice of destinations.
In this event, it is likely that travel, airline and tourism companies will garner gains from regions like Latin America and Australia. For instance, the Rio Olympics is likely to attract significant traveler interest. In any event, travel in regions other than Europe is likely to pickup because of recent developments.
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 >>
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.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today . Find out What is happening in the stock market today on zacks.com.
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 (DAL): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
MARRIOTT INTL-A (MAR): Free Stock Analysis Report
STARWOOD HOTELS (HOT): Free Stock Analysis Report
UNITED CONT HLD (UAL): 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.
|
Stocks recently featured in the blog include the Delta Air Lines, Inc. ( DAL ), American Airlines Group Inc. ( AAL ), Marriott International, Inc. ( MAR ), Starwood Hotels & Resorts Worldwide Inc. ( HOT ) and United Continental Holdings ( UAL ). Delta Air Lines, Inc. ( DAL ) and American Airlines Group Inc. ( AAL ) declined by a minimum of 1.5% on Tuesday. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report MARRIOTT INTL-A (MAR): Free Stock Analysis Report STARWOOD HOTELS (HOT): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
Stocks recently featured in the blog include the Delta Air Lines, Inc. ( DAL ), American Airlines Group Inc. ( AAL ), Marriott International, Inc. ( MAR ), Starwood Hotels & Resorts Worldwide Inc. ( HOT ) and United Continental Holdings ( UAL ). Delta Air Lines, Inc. ( DAL ) and American Airlines Group Inc. ( AAL ) declined by a minimum of 1.5% on Tuesday. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report MARRIOTT INTL-A (MAR): Free Stock Analysis Report STARWOOD HOTELS (HOT): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report MARRIOTT INTL-A (MAR): Free Stock Analysis Report STARWOOD HOTELS (HOT): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks recently featured in the blog include the Delta Air Lines, Inc. ( DAL ), American Airlines Group Inc. ( AAL ), Marriott International, Inc. ( MAR ), Starwood Hotels & Resorts Worldwide Inc. ( HOT ) and United Continental Holdings ( UAL ). Delta Air Lines, Inc. ( DAL ) and American Airlines Group Inc. ( AAL ) declined by a minimum of 1.5% on Tuesday.
|
Stocks recently featured in the blog include the Delta Air Lines, Inc. ( DAL ), American Airlines Group Inc. ( AAL ), Marriott International, Inc. ( MAR ), Starwood Hotels & Resorts Worldwide Inc. ( HOT ) and United Continental Holdings ( UAL ). Delta Air Lines, Inc. ( DAL ) and American Airlines Group Inc. ( AAL ) declined by a minimum of 1.5% on Tuesday. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report MARRIOTT INTL-A (MAR): Free Stock Analysis Report STARWOOD HOTELS (HOT): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
8031.0
|
2016-03-23 00:00:00 UTC
|
Southwest Airlines' (LUV) Quest to Fly to Cuba Gains Support
|
AAL
|
https://www.nasdaq.com/articles/southwest-airlines-luv-quest-to-fly-to-cuba-gains-support-2016-03-23
|
nan
|
nan
|
Like its peers in the airline space, Dallas-based Southwest Airlines Co.LUV too is eager to get permission from the U.S. Department of Transportation (DOT) to operate commercial flights to Cuba. The carrier joined its fellow-U.S. based carriers like American Airlines Group Inc. AAL , Delta Air Lines, Inc. DAL and Alaska Air Group ALK in applying to the DOT to add Cuba, a favorite tourist spot, to its list of destinations.
Southwest Airlines' application to the DOT was submitted earlier in the month, whereby it sought permission to operate nonstop flights to busy Cuban destinations including Havana from Ft. Lauderdale, Tampa, and Orlando. The carrier's application has found support from more than 120 organizations so far, with signatures in excess of 25,000 supporting the petition.
We remind investors that the U.S. had severed diplomatic ties with Cuba in 1961. President Obama called for the restoration of diplomatic ties with the island in 2014. A year later, the U.S. signed an aviation deal with Cuba to allow 110 scheduled flights on a daily basis to the island. The plethora of applications to the DOT followed the finalization of the bilateral air service arrangement between the two formerly estranged nations. The DOT will review the proposals before announcing its final verdict.
We note U.S. carriers are already enjoying happy times, courtesy low oil prices . In the event of the receipt of a green signal to operate commercial flights to Cuba, they will be benefited further as passenger traffic will increase significantly thereby augmenting their top lines. In fact most carriers are optimistic of gaining approval as can be made out from Southwest Airlines' assertion that it expects to start Cuban service late this year itself. Whatever the outcome, we expect investor focus to remain on this burning issue, going ahead.
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 >>
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 AIR (LUV): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
AMER AIRLINES (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.
|
The carrier joined its fellow-U.S. based carriers like American Airlines Group Inc. AAL , Delta Air Lines, Inc. DAL and Alaska Air Group ALK in applying to the DOT to add Cuba, a favorite tourist spot, to its list of destinations. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Southwest Airlines' application to the DOT was submitted earlier in the month, whereby it sought permission to operate nonstop flights to busy Cuban destinations including Havana from Ft. Lauderdale, Tampa, and Orlando.
|
The carrier joined its fellow-U.S. based carriers like American Airlines Group Inc. AAL , Delta Air Lines, Inc. DAL and Alaska Air Group ALK in applying to the DOT to add Cuba, a favorite tourist spot, to its list of destinations. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (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 carrier joined its fellow-U.S. based carriers like American Airlines Group Inc. AAL , Delta Air Lines, Inc. DAL and Alaska Air Group ALK in applying to the DOT to add Cuba, a favorite tourist spot, to its list of destinations. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Like its peers in the airline space, Dallas-based Southwest Airlines Co.LUV too is eager to get permission from the U.S. Department of Transportation (DOT) to operate commercial flights to Cuba.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The carrier joined its fellow-U.S. based carriers like American Airlines Group Inc. AAL , Delta Air Lines, Inc. DAL and Alaska Air Group ALK in applying to the DOT to add Cuba, a favorite tourist spot, to its list of destinations. Like its peers in the airline space, Dallas-based Southwest Airlines Co.LUV too is eager to get permission from the U.S. Department of Transportation (DOT) to operate commercial flights to Cuba.
|
8032.0
|
2016-03-23 00:00:00 UTC
|
5 Travel Stocks Hit by the Brussels Attacks
|
AAL
|
https://www.nasdaq.com/articles/5-travel-stocks-hit-brussels-attacks-2016-03-23
|
nan
|
nan
|
At least 31 people were killed and more than 200 injured during terrorist attacks on Brussels airport and a metro station on Tuesday. The Islamic State (IS) claimed responsibility for the two attacks which took place on Tuesday. These tragic developments sent ripples throughout Europe and the world at large. Authorities have been forced to reevaluate levels of security at airports and public transport.
Travel, tourism and airline stocks took a hit immediately after these developments. Following indications that these events may be linked to the attacks which occurred in Paris in November, airline, travel and tourism companies may be significantly affected as travel to Europe is likely to fall.
Links to Paris Attacks
According to experts, the blasts were being planned before the arrest of a French citizen last Friday. The individual is believed to have played a major role in the attacks on Paris which took place on Nov 13. Explosives and evidence of his association with the IS were discovered during his arrest. Meanwhile, the IS has claimed responsibility for the attacks on Maelbeek metro station and Zaventem airport.
IS has also issued a warning to those countries which have joined in a coalition against the group and are actively engaged in a conflict against it in Iraq and Syria. Public transport had been suspended following the attacks but normalcy has now begun to return to Belgium's capital. Despite the resumption of some services, the city's metro system and airport remain closed for now.
Travel, Airline Stocks Decline
Immediately after these attacks, travel and tourism stocks took a considerable hit. Delta Air Lines, Inc. DAL and American Airlines Group Inc. AAL declined by a minimum of 1.5% on Tuesday. Meanwhile, Marriott International, Inc. MAR and Starwood Hotels & Resorts Worldwide Inc. HOT fell by 1.9% and 0.4%, respectively. Additionally, United Continental Holdings UAL which owns United Airlines experienced a 1% fall in its stock.
United Airlines has decided to exempt passengers from the change in fees and gap between fares in case they decide to reschedule their flights to Brussels up to Apr 1. Meanwhile, American Airlines has decided to suspend Wednesday's and Thursday's flights to Brussels. Both companies are also reaching out to employees affected by these events. Marriot, Starwood and Delta have confirmed that employees and customers caught up in these events are safe.
Summer Travel to Europe Likely to Fall
Following Tuesday's attacks in Brussels, travel and tourism to Europe is likely to be affected this summer. According to travel company Thomas Cook, summer bookings have declined compared to last year. Only 40% of the summer season has been sold yet, primarily because of the recent events in Paris and now Brussels.
According to airfare prediction app Hopper, bookings to France have declined 8-10% year-over-year following November's events. Further, the number of Internet searches made on the site show that interest in Europe as a destination has declined 13% year to date compared to the year ago period.
However, there are still some factors in play which could reduce the impact of these events. A strong dollar, decline in airfares due to cheaper fuel prices and affordable accommodation have increased the area's attractiveness to travelers.
In Conclusion
It is likely that travel to Europe is likely to suffer somewhat over the year following the recent terrorist attacks. Additionally, the migrant crisis is also likely to force travelers to rethink their choice of destinations.
In this event, it is likely that travel, airline and tourism companies will garner gains from regions like Latin America and Australia. For instance, the Rio Olympics is likely to attract significant traveler interest. In any event, travel in regions other than Europe is likely to pickup because of recent developments.
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 >>
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 (DAL): Free Stock Analysis Report
STARWOOD HOTELS (HOT): Free Stock Analysis Report
MARRIOTT INTL-A (MAR): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
AMER AIRLINES (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.
|
Delta Air Lines, Inc. DAL and American Airlines Group Inc. AAL declined by a minimum of 1.5% on Tuesday. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report STARWOOD HOTELS (HOT): Free Stock Analysis Report MARRIOTT INTL-A (MAR): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. IS has also issued a warning to those countries which have joined in a coalition against the group and are actively engaged in a conflict against it in Iraq and Syria.
|
Delta Air Lines, Inc. DAL and American Airlines Group Inc. AAL declined by a minimum of 1.5% on Tuesday. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report STARWOOD HOTELS (HOT): Free Stock Analysis Report MARRIOTT INTL-A (MAR): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Following indications that these events may be linked to the attacks which occurred in Paris in November, airline, travel and tourism companies may be significantly affected as travel to Europe is likely to fall.
|
Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report STARWOOD HOTELS (HOT): Free Stock Analysis Report MARRIOTT INTL-A (MAR): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Delta Air Lines, Inc. DAL and American Airlines Group Inc. AAL declined by a minimum of 1.5% on Tuesday. Following indications that these events may be linked to the attacks which occurred in Paris in November, airline, travel and tourism companies may be significantly affected as travel to Europe is likely to fall.
|
Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report STARWOOD HOTELS (HOT): Free Stock Analysis Report MARRIOTT INTL-A (MAR): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Delta Air Lines, Inc. DAL and American Airlines Group Inc. AAL declined by a minimum of 1.5% on Tuesday. Following indications that these events may be linked to the attacks which occurred in Paris in November, airline, travel and tourism companies may be significantly affected as travel to Europe is likely to fall.
|
8033.0
|
2016-03-23 00:00:00 UTC
|
10 Stocks That Could Derail Your Retirement
|
AAL
|
https://www.nasdaq.com/articles/10-stocks-could-derail-your-retirement-2016-03-23
|
nan
|
nan
|
InvestorPlaceInvestorPlace - Stock Market News, Stock Advice & Trading Tips
Are you accumulating enough of an nest egg to maintain a lifestyle comparable to the one you enjoyed while still working?
It's a question you'll have to frequently ask yourself as you navigate a path toward retirement. And typically, when you do that, you'll think about the world in terms of stocks vs. bonds.
And that's fair. After all, too much in bonds, and we might not have enough to do so over the life of our retirement; too much in stocks, and a recurrence of what happened in 2008 could permanently alter our spending habits. Experts agree that asset allocation has a major impact on whether we will successfully reach our retirement goals.
Every person's decision-making is slightly different, but we all arrive at the same conclusion: We want to have enough in retirement.
But whether you're 100% in stocks or 40% in stocks, picking the wrong stocks could also be detrimental to your health.
7 Rotten-Egg Stocks to Trash Before Easter
Many experts recommend passive indexing, which protects you from specific company risk. But plenty of people hold stocks, and that's not going to change anytime soon. So if you are going to hold individual assets, avoid these 10 stocks, because they could seriously derail your retirement.
Stocks That Could Derail Your Retirement: American Airlines Group Inc (AAL)
Source: Oliver Holzbauer via Flickr
Airline stocks have been on a tear for several years now. Ironically, only in 2015 did they hit the skids - just as oil prices were spiraling downward.
And whether we're talking five years or 10, airline stocks have outperformed the S&P 500 - handily.
American Airlines Group Inc ( AAL ), which began trading in late December 2013 after merging with US Airways, had a strong showing in 2014, more than doubling its stock price before it gave back some of those gains in 2015. Year-to-date, it's up almost 3%.
However, AAL is at a crossroad, and I don't think it's going to end well.
That's because its pilots - some of the strongest supporters of the merger - are griping in the press about management returning to its old practices of mistreating employees while providing customers with substandard product.
It's a recipe for disaster in any business, but a telltale sign in the airline industry that the good times are about to come to a crashing halt.
As Richard Branson once said, "If you want to be a millionaire, start with a billion dollars and launch a new airline." American Airlines might not be a startup, but the same rule applies. When airlines hit the skids, it gets ugly fast.
Stocks That Could Derail Your Retirement:Aeropostale Inc (ARO)
Source: Mike Mozart via Flickr
Teen retailer Aeropostale Inc ( ARO ) currently sits on death's doorstep, having delivered another losing quarter March 17 with no end to the misery in sight. Three years of straight losses will test any business but especially one in a segment that's expected to face more pain than gain in the coming months.
Bankruptcy for Aeropostale is a real possibility.
ARO did announce that it's exploring strategic alternatives such as selling itself to the highest bidder, although even that seems farfetched given how much money it owes Sycamore Partners , the private equity firm that lent it $150 million in 2014 so that it could stay afloat.
10 Shaky Stocks That Could Fall 10% or More
If you're tempted by the 20-cent stock price, don't be. There is no silver lining on this one. Buy a lottery ticket instead.
Stocks That Could Derail Your Retirement:BlackBerry Ltd (BBRY)
Source: WEi WEi via Flickr
BlackBerry Ltd ( BBRY ) is another cheap stock to tempt the gamblers among us.
This one's not quite as easy to scare people away from, because BlackBerry does have some redeeming qualities. But I wouldn't say there are enough of them for you to start planning an around the world retirement cruise using profits from BBRY stock.
Blessed with a ton of cash and transitioning to a software-based business from that of a handset maker, many investors are betting that CEO John Chen will make the turnaround work either by delivering increased free cash flow through higher-margin software products, better traction with Android-powered phones such as the Priv, or selling itself to a bigger, more stable competitor.
Hey, all of those could happen … but that isn't the same as they will happen , and those closest to retirement should be especially mindful of the most important rule of investing: preservation of capital.
If BBRY doesn't do any of the things I mentioned, you can bet it will remain a sub-$10 stock.
Stocks That Could Derail Your Retirement:Blue Buffalo Pet Products Inc (BUFF)
Source: Howard Young via Flickr
It's hard to balance the fact Blue Buffalo Pet Products Inc ( BUFF ) is one of the fastest growing pet food companies in the U.S. whose adjusted EBITDA has grown by 400% in the past four years with the reality that the maker of "healthy" pet food recently made a $32 million settlement of a class action lawsuit that claimed it used byproducts in its food despite advertising to the contrary.
Which of the two statements is the true Blue Buffalo?
BUFF claims a former ingredient supplier and a food broker are to blame for the entire problem and that customers can count on them for only "the finest natural ingredients." However, despite its adamant denials of any wrongdoing, Purina is continuing its false advertising lawsuit against Blue Buffalo. Clearly, Purina's not convinced this was an isolated incident.
Since the announcement on Dec. 14, 2015, BUFF stock is up almost 40%, most of it on the back of its March 8 earnings report. It went public last July at $20 and since then is up about 20% with momentum on its side.
10 Sickly Stocks You Need to Thin From the Herd
While tempting, remember the phrase "once bitten, twice shy." This isn't a stock you should use to fund your retirement, because where there's smoke there's often fire.
Stocks That Could Derail Your Retirement:Kate Spade & Co (KATE)
Source: Jules Perry via Flickr
Retailer Kate Spade & Co ( KATE ) announced Q4 earnings in early March that missed the mark on several fronts. Analysts expected adjusted earnings per share of 33 cents; it delivered 32 cents. Analysts expected $444 million in revenue in Q4; Kate delivered $429 million.
Neither, however, should be considered a big deal.
What is a big deal is that the company can't seem to generate enough profits on an annual basis - net income of $17.1 million in 2015 on $1.24 billion in revenue - and if you're going to put your retirement nest egg in the hands of this very popular brand, you need to have some certainty long-term that it can deliver the goods when it comes to profits.
Over the past five years, Kate Spade has generated $4.3 billion in revenue. Disappointingly, it has generated $56 million in operating losses over the same period. Its operating margin in 2015 at 5.4% was its most profitable year yet. That has to count for something.
Well, it might if you're a speculator … but if you're investing for your retirement there just isn't enough good news to warrant owning this stock.
Especially when you can own Coach Inc ( COH ), a competitor with an operating margin almost three times higher.
Stocks That Could Derail Your Retirement:Sears Holdings Corp (SHLD)
Source: Mike Mozart via Flickr
While billionaire investors such as Bruce Fairholme, the second-largest shareholder in the troubled department store, can afford to wait for the eventual winding down of the company and the sale its real estate assets, you can't.
Year-to-date, Sears Holdings Corp ( SHLD ) stock is off 26%. Since 2006, it has seen its market cap shrink from $18.8 billion to less than $2 billion.
This isn't a falling knife you want to get behind, either, because everyone but Eddie Lampert - and heck, maybe including Eddie - knows that its days as a retailer are seriously limited.
In Q4, Sears lost $580 million - $421 million more than in Q4 2014. Lampert's words on the loss:
"But it is unfair to evaluate our approach through the rearview mirror without acknowledging the changing circumstances in our industry as well as our bold attempts to change the way we do business to meet this changing reality."
These words could just have easily been from Q4 2014, 2013 and the many losing years before that.
8 Slick Competitors for the Tesla Model 3
It's a broken record that investors interested in funding retirement should want nothing to do with.
Stocks That Could Derail Your Retirement:Companhia Siderurgica Nacional (SID)
One word. (Well, actually two.) Brazil and steel.
The country itself faces a political mess at the moment that likely will get sorted out at some point but investors, especially those looking for safe, low-volatility type investments, don't need the headaches that a country in turmoil presents.
Nor do you need to be investing in the stocks of businesses on the precipice of bankruptcy. In early February, Forbes discussed the hopeless situation that Companhia Siderurgica Nacional ( SID ) faces in the global steel markets. It's going to have to dump a bunch of its product at a loss, and that has Fitch Ratings suggesting that the steelmaker won't return to its historical EBITDA of $1.2 billion anytime in the near future.
For those building a retirement nest egg, time is money. SID should get none.
Stocks That Could Derail Your Retirement:Twitter Inc ( TWTR )
Source: Andreas Eldh via Flickr
The social media network celebrated its 10th birthday this week, and while Twitter Inc ( TWTR ) has certainly changed the way we receive news, the more pressing question has to be whether it will ever make money.
Tweeting can become addictive and while it might even have been a contributing factor in growing your business or getting promoted at your job, don't think for a second that your insatiable use of this social medium means in any fashion an endorsement of its stock.
This is not "I drink Starbucks, thus I should own its stock". Far from it. Starbucks Corporation ( SBUX ) makes money. Twitter loses money - and lots of it. Since 2010, its operating losses have totaled almost $2 billion.
TWTR stock is not for the faint of heart. In fact, it hasn't come away with a winner in either of its two full years of being public.
10 Best Stocks to Buy and Hold Forever
If you want to build a retirement nest egg, this is the last place you should start.
Stocks That Could Derail Your Retirement:Swift Transportation Co (SWFT)
Source: Paul Sullivan via Flickr
Swift Transportation Co ( SWFT ), one of the country's biggest trucking companies, went public in December 2010 at $11 per share. Its stock is up 67% since the IPO.
That's not bad … until you consider that the S&P 500 is up 84% over the same five-year period.
The company's biggest shareholder is Jerry Moyes, who founded the trucking firm in 1966. Pushed out of the CEO job in October 2005, Moyes took back control of the firm he founded in 2007, then three years later took it public to repay some of Swift's debt. Today, SWFT's long-term debt is about half what it was at the time of the IPO.
Moyes' operation of the business is not where I take issue. For me, it's about his handling of the Phoenix Coyotes NHL hockey team. He put them into bankruptcy in May 2009 and tried to sell them to BlackBerry co-founder Jim Balsillie, and eventually the club was bought out of bankruptcy for $140 million. Financially, the team has never been the same.
Moyes bailed after less than three years involvement with the team and its arena. He has no staying power. The next time Swift gets into trouble, you can bet he's going to cut and run.
Stocks That Could Derail Your Retirement:Staples, Inc. (SPLS)
Source: Mike Mozart via Flickr
Have you been to Staples, Inc. ( SPLS ) lately? If it wasn't for the photocopying machines, I don't think there would be any people left in the stores.
On Monday, Staples and Office Depot made the case to the Federal Trade Commission that they should be allowed to merge because otherwise Amazon.com, Inc. ( AMZN ) would put them through the meat grinder with nothing coming out the end but two dead carcasses.
However, it's not the retail stores that have the FTC opposing this merger, but rather the implications for Fortune 100 companies that buy products through either of the companies. The FTC lawyers argue that a merged business would control 79% of the Fortune 100 business, prices would be higher for those companies, and more importantly, Amazon is no threat to Staples or Office Depot .
6 Companies That Won't Be Around in 2017
The bottom line: There are thousands of stocks you can invest in to fund your retirement. Do you really want one of them to be Staples, a company that feels its best way to survive is to bully its way into a merger?
Successful or not, I sure don't.
As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.
The post 10 Stocks That Could Derail Your Retirement 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.
|
Stocks That Could Derail Your Retirement: American Airlines Group Inc (AAL) Source: Oliver Holzbauer via Flickr Airline stocks have been on a tear for several years now. American Airlines Group Inc ( AAL ), which began trading in late December 2013 after merging with US Airways, had a strong showing in 2014, more than doubling its stock price before it gave back some of those gains in 2015. However, AAL is at a crossroad, and I don't think it's going to end well.
|
Stocks That Could Derail Your Retirement: American Airlines Group Inc (AAL) Source: Oliver Holzbauer via Flickr Airline stocks have been on a tear for several years now. American Airlines Group Inc ( AAL ), which began trading in late December 2013 after merging with US Airways, had a strong showing in 2014, more than doubling its stock price before it gave back some of those gains in 2015. However, AAL is at a crossroad, and I don't think it's going to end well.
|
Stocks That Could Derail Your Retirement: American Airlines Group Inc (AAL) Source: Oliver Holzbauer via Flickr Airline stocks have been on a tear for several years now. American Airlines Group Inc ( AAL ), which began trading in late December 2013 after merging with US Airways, had a strong showing in 2014, more than doubling its stock price before it gave back some of those gains in 2015. However, AAL is at a crossroad, and I don't think it's going to end well.
|
Stocks That Could Derail Your Retirement: American Airlines Group Inc (AAL) Source: Oliver Holzbauer via Flickr Airline stocks have been on a tear for several years now. American Airlines Group Inc ( AAL ), which began trading in late December 2013 after merging with US Airways, had a strong showing in 2014, more than doubling its stock price before it gave back some of those gains in 2015. However, AAL is at a crossroad, and I don't think it's going to end well.
|
8034.0
|
2016-03-22 00:00:00 UTC
|
Airline Stocks: Belgium Bombings Won’t Hold Them Down Forever – DAL AAL AFLYY
|
AAL
|
https://www.nasdaq.com/articles/airline-stocks%3A-belgium-bombings-wont-hold-them-down-forever-dal-aal-aflyy-2016-03-22
|
nan
|
nan
|
InvestorPlaceInvestorPlace - Stock Market News, Stock Advice & Trading Tips
Just when it seemed as if domestic airline stocks like Delta Air Lines, Inc. (NYSE: DAL ) and American Airlines Group Inc (NASDAQ: AAL ) as well as foreign carriers like Air France KLM SA (ADR) (OTCMKTS: AFLYY ) were going to take flight again, these stocks were grounded.
Source: Wikipedia
This time, tragedy in Brussels was the cause. Three bombs were detonated in the Belgian city - two at an airport - forcing travelers to rethink or reschedule travel plans, sending airline stocks lower.
Is it a buying opportunity? For that matter, were airline stocks like AAL and DAL, or even AFLYY, a buy before Tuesday's attacks?
7 Consumer Discretionary Powerhouses Built to Perform
Actually, yes they were, and they still are.
Belgium Bombs Shock Markets
Not a great deal is known yet about the bombing in Brussels, but we do know two explosions were heard at the Zaventem airport , and one bomb was detonated at the Maalbeel Metro station. A total of 34 lives were taken, so far. More may be added to the figure.
Islamic jihadis have announced they are responsible for the coordinated attacks, which came just days after suspected terrorist Salah Abdeslam - likely involved in similar bombings in Paris, France on Nov. 13, 2015 - was arrested in Belgium .
The response so far has been, for better or worse, a familiar one. Flights to and from Belgium were suspended indefinitely while investigators piece together what happened. Brussels' subway system was also stopped.
The Zaventem airport's cancelled flights have created a ripple effect, forcing most airlines to reroute or cancel flights to or from the area.
The bigger toll taken, of course, is on the confidence of people all over the world. Terror groups have once again reminded the world that no one and no place is truly safe, and that lives are particularly vulnerable at key transportation hubs so important to most individuals.
With travelers (would-be or actual) now forced to rethink the importance of traveling - and taking a risk to do so - airline stocks are made victims as well. American Airlines shares were lower by more than 2% on Tuesday. Delta shares fell 3% or more at points. Air France KLM, which is much closer to Belgium, was down more than 4%, as an adverse impact on business is almost inevitable.
Airline Stocks Tend to Be Resilient
The knee-jerk response from investors is understandably a bearish one. With yet another round of terrorism creating a distaste for travel in addition to the heightened security measure that will ensue, it only makes sense that airline stocks will face a headwind.
Yet, there's no empirical evidence that such attacks actually take a long-term, measurable toll on air travel, or airlines' results.
For better or worse, terrorist bombings and equally alarming natural disasters have become the norm, and individuals have become mostly numb to them … at least in terms of travel.
The chart of the NYSE Airlines Index below tells the tale; these are just the major attacks and incidents that could have directly affected travel in Europe and the United States.
Click to Enlarge
None of the attacks that theoretically should have had a lasting adverse impact on these stocks had such an impact.
The ebb and flow - mostly a bullish ebb and flow - tends to be dictated by economic strength and the price of oil. Crude prices that linger at exceedingly high levels tend to work against airlines, imposing high operating costs.
Yet, counterintuitively, sometimes exceedingly low oil prices can also work against airline stocks, as consumers eventually demand air carriers to drop fares to cutthroat (and sometimes thinly profitable) levels in an effort to compete with the no-frills airlines that are now able to charge rock-bottom deals too good to pass up.
The recent moderation of oil prices pushes airlines' operating costs and marketable fares back into "Goldilocks" territory.
Bottom Line
Tragic as the Belgium bombings are, the fact of the matter is, they likely won't prove to be a lasting drag on air travel. Not only are travelers used to such news, but governments and airport security teams are accustomed to ramped-up security measures and are getting better and better at preventing problems before they materialize and cost lives. In a month, this week's bombings will be a fading memory for most, and airline stocks will be back in their proverbial sweet spot.
So today may be a buying opportunity for investors who believe the global economy remains in growth mode.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
More From InvestorPlace
10 Cinderella Stocks to Buy for 2016Alibaba Group Holding (BABA) Stock Is a Buy, But Not Because of Virtual Shopping PlansThe 10 Best Funds for Your 401k
The post Airline Stocks: Belgium Bombings Won't Hold Them Down Forever - DAL AAL AFLYY 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.
|
InvestorPlaceInvestorPlace - Stock Market News, Stock Advice & Trading Tips Just when it seemed as if domestic airline stocks like Delta Air Lines, Inc. (NYSE: DAL ) and American Airlines Group Inc (NASDAQ: AAL ) as well as foreign carriers like Air France KLM SA (ADR) (OTCMKTS: AFLYY ) were going to take flight again, these stocks were grounded. For that matter, were airline stocks like AAL and DAL, or even AFLYY, a buy before Tuesday's attacks? Belgium Bombs Shock Markets Not a great deal is known yet about the bombing in Brussels, but we do know two explosions were heard at the Zaventem airport , and one bomb was detonated at the Maalbeel Metro station.
|
InvestorPlaceInvestorPlace - Stock Market News, Stock Advice & Trading Tips Just when it seemed as if domestic airline stocks like Delta Air Lines, Inc. (NYSE: DAL ) and American Airlines Group Inc (NASDAQ: AAL ) as well as foreign carriers like Air France KLM SA (ADR) (OTCMKTS: AFLYY ) were going to take flight again, these stocks were grounded. More From InvestorPlace 10 Cinderella Stocks to Buy for 2016Alibaba Group Holding (BABA) Stock Is a Buy, But Not Because of Virtual Shopping PlansThe 10 Best Funds for Your 401k The post Airline Stocks: Belgium Bombings Won't Hold Them Down Forever - DAL AAL AFLYY appeared first on InvestorPlace . For that matter, were airline stocks like AAL and DAL, or even AFLYY, a buy before Tuesday's attacks?
|
InvestorPlaceInvestorPlace - Stock Market News, Stock Advice & Trading Tips Just when it seemed as if domestic airline stocks like Delta Air Lines, Inc. (NYSE: DAL ) and American Airlines Group Inc (NASDAQ: AAL ) as well as foreign carriers like Air France KLM SA (ADR) (OTCMKTS: AFLYY ) were going to take flight again, these stocks were grounded. More From InvestorPlace 10 Cinderella Stocks to Buy for 2016Alibaba Group Holding (BABA) Stock Is a Buy, But Not Because of Virtual Shopping PlansThe 10 Best Funds for Your 401k The post Airline Stocks: Belgium Bombings Won't Hold Them Down Forever - DAL AAL AFLYY appeared first on InvestorPlace . For that matter, were airline stocks like AAL and DAL, or even AFLYY, a buy before Tuesday's attacks?
|
InvestorPlaceInvestorPlace - Stock Market News, Stock Advice & Trading Tips Just when it seemed as if domestic airline stocks like Delta Air Lines, Inc. (NYSE: DAL ) and American Airlines Group Inc (NASDAQ: AAL ) as well as foreign carriers like Air France KLM SA (ADR) (OTCMKTS: AFLYY ) were going to take flight again, these stocks were grounded. More From InvestorPlace 10 Cinderella Stocks to Buy for 2016Alibaba Group Holding (BABA) Stock Is a Buy, But Not Because of Virtual Shopping PlansThe 10 Best Funds for Your 401k The post Airline Stocks: Belgium Bombings Won't Hold Them Down Forever - DAL AAL AFLYY appeared first on InvestorPlace . For that matter, were airline stocks like AAL and DAL, or even AFLYY, a buy before Tuesday's attacks?
|
8035.0
|
2016-03-21 00:00:00 UTC
|
How Will American Airlines' Equity Value Move, If Crude Oil Prices Rebound To $100 Per Barrel By 2018?
|
AAL
|
https://www.nasdaq.com/articles/how-will-american-airlines-equity-value-move-if-crude-oil-prices-rebound-100-barrel-2018
|
nan
|
nan
|
Jet fuel costs account for one-third of an airline's total operating expenses . Due to the steep fall in crude oil prices over the last 20 months, the fuel expense of airlines throughout the globe has been reduced significantly, resulting in a notable jump in their earnings. In our base case , we anticipate crude oil prices to recover steadily to $70 per barrel by 2018 . However, in case oil prices recover sooner than expected, and average $100 per barrel in 2018 , then we expect a 50% downside to our base case price estimate for American Airlines.
Have more questions about American Airlines ( AAL )? See the following links:
Why Are American Airlines' Domestic Operations More Valuable Than Its International Operations?
How Will American Airlines' Equity Value Move, If Crude Oil Prices Average $50 Per Barrel In 2018?
How Did American Airlines' Revenue And EBITDA Grow Over The Last Five Years?
How Did American Airlines Use Its Increased Cash Flows In 2015?
How Will American Airlines' Revenue And EBITDA Grow Over The Next Five Years?
What Is American Airlines' Fundamental Value Based On 2016 Estimated Numbers?
How Has The Oil Slump Impacted American Airlines' Operating Margins?
How Has American Airlines' Revenue And EBITDA Composition Changes Over The Last Five Years?
What Is American Airlines' Revenue And EBITDA Breakdown?
US Airlines: A Comparison Of Operating Margins
US Airlines: A Comparison Of Dividend Yields
Is American Airlines Better-Off Post Merger Or Is It Merely Flying On The Oil Price Slump?
Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for American Airlines
View Interactive Institutional Research (Powered by Trefis):
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap
More Trefis Research
Join our WEBINAR"3 Keys for Better Forecasts"March 23, 2016 to find out how to develop better, more accurate business plans and forecasts.
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.
|
Have more questions about American Airlines ( AAL )? Due to the steep fall in crude oil prices over the last 20 months, the fuel expense of airlines throughout the globe has been reduced significantly, resulting in a notable jump in their earnings. How Will American Airlines' Equity Value Move, If Crude Oil Prices Average $50 Per Barrel In 2018?
|
Have more questions about American Airlines ( AAL )? However, in case oil prices recover sooner than expected, and average $100 per barrel in 2018 , then we expect a 50% downside to our base case price estimate for American Airlines. How Has The Oil Slump Impacted American Airlines' Operating Margins?
|
Have more questions about American Airlines ( AAL )? However, in case oil prices recover sooner than expected, and average $100 per barrel in 2018 , then we expect a 50% downside to our base case price estimate for American Airlines. US Airlines: A Comparison Of Operating Margins US Airlines: A Comparison Of Dividend Yields Is American Airlines Better-Off Post Merger Or Is It Merely Flying On The Oil Price Slump?
|
Have more questions about American Airlines ( AAL )? In our base case , we anticipate crude oil prices to recover steadily to $70 per barrel by 2018 . We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com 2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively.
|
8036.0
|
2016-03-19 00:00:00 UTC
|
Can US Airlines Industry Continue on Path of Growth?
|
AAL
|
https://www.nasdaq.com/articles/can-us-airlines-industry-continue-path-growth-2016-03-19
|
nan
|
nan
|
Many U.S. residents are traveling to other parts of the world, and they use airlines to get where they're going.
The U.S. airlines industry is flying high with profits still increasing. Profits are on the increase for a number of reasons such as low fuel prices, increasing numbers of people traveling daily, solid investment strategy and strong management application.
Since the drop in fuel prices started some time ago, the U.S. airline industry has been seeing an increase in profits. Recently, Euroconsult reported that it is expecting airline revenues to skyrocket. In 2015, the industry made approximately $700 million, and the industry is expected to earn $5.4 billion by 2016.
The number of expected U.S. spring travelers might rise this year by 2.8%, and the expectation is that over 140 million Americans will take to the sky. Airlines for America is touting that the growth of the industry will happen mainly because of affordable fares and additional flights taking off on the runway. It went on to explain that between March and April, about 2.3 million people are expected to travel within the U.S. during that time. For those two months, an increase in the region from 136.2 million will occur, and this amount can be the equivalent of about 2.2 million people who travel on a daily basis. Of the 136.2 million who travel regularly, 17 million of them travel to international destinations.
The travel boom is attracting a number of people to work in the industry. Although some airlines are short of pilots, others are boasting of great staff turnout. In the meantime, applications are turning up at the airline companies from people who want to become flight attendants .
Airlines of America's chief economist John Heimlich said "The continued growth in passenger volumes can be attributed to the accessibility and affordability of air travel today." He went on to add, "To meet the extra demand, airlines are deploying new and larger aircrafts on many flights."
Since February, American Airlines Group ( AAL ) reported that shares went down further. Shares ended up trading at 6.4x forward earnings and triggered a large enough buyback. At this time, the market remains bullish; however, investors are still on the watch for further growth.
The growth of Spirit Airlines ( SAVE ) has been phenomenal and is showing a solid stock increase. As a low cost airline, Spirit has made some headway in winning passengers from the bigger airlines mainly because of the low airfares and low fuel cost.
In 2014, air carriers ended up paying about $2.32 for one gallon of jet fuel. However, a decline took place in 2015 and they paid only $1.46. For smaller airlines like Spirit, the low fuel cost was passed down to their passengers. In addition, recently the company reported that they are seriously considering lowering fares even lower so that passengers flying with them can benefit further. Furthermore, there is a drive to locate and start additional routes, which would also result in gaining a bigger share of
TWTR 15-Year Financial Data
The intrinsic value of TWTR
Peter Lynch Chart of TWTR
Warning! GuruFocus has detected 4 Warning Signs with GSK. Click here to check it out.
GSK 15-Year Financial Data
The intrinsic value of GSK
Peter Lynch Chart of GSK
Warning! GuruFocus has detected 4 Warning Sign with NUAN. Click here to check it out.
NUAN 15-Year Financial Data
The intrinsic value of NUAN
Peter Lynch Chart of NUAN
Warning! GuruFocus has detected 3 Warning Sign with AAL. Click here to check it out.
AAL 15-Year Financial Data
The intrinsic value of AAL
Peter Lynch Chart of AAL
Read More:
Note of portfolio 53107
Note of portfolio 53283
Note of portfolio 53280
Note of portfolio 53219
About GuruFocus: GuruFocus.com tracks the stocks picks and portfolio holdings of the world's best investors. This value investing site offers stock screeners and valuation tools. And publishes daily articles tracking the latest moves of the world's best investors. GuruFocus also provides promising stock ideas in 3 monthly newsletters sent to 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.
|
Since February, American Airlines Group ( AAL ) reported that shares went down further. GuruFocus has detected 3 Warning Sign with AAL. AAL 15-Year Financial Data The intrinsic value of AAL Peter Lynch Chart of AAL Read More: Note of portfolio 53107 Note of portfolio 53283 Note of portfolio 53280 Note of portfolio 53219 About GuruFocus: GuruFocus.com tracks the stocks picks and portfolio holdings of the world's best investors.
|
AAL 15-Year Financial Data The intrinsic value of AAL Peter Lynch Chart of AAL Read More: Note of portfolio 53107 Note of portfolio 53283 Note of portfolio 53280 Note of portfolio 53219 About GuruFocus: GuruFocus.com tracks the stocks picks and portfolio holdings of the world's best investors. Since February, American Airlines Group ( AAL ) reported that shares went down further. GuruFocus has detected 3 Warning Sign with AAL.
|
AAL 15-Year Financial Data The intrinsic value of AAL Peter Lynch Chart of AAL Read More: Note of portfolio 53107 Note of portfolio 53283 Note of portfolio 53280 Note of portfolio 53219 About GuruFocus: GuruFocus.com tracks the stocks picks and portfolio holdings of the world's best investors. Since February, American Airlines Group ( AAL ) reported that shares went down further. GuruFocus has detected 3 Warning Sign with AAL.
|
Since February, American Airlines Group ( AAL ) reported that shares went down further. GuruFocus has detected 3 Warning Sign with AAL. AAL 15-Year Financial Data The intrinsic value of AAL Peter Lynch Chart of AAL Read More: Note of portfolio 53107 Note of portfolio 53283 Note of portfolio 53280 Note of portfolio 53219 About GuruFocus: GuruFocus.com tracks the stocks picks and portfolio holdings of the world's best investors.
|
8037.0
|
2016-03-19 00:00:00 UTC
|
Surprise! Lower Airline Fees Would Be Bad for Customers
|
AAL
|
https://www.nasdaq.com/articles/surprise-lower-airline-fees-would-be-bad-customers-2016-03-19
|
nan
|
nan
|
Earlier this month, Senator Richard Blumenthal of Connecticut and Senator Ed Markey of Massachusetts introduced the cleverly named "Forbidding Airlines from Imposing Ridiculous (FAIR) Fees Act." This proposed legislation would essentially regulate airline fees to ensure that each fee is commensurate with the cost of whatever service it covers.
The senators lament that airlines -- led by American Airlines , Delta Air Lines , and United Continental -- have introduced or increased numerous fees since 2009. Indeed, U.S. airlines made $6.5 billion just from baggage and change fees in 2014 (the most recent full year for which data are available).
Airline fees have risen precipitously in the past few years. Photo: American Airlines
On the surface, the FAIR Fees Act seems to be a piece of consumer-friendly legislation. Not surprisingly, numerous consumer groups have expressed their support for this bill. However, regulating airline fees would not be good for most travelers in the long run.
The bill in a nutshell
The FAIR Fees Act would "prohibit airlines from imposing fees, including cancellation, change and bag fees, that are not reasonable and proportional to the costs of the [services] provided."
For example, Sens. Blumenthal and Markey note that American, Delta, and United charge more for a second checked bag than for the first checked bag. Since there is no difference in cost to the airline, the FAIR Fees Act would ban this type of pricing policy. The senators also note that many airlines impose $200 domestic change fees even though the average revenue loss from a ticket change or cancellation is much lower.
The bill calls for the DOT to establish standards for determining whether a particular fee is "reasonable and proportional to the costs." It would then use these standards to enforce the ban on unreasonable fees.
Bad consequence No. 1: less transparency
While Sens. Blumenthal and Markey may be trying to protect consumers, the FAIR Fees Act would make things even worse for most travelers.
First, tying airline fees directly to costs could lead to less transparency for customers. Today, airlines may have high fees for certain services, but they are usually standard fees that are disclosed on the carrier's website.
If airlines have to justify each fee, they will presumably charge passengers who "cost more" a higher price. For example, the cost to an airline of checking a bag depends on its weight, its dimensions, whether you reserve a spot for the bag in advance, and how much help you need to check your bag in at the airport. If bag fees vary depending on all of those criteria, it would be a lot harder to figure out in advance how much checking a bag would cost.
Bad consequence No. 2: rising compliance costs
Calculating the cost attached to an airline fee is not always straightforward. Take seat assignment fees, for example. What's the cost of allowing customers to choose their seats for free? It might seem like there's no cost at all.
However, what if a business traveler who's willing to pay $500 for a last minute ticket looks at the seating map and finds that there are only middle seats left? If another airline has better seats available because it imposed a seat-selection fee, the first airline would lose out on a lucrative $500 fare. That's a very real cost of allowing everyone to select seats for free.
The FAIR Fees Act would force airlines to quantify costs like this to prove that their fees are reasonable. The cost of doing so could become a significant burden, especially for smaller airlines. And high compliance costs would undoubtedly get passed along to passengers, one way or another.
Bad consequence No. 3: service cuts
The three big carriers that Sens. Markey and Blumenthal singled out -- American Airlines, Delta Air Lines, and United Continental -- have all reported declining unit revenue over the past year. Indeed, airline ticket prices have fallen dramatically in many markets: a fact that advocates of the FAIR Fees Act have conveniently ignored.
Big airlines like United Continental wish the airline industry was as uncompetitive as consumer advocates seem to think. Photo: The Motley Fool
Ancillary fees represent one of the few steady sources of revenue for airlines in this environment. If fee revenue is undercut by new legislation, airlines will have to cut flights to the point where they can start raising ticket prices again. Otherwise, they won't be able to earn enough money to cover their cost of capital, particularly in down years.
Consumer advocates may yearn for the days when it was cheaper to fly -- but it was only cheaper because airlines weren't covering their costs. That wasn't a sustainable solution. In the long run, forcing fees down will leave travelers with fewer flight choices and higher base fares.
Bad consequence No. 4: less competition
Finally -- and most importantly -- regulating airline fees would hurt competition. In the past year or two, the growth of ultra-low cost carriers like Spirit Airlines and Frontier Airlines has helped keep airfares low. These carriers rely on charging high fees to make up for their extremely low base fares. (Spirit Airlines' average fare was less than $60 last quarter.)
Forcing Spirit, Frontier, and other ULCCs to cut their fees would blow up their business model. At best, this would cause them to raise their base fares and significantly cut back their growth plans. Without the threat of being undercut by Spirit or Frontier, airlines like American, Delta, and United would have that much more freedom to raise their own prices.
Transparency is good -- price-setting, not so much
Not surprisingly, airline industry trade association Airlines for America opposes the FAIR Fees Act. The group noted that the government used to regulate airfares, and when it did, fares were much higher (adjusted for inflation) than they are today.
While many travelers complain about the rise in airline fees in recent years, this "unbundling" of airfares -- particularly when pushed to the extreme by Spirit Airlines -- has opened air travel to millions of people who could not afford to fly otherwise.
High fees allow airlines like Spirit to offer rock-bottom fares. Photo: Spirit Airlines
This isn't to say that all regulation is bad. In early 2012, the DOT implemented a rule requiring airlines to include all mandatory taxes and fees in their advertised ticket prices. This rule made it easier for consumers to see what they would actually have to pay. The same rule also requires airlines to provide a prominent link on their website to a bag fee disclosure.
Ensuring the transparency of airfares and fees is an important task for regulators. Consumers deserve to know what they're going to pay before buying an airline ticket. However, regulating airline prices -- whether for fares or fees -- is a step too far, and consumers would ultimately pay the price.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article Surprise! Lower Airline Fees Would Be Bad for Customers originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of Spirit Airlines and United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines,, long January 2017 $30 calls on American Airlines Group, and long June 2016 $30 calls on Spirit Airlines. The Motley Fool is long January 2017 $35 calls on American Airlines Group. The Motley Fool recommends Spirit Airlines. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
Indeed, airline ticket prices have fallen dramatically in many markets: a fact that advocates of the FAIR Fees Act have conveniently ignored. If fee revenue is undercut by new legislation, airlines will have to cut flights to the point where they can start raising ticket prices again. In early 2012, the DOT implemented a rule requiring airlines to include all mandatory taxes and fees in their advertised ticket prices.
|
The senators lament that airlines -- led by American Airlines , Delta Air Lines , and United Continental -- have introduced or increased numerous fees since 2009. The bill in a nutshell The FAIR Fees Act would "prohibit airlines from imposing fees, including cancellation, change and bag fees, that are not reasonable and proportional to the costs of the [services] provided." Adam Levine-Weinberg owns shares of Spirit Airlines and United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines,, long January 2017 $30 calls on American Airlines Group, and long June 2016 $30 calls on Spirit Airlines.
|
The bill in a nutshell The FAIR Fees Act would "prohibit airlines from imposing fees, including cancellation, change and bag fees, that are not reasonable and proportional to the costs of the [services] provided." The FAIR Fees Act would force airlines to quantify costs like this to prove that their fees are reasonable. Adam Levine-Weinberg owns shares of Spirit Airlines and United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines,, long January 2017 $30 calls on American Airlines Group, and long June 2016 $30 calls on Spirit Airlines.
|
The bill in a nutshell The FAIR Fees Act would "prohibit airlines from imposing fees, including cancellation, change and bag fees, that are not reasonable and proportional to the costs of the [services] provided." It might seem like there's no cost at all. Photo: Spirit Airlines This isn't to say that all regulation is bad.
|
8038.0
|
2016-03-18 00:00:00 UTC
|
Another Painful Reminder of Microsoft's Bungled Nokia Acquisition
|
AAL
|
https://www.nasdaq.com/articles/another-painful-reminder-microsofts-bungled-nokia-acquisition-2016-03-18
|
nan
|
nan
|
iOS and Android, meanwhile, comprised 15.8% and 81% of the smartphone software market share, respectively. Microsoft's bungled Nokia acquisition represented a last-ditch effort on the part of the Redmond-based software giant to narrow the widening chasm between itself and the two leaders. However, as losing its Here support shows, the acquisition failed to achieve its aims on virtually every front, even in securing a workable mapping platform for Microsoft.
What's more, this is only the latest in a series of major brands that have elected to end support or move away from Microsoft's Windows Phone platform. As was noted by The Verge , companies like American Airlines , Chase , Bank of America , Pinterest, and others have each ceased support for their Windows Phone apps over the course of the past year. Microsoft has already rallied to promise coming improvements to its own mapping apps for Windows Phone. However, it doesn't take much reading between the lines to see which direction the momentum is flowing for Microsoft's mobile products in general.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early, in-the-know investors! To be one of them, just click here .
The article Another Painful Reminder of Microsoft's Bungled Nokia Acquisition originally appeared on Fool.com.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Andrew Tonner owns shares of AAPL and BAC. The Motley Fool owns shares of and recommends GOOG, GOOGL, and AAPL. The Motley Fool has the following options: long January 2017 $35 calls on AAL. The Motley Fool recommends BAC and BAMXF. Try any of our Foolish newsletter services free for 30 days .We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
The Motley Fool has the following options: long January 2017 $35 calls on AAL. Microsoft's bungled Nokia acquisition represented a last-ditch effort on the part of the Redmond-based software giant to narrow the widening chasm between itself and the two leaders. However, as losing its Here support shows, the acquisition failed to achieve its aims on virtually every front, even in securing a workable mapping platform for Microsoft.
|
The Motley Fool has the following options: long January 2017 $35 calls on AAL. Microsoft's bungled Nokia acquisition represented a last-ditch effort on the part of the Redmond-based software giant to narrow the widening chasm between itself and the two leaders. What's more, this is only the latest in a series of major brands that have elected to end support or move away from Microsoft's Windows Phone platform.
|
The Motley Fool has the following options: long January 2017 $35 calls on AAL. A secret billion-dollar stock opportunity The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. The Motley Fool owns shares of and recommends GOOG, GOOGL, and AAPL.
|
The Motley Fool has a disclosure policy . The Motley Fool has the following options: long January 2017 $35 calls on AAL. The Motley Fool recommends BAC and BAMXF.
|
8039.0
|
2016-03-18 00:00:00 UTC
|
PRIMECAP Adds to Stake in Alibaba
|
AAL
|
https://www.nasdaq.com/articles/primecap-adds-stake-alibaba-2016-03-18
|
nan
|
nan
|
Most of PRIMECAP Management ( Trades , Portfolio )'s fourth-quarter activity involved adding to or reducing existing stakes in its portfolio. The guru did buy a couple of new stakes and sold three others, but they had little impact on the portfolio.
PRIMECAP raised its stake in Alibaba ( BABA ), a Chinese ecommerce company, by more than 36%. PRIMECAP acquired 3,612,400 shares for an average price of $78.9 per share in a transaction that had a 0.3% impact on PRIMECAP's portfolio.
The stake, now 13,541,805 shares, is 0.54% of Alibaba's outstanding shares and 1.13% of PRIMECAP's total assets. Frank Sands ( Trades , Portfolio ) is Alibaba's leading shareholder among the gurus with a stake of 23,074,907 shares. The stake is 0.92% of Alibaba's outstanding shares and 4.83% of Sands' total assets.
Alibaba has a P/E of 17.4, a forward P/E of 21.2, a P/B of 5.7 and a P/S of 13.1. GuruFocus gives Alibaba a Financial Strength rating of 6/10 and a Profitability and Growth rating of 6/10.
PRIMECAP hiked its stake in JPMorgan Chase & Co. ( JPM ), a New York-based banking and financial services company, by nearly 32%. PRIMECAP purchased 3,430,930 shares for an average price of $65.22 per share. The deal had a 0.23% impact on PRIMECAP's portfolio.
The stake, now 14,300,031 shares, is 0.39% of JPMorgan Chase's outstanding shares and 0.97% of PRIMECAP's total assets. Barrow, Hanley, Mewhinney & Strauss is JPMorgan Chase's leading shareholder among the gurus with a stake of 31,244,912 shares. The stake is 0.85% of JPMorgan Chase's outstanding shares and 3.07% of the guru's total assets.
PRIMECAP increased its stake in KLA-Tencor Corp. ( KLAC ), a semiconductor equipment and materials company based in Milptas, California, by almost 30%. PRIMECAP bought 2,800,897 shares for an average price of $64.32 per share. The transaction had a 0.2% impact on PRIMECAP's portfolio.
The stake, now 12,235,143 shares, is 7.86% of KLA-Tencor's outstanding shares and 0.87% of PRIMECAP's total assets. PRIMECAP is KLA-Tencor's leading shareholder among the gurus.
KLA-Tencor has a P/E of 21.2, a forward P/E of 18.1, a P/B of 29.9 and a P/S of 3.9. GuruFocus gives KLA-Tencor a Financial Strength rating of 7/10 and a Profitability and Growth rating of 8/10.
PRIMECAP boosted its stake in HP Inc. ( HPQ ), the Palo Alto, California-based successor to Hewlett-Packard, by more than 31%. PRIMECAP purchased 13,582,480 shares for an average price of $12.8 per share. The deal had a 0.16% impact on PRIMECAP's portfolio.
The stake, now 57,085,165 shares, is 3.29% of HP's outstanding shares and 0.69% of PRIMECAP's total assets. HP's leading shareholder among the gurus is Dodge & Cox with a stake of 199,738,878 shares. The stake is 11.5% of HP's outstanding shares and 2.32% of Dodge & Cox's total assets.
HP has a P/E of 5.7, a forward P/E of 7 and a P/S of 0.2. GuruFocus gives HP a
About GuruFocus: GuruFocus.com tracks the stocks picks and portfolio holdings of the world's best investors. This value investing site offers stock screeners and valuation tools. And publishes daily articles tracking the latest moves of the world's best investors. GuruFocus also provides promising stock ideas in 3 monthly newsletters sent to 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.
|
PRIMECAP hiked its stake in JPMorgan Chase & Co. ( JPM ), a New York-based banking and financial services company, by nearly 32%. Barrow, Hanley, Mewhinney & Strauss is JPMorgan Chase's leading shareholder among the gurus with a stake of 31,244,912 shares. PRIMECAP increased its stake in KLA-Tencor Corp. ( KLAC ), a semiconductor equipment and materials company based in Milptas, California, by almost 30%.
|
Frank Sands ( Trades , Portfolio ) is Alibaba's leading shareholder among the gurus with a stake of 23,074,907 shares. The stake, now 14,300,031 shares, is 0.39% of JPMorgan Chase's outstanding shares and 0.97% of PRIMECAP's total assets. The stake is 11.5% of HP's outstanding shares and 2.32% of Dodge & Cox's total assets.
|
The stake, now 13,541,805 shares, is 0.54% of Alibaba's outstanding shares and 1.13% of PRIMECAP's total assets. The stake, now 12,235,143 shares, is 7.86% of KLA-Tencor's outstanding shares and 0.87% of PRIMECAP's total assets. The stake, now 57,085,165 shares, is 3.29% of HP's outstanding shares and 0.69% of PRIMECAP's total assets.
|
The stake, now 12,235,143 shares, is 7.86% of KLA-Tencor's outstanding shares and 0.87% of PRIMECAP's total assets. The stake, now 57,085,165 shares, is 3.29% of HP's outstanding shares and 0.69% of PRIMECAP's total assets. GuruFocus gives HP a About GuruFocus: GuruFocus.com tracks the stocks picks and portfolio holdings of the world's best investors.
|
8040.0
|
2016-03-16 00:00:00 UTC
|
Hawaiian Airlines Flying The Friendly Pacific Rim Skies
|
AAL
|
https://www.nasdaq.com/articles/hawaiian-airlines-flying-friendly-pacific-rim-skies-2016-03-16
|
nan
|
nan
|
Most airlines court business customers -- or more accurately their business expense accounts -- but Hawaiian Airlines is finding success catering primarily to vacationers in the U.S., Asia and elsewhere in the Pacific Rim.
Mai Tais and pupus, truly friendly skies and an on-time record that's the envy of the industry: these are the competitive advantages of the airline and its parent, Hawaiian Holdings ( HA ). Its unique model focuses sharply on bringing an island-like experience to its patrons.
"It really caters to the leisure customer," CRT Capital analyst Michael Derchin told IBD. "Maybe 1% of their market is business."
Derchin, who has a buy rating on Hawaiian, says he initiated coverage with a buy rating back in February 2014, when the stock was trading around 11. Now it's approaching 50.
"It's been a grand slam home run," he said.
Hawaiian, which expanded into Australia in 2004 and began daily service to Tokyo's Haneda airport in 2010, has been growing its long-haul business. This year, it will begin service to Tokyo's Narita airport. Hawaiian says it flew a record 10.7 million passengers in 2015, a 4.7% increase from 2014.
"The allure of Hawaii is really pretty universal," Hawaiian Chief Commercial Officer Peter Ingram told IBD. As the middle class grows in Korea and China, the airline expects to fly more Asian tourists to Hawaii, he said.
Branching Out
Ingram notes that Japan has always had a big presence in Hawaii and that tourism from Japan is rising with the strengthening yen. The airline currently flies from Hawaii to Australia, New Zealand, American Samoa, Tahiti, Japan, South Korea and China.
He also said that Hawaiian offers service to smaller cities on the Pacific Rim, such as Auckland in New Zealand, Brisbane in Australia, and Japan's Sapporo, that "don't register on the map of the big carriers." Though, after Hawaiian began service to Auckland, American Airlines ( AAL ) started flying there too, says Ingram.
And of course, the airline outpaces everyone on inter-island flights within the Hawaiian chain, with about 160 daily departures.
"We understand travel to Hawaii better than anyone. We're prepared to take on any competitor who enters the market," said Ingram.
All of the big three U.S. carriers, American, United Airlines ( UAL ) and Delta Air Lines ( DAL ) compete with Hawaiian for the mainland-to-Hawaii business. Alaska Airlines ( ALK ) and Virgin America (VA) also offer flights. And Japanese carrier All Nippon Airways also flies to Hawaii from Japan.
Additionally, wags have predicted for years that Southwest Airlines (LUV) would enter the Hawaii market. But it won't happen this year, says Helane Becker, an analyst with Cowen & Co., who spoke with IBD.
"Southwest doesn't have any aircraft with extended over-water operations certification," she said. "It would take about a year to get ... certified from the FAA on the existing fleet. And we would know if they applied for it. … They haven't, so we don't view Southwest as a short-term threat."
Becker rates Hawaiian at market perform. She says the stock is at a high valuation, but adds, "They're a very strong competitor on the West Coast, and they've been growing aggressively."
On-Time Arrivals
For each of the past 12 years, Hawaiian has led U.S. carriers in on-time performance, according the U.S. Department of Transportation. And the airline is noted for its top-notch service; it even still serves food, included in the fare on mainland-to-Hawaii flights.
It's also adding luxury to its liners. In October 2015, Hawaiian said it will put lie-flat seating in its Airbus (EADSY) A330 premium cabins.
"Those airplanes do all our long-haul flying outside Hawaii," said Ingram. Hawaiian's customers are couples or families, he said. And unlike business travelers, they don't necessarily want isolation.
"We've worked to custom design" the seats to accommodate our customers, he said. "We will have planes with these seats in the second or third quarter of this year."
Ingram says the majority of Hawaiian's A330s will be retrofitted by the end of 2017.
The airline is also adding the A321 NEO to its fleet this year -- a single-aisle, smaller long-haul aircraft. It will enable Hawaiian to fly more cost-effectively from smaller locations on the West Coast of North America to Hawaii, said Ingram.
The airline's net income for its fourth quarter, ended Dec. 31, more than tripled to $37.9 million from $11.1 million in the year-earlier period. Similarly, diluted earnings per share rocketed up to 66 cents from 17 cents in the year-earlier quarter.
Yet, total revenue declined slightly in the fourth quarter to $574.2 million from $574.8 million. For the full year, total revenue grew a bit to $2.32 billion from $2.31 billion. The company's revenue took a hit from foreign-currency impacts, reduced fuel surcharges (from lower fuel costs) and thus lower total fares, as well as higher capacity from competitors, which put pressure on the fares in North America, Ingram said.
Fueling Profits
So what's fueling the jump in income and earnings on declining revenue? Well, cheap fuel. For the fourth quarter, Hawaiian's aircraft fuel costs dropped 41.4% to $88.4 million from $150.8 million.
Asked if Hawaiian would stockpile or hedge fuel at the current low prices, Ingram demurred: "We do hedge fuel, but we're not speculators."
Zack's puts Hawaiian's first-quarter 2016 earnings at 73 cents a share and full-year 2016 earnings at $4.57 per share. But both Derchin and Becker estimate Hawaiian will earn $5 per share for 2016.
Not long ago, its stock price was at 5. Hawaiian (in business for 87 years) went through its second bankruptcy in 2003-2005, and its stock was still bumping along at a dismal 5 to 6 from 2011 through early 2013, when it finally started climbing. In the past year, the stock has jumped up from a low of 19.66 in mid-March 2015 to 52-week intraday high of 46.98 on Wednesday.
"We're feeling very optimistic about our prospects for 2016," Ingram said. "We're seeing flatter comparisons on foreign exchange, and we're seeing continued strong demand throughout our network."
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.
|
Though, after Hawaiian began service to Auckland, American Airlines ( AAL ) started flying there too, says Ingram. Mai Tais and pupus, truly friendly skies and an on-time record that's the envy of the industry: these are the competitive advantages of the airline and its parent, Hawaiian Holdings ( HA ). He also said that Hawaiian offers service to smaller cities on the Pacific Rim, such as Auckland in New Zealand, Brisbane in Australia, and Japan's Sapporo, that "don't register on the map of the big carriers."
|
Though, after Hawaiian began service to Auckland, American Airlines ( AAL ) started flying there too, says Ingram. He also said that Hawaiian offers service to smaller cities on the Pacific Rim, such as Auckland in New Zealand, Brisbane in Australia, and Japan's Sapporo, that "don't register on the map of the big carriers." For the fourth quarter, Hawaiian's aircraft fuel costs dropped 41.4% to $88.4 million from $150.8 million.
|
Though, after Hawaiian began service to Auckland, American Airlines ( AAL ) started flying there too, says Ingram. Most airlines court business customers -- or more accurately their business expense accounts -- but Hawaiian Airlines is finding success catering primarily to vacationers in the U.S., Asia and elsewhere in the Pacific Rim. For the fourth quarter, Hawaiian's aircraft fuel costs dropped 41.4% to $88.4 million from $150.8 million.
|
Though, after Hawaiian began service to Auckland, American Airlines ( AAL ) started flying there too, says Ingram. "Those airplanes do all our long-haul flying outside Hawaii," said Ingram. Fueling Profits So what's fueling the jump in income and earnings on declining revenue?
|
8041.0
|
2016-03-15 00:00:00 UTC
|
American Airlines and United Continental Expand in the Pacific: Delta Stands Pat
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-and-united-continental-expand-pacific-delta-stands-pat-2016-03-15
|
nan
|
nan
|
There have been a lot of headlines recently about slowing economic growth in China and other Pacific Rim countries whose economies are tightly intertwined with China's. Despite these headwinds, American Airlines and United Continental -- two of the three big U.S. network carriers -- are growing aggressively in the region.
Meanwhile, their rival Delta Air Lines seems to be taking a pause from growth in the transpacific market. Let's take a look at this divergence in strategy and what it means for the top three U.S. airlines.
American Airlines: investing to catch up
Looking back to 2014, American Airlines deployed approximately 10 billion available seat miles (ASMs) in the Pacific region. By contrast, Delta Air Lines had 29 billion ASMs in the Pacific region that year, and United Continental had 40 billion ASMs there.
Most of Delta's cuts have come in Japan, where it is slashing intra-Asia routes from its hub in Tokyo and beach market flights to places like Hawaii and Guam. That's not so different from what United Continental is doing, but unlike United, Delta hasn't been fully offsetting cuts in Japan with growth elsewhere.
After adding flights from Seattle to Shanghai, Seoul, and Hong Kong between June 2013 and June 2014, Delta has slowed its expansion in Asia. It launched a new Los Angeles-Shanghai route last year, but that was about it. This week, it announced plans to begin flying from Los Angeles to Beijing, but that service won't start until December.
Instead, Delta plans to rely on local partners as it grows in Asia. Last year, Delta paid $450 million for a small stake in China Eastern Airlines, one of China's biggest airlines. Rather than flying directly to secondary cities in China, Delta intends to offer more flights to Beijing and Shanghai, where travelers would be able to connect to numerous other destinations on China Eastern.
This strategy reduces Delta's risk and capital requirements relative to wholesale expansion. It leaves United Continental with a clear edge in Asia, but it should keep Delta comfortably ahead of American Airlines in the region. In the meantime, Delta's capacity discipline in Asia should help it post better unit revenue results than its peers in 2016.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early, in-the-know investors! To be one of them, just click here .
The article American Airlines and United Continental Expand in the Pacific: Delta Stands Pat originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
Most of Delta's cuts have come in Japan, where it is slashing intra-Asia routes from its hub in Tokyo and beach market flights to places like Hawaii and Guam. This week, it announced plans to begin flying from Los Angeles to Beijing, but that service won't start until December. The article American Airlines and United Continental Expand in the Pacific: Delta Stands Pat originally appeared on Fool.com.
|
By contrast, Delta Air Lines had 29 billion ASMs in the Pacific region that year, and United Continental had 40 billion ASMs there. Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
Last year, Delta paid $450 million for a small stake in China Eastern Airlines, one of China's biggest airlines. It leaves United Continental with a clear edge in Asia, but it should keep Delta comfortably ahead of American Airlines in the region. Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group.
|
Rather than flying directly to secondary cities in China, Delta intends to offer more flights to Beijing and Shanghai, where travelers would be able to connect to numerous other destinations on China Eastern. It leaves United Continental with a clear edge in Asia, but it should keep Delta comfortably ahead of American Airlines in the region. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
|
8042.0
|
2016-03-15 00:00:00 UTC
|
American Airlines: Cheap Oil Drives Growth amid Headwinds
|
AAL
|
https://www.nasdaq.com/articles/american-airlines%3A-cheap-oil-drives-growth-amid-headwinds-2016-03-15
|
nan
|
nan
|
On March 7, we issued an updated research report on Fort Worth, TX-based American Airlines GroupAAL .
The carrier, like its peers in the airline space, is benefiting from the continuous decline in oil prices . The carrier has an encouraging history with respect to earnings per share, having outshone the Zacks Consensus Estimate in each of the last four quarters on the back of cheap oil.
In the final quarter of 2015, the carrier revealed adjusted earnings per share of $2.0, beating the Zacks Consensus Estimate by 4 cents. Total operating expenses declined 7.9% to $8.6 billion on the back of a 40.8% reduction in fuel costs. Fuel price (on a consolidated basis) for 2016 is projected in the range of $1.20 to $1.25 per gallon. The same is expected in the band of $1.15 to $1.20 in the first quarter. American Airlines, which has stayed away from hedging its fuel costs, expects to generate savings of approximately $2 billion due to weak fuel costs in 2016.
The massive savings generated in the wake of low fuel costs has cushioned the financial health of this Zacks Rank #3 (Hold) stock. This has encouraged the company to make continuous investments to improve the flying experience of its customers. Moreover, the carrier's efforts to reward its shareholders through dividend payments and buybacks are also a direct consequence of its improved financial health. During the fourth quarter, the company returned approximately $1.2 billion to its shareholders through the payment of $72 million in dividends and buybacks worth $1.1 billion. The company returned approximately 3.9 billion to its investors in 2015.
Declining PRASM: A Source of Worry
Despite the benefits, courtesy cheap oil, American Airlines has its own share of worries. The biggest worrying factor is the constant decline in passenger revenue per available seat mile (PRASM: a measure of unit revenue). In the fourth quarter of 2015, consolidated PRASM declined 6% to 12.69 cents. That PRASM-related worries will continue to hurt the carrier was evident from its first quarter forecast where the metric is projected to decline in the band of 6% to 8%, mainly due to adverse foreign currency movements.
Moreover, the outbreak of the Zika virus has caused many carriers, including American Airlines, to offer fliers (particularly pregnant women) refunds or options to reschedule their travel to Zika-affected areas at a latter date. In the event of the outbreak assuming more serious proportions, American Airlines, alongside other carriers, will be severely impacted.
Furthermore, American Airlines, along with three other carriers, is being probed by the Department of Justice on the possibility of unlawful co-ordination to limit the availability of seats, with the objective of keeping airfares high. Apart from the probe, the ongoing dispute with the Gulf carriers is also poses concern.
Airline Stocks Worth Considering
Investors interested in the airline space may consider stocks like Hawaiian Holdings HA , Deutsche Lufthansa Aktiengesellschaft DLAKY and China Eastern Airlines Corp. Ltd. CEA . All the three stocks sport a Zacks Rank #1 (Strong Buy).
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 >>
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
HAWAIIAN HLDGS (HA): Free Stock Analysis Report
CHINA EASTN-ADR (CEA): Free Stock Analysis Report
LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report
AMER AIRLINES (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.
|
On March 7, we issued an updated research report on Fort Worth, TX-based American Airlines GroupAAL . Click to get this free report HAWAIIAN HLDGS (HA): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. That PRASM-related worries will continue to hurt the carrier was evident from its first quarter forecast where the metric is projected to decline in the band of 6% to 8%, mainly due to adverse foreign currency movements.
|
Click to get this free report HAWAIIAN HLDGS (HA): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. On March 7, we issued an updated research report on Fort Worth, TX-based American Airlines GroupAAL . American Airlines, which has stayed away from hedging its fuel costs, expects to generate savings of approximately $2 billion due to weak fuel costs in 2016.
|
Click to get this free report HAWAIIAN HLDGS (HA): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. On March 7, we issued an updated research report on Fort Worth, TX-based American Airlines GroupAAL . American Airlines, which has stayed away from hedging its fuel costs, expects to generate savings of approximately $2 billion due to weak fuel costs in 2016.
|
On March 7, we issued an updated research report on Fort Worth, TX-based American Airlines GroupAAL . Click to get this free report HAWAIIAN HLDGS (HA): Free Stock Analysis Report CHINA EASTN-ADR (CEA): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines, which has stayed away from hedging its fuel costs, expects to generate savings of approximately $2 billion due to weak fuel costs in 2016.
|
8043.0
|
2016-03-13 00:00:00 UTC
|
Which Airlines Will Get to Fly to Havana?
|
AAL
|
https://www.nasdaq.com/articles/which-airlines-will-get-fly-havana-2016-03-13
|
nan
|
nan
|
Last month, the U.S. and Cuba finalized an agreement that will allow scheduled flights between the U.S. and Cuba to resume. However, U.S. carriers will be limited to 20 daily round-trip flights to Havana. This set off a fierce competition for route authorities among American Airlines , JetBlue Airways , Southwest Airlines , Delta Air Lines , Spirit Airlines , and several other carriers.
More than a dozen airlines want to fly to Havana. Image source: American Airlines.
The airlines had to apply for route authorities earlier this month. The U.S. Department of Transportation will decide which airlines get to fly which routes sometime in the next few months. How will the DOT allocate the scarce route authorities to Havana?
These airlines could get nothing
Let's start with the airlines that are likely to get shut out. First, start-up low-cost carrier Eastern Air Lines wants to operate a daily Miami-Havana flight. Yet it is only authorized for charter operations at this point, and it's not clear when the FAA might clear it to start scheduled service. Given this uncertainty, regulators are likely to pass over Eastern's application.
Dynamic International Airways -- which wants to fly several times a week to New York, Chicago, and Los Angeles -- is in a similar position. As a startup just getting off the ground, it will probably get shut out, too.
Second, FedEx wants to operate daily cargo flights between Miami and Havana. Due to the scarcity of available flight frequencies, the DOT may be reluctant to give one to a cargo carrier. After all, most passenger airlines can carry express packages in their cargo holds.
Third, tiny regional airline Silver Airways wants to fly to Havana from several cities in Florida. The DOT is unlikely to give scarce route authorities to an airline that flies 34-seat turboprops when every other airline plans to use much larger mainline planes.
Finally, Minnesota-based low-cost carrier Sun Country Airlines wants to fly to Havana twice a week from Fort Myers, Florida. The DOT may shy away from awarding less-than-daily route authorities, as it would likely cause mid-week frequencies to go unused.
Most routes will go to South Florida
In allocating Havana routes, regulators will likely work to balance three goals that are somewhat in tension with one another. First, they will try to ensure that there is ample service from the regions that will generate the most demand for travel to Cuba. Second, they will try to maximize competition. Third, they will probably aim for some geographical diversity in the cities chosen as gateways for Havana flights.
Much of the demand for travel to Cuba will come from people visiting friends and relatives, since tourism is still prohibited. The vast majority of the Cuban-American population lives in Florida, particularly the Greater Miami area. Accordingly, American Airlines and JetBlue -- the two largest airlines in South Florida -- requested huge slot allocations .
JetBlue requested more than half of the available Havana route authorities. Image source: JetBlue Airways.
However, the DOT isn't likely to give any airline more than four or five route authorities to Havana. It doesn't want to create an oligopoly. In addition to American and JetBlue, Southwest Airlines, Spirit Airlines, Delta Air Lines, and Frontier Airlines have all proposed flying to Havana from either Miami or Fort Lauderdale.
As the largest carrier in the region, American Airlines might be given four daily roundtrips from Miami to Havana. Delta will also likely be approved for daily Miami-Havana flights. Finally, ultra-low cost carrier Frontier Airlines has proposed a routing for two daily Miami-Havana flights, one of which would continue to Atlanta. Frontier has a good shot at getting this route approved, as it would provide a check on American and Delta's pricing in Miami.
Frontier Airlines could get two of the Havana slots for flights to Miami. Image source: The Motley Fool.
Meanwhile, in Fort Lauderdale, JetBlue wants four daily flights to Havana; Southwest wants six; and Spirit Airlines wants two. In the interest of maximizing competition, the DOT will probably give each of the three discounters two daily Fort Lauderdale-Havana flights.
Dividing up the remaining routes
This hypothetical route allocation would use up 13 of the 20 daily frequencies available. That seems like a reasonable proportion given that South Florida is home to about half of the Cuban-American population and it's also ideally located for connections to other U.S. cities.
As for the other frequencies, the DOT will probably set aside one flight each for Orlando and Tampa. JetBlue has a good shot at beating out Southwest and Delta for the Orlando flight, while Southwest is likely to win the Tampa flight over JetBlue.
Southwest will probably be offered several Havana route authorities. Image source: The Motley Fool.
Looking beyond Florida, Alaska Air requested two daily flights to Los Angeles. It will probably have to settle for one. The only daily route United Continental proposed is to its Newark Airport hub. There is a significant Cuban-American community in that area, which bolsters United's case.
JetBlue and Delta both want to fly to New York's JFK Airport. They will probably be offered one daily flight each on that route. (JetBlue had requested two.)
That leaves one slot remaining. Delta has proposed a daily flight to Havana from Atlanta, where it operates the largest airline hub in the world. There may not be much local demand in that market, but the DOT might select it for the final slot as it would enable one-stop service from a vast number of U.S. cities.
Wait and see
The route allocation proposed above has the advantage of fostering vigorous competition in the key South Florida-Havana travel market with 13 daily flights on six carriers. It also allows for daily flights to five other large cities and key Cuban-American population centers: New York, Los Angeles, Atlanta, Tampa, and Orlando.
That said, airlines requested nearly three times as many Havana routes as the U.S. government is allowed to distribute. This gives regulators many plausible ways to divide the available frequencies. We'll just have to wait and see how they choose to tackle this problem.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article Which Airlines Will Get to Fly to Havana? originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of JetBlue Airways, Spirit Airlines, and United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, long January 2017 $17 calls on JetBlue Airways, long January 2017 $30 calls on American Airlines Group, and long June 2016 $30 calls on Spirit Airlines. The Motley Fool is long January 2017 $35 calls on American Airlines Group. The Motley Fool recommends FedEx and Spirit Airlines. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
There may not be much local demand in that market, but the DOT might select it for the final slot as it would enable one-stop service from a vast number of U.S. cities. Wait and see The route allocation proposed above has the advantage of fostering vigorous competition in the key South Florida-Havana travel market with 13 daily flights on six carriers. It also allows for daily flights to five other large cities and key Cuban-American population centers: New York, Los Angeles, Atlanta, Tampa, and Orlando.
|
This set off a fierce competition for route authorities among American Airlines , JetBlue Airways , Southwest Airlines , Delta Air Lines , Spirit Airlines , and several other carriers. In addition to American and JetBlue, Southwest Airlines, Spirit Airlines, Delta Air Lines, and Frontier Airlines have all proposed flying to Havana from either Miami or Fort Lauderdale. Adam Levine-Weinberg owns shares of JetBlue Airways, Spirit Airlines, and United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, long January 2017 $17 calls on JetBlue Airways, long January 2017 $30 calls on American Airlines Group, and long June 2016 $30 calls on Spirit Airlines.
|
This set off a fierce competition for route authorities among American Airlines , JetBlue Airways , Southwest Airlines , Delta Air Lines , Spirit Airlines , and several other carriers. In addition to American and JetBlue, Southwest Airlines, Spirit Airlines, Delta Air Lines, and Frontier Airlines have all proposed flying to Havana from either Miami or Fort Lauderdale. Adam Levine-Weinberg owns shares of JetBlue Airways, Spirit Airlines, and United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, long January 2017 $17 calls on JetBlue Airways, long January 2017 $30 calls on American Airlines Group, and long June 2016 $30 calls on Spirit Airlines.
|
This set off a fierce competition for route authorities among American Airlines , JetBlue Airways , Southwest Airlines , Delta Air Lines , Spirit Airlines , and several other carriers. However, the DOT isn't likely to give any airline more than four or five route authorities to Havana. In addition to American and JetBlue, Southwest Airlines, Spirit Airlines, Delta Air Lines, and Frontier Airlines have all proposed flying to Havana from either Miami or Fort Lauderdale.
|
8044.0
|
2016-03-09 00:00:00 UTC
|
American Airlines February Traffic Up, PRASM View Dull
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-february-traffic-up-prasm-view-dull-2016-03-09
|
nan
|
nan
|
American Airlines Group Inc.AAL air traffic numbers were strong in the month of February. Traffic - measured in revenue passenger miles (RPMs) - came in at 15.67 billion, up 4.7% from 14.97 billion recorded a year ago.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 8% to 20.37 billion. Meanwhile, the load factor or percentage of seats filled by passengers decreased to 77% from 79.3% in Feb 2015.
At the end of the first two months of 2016, American Airlinesgenerated RPMs of 32.76 billion (up 3.1% year over year) and ASMs of 41.8 billion (up 3.5% year over year). Load factor stood at 78.4% compared with 78.7% last February. Likewise, on a year-over-year basis, passenger count climbed 3.6% in the month and 1.9% over the last two months.
However, American Airlines continue to anticipate a 6% to 8% year over year decline in PRASM (passenger revenue per available seat mile) in the first quarter of 2016. Volatile foreign exchange is mainly expected to hurt PRASM in the quarter.
The company's significant route expansion, ancillary product introduction, fleet revamping and customer service enhancement continue to drive traffic. Further, the company has been reaping considerable benefits from its joint ventures and code share agreements.
Zacks Rank & Key Picks
American Airlinescurrently carries a Zacks Rank #3 (Hold). Better-stocks in the same space include Deutsche Lufthansa Aktiengesellschaft DLAKY , Hawaiian Holdings Inc. HA and Southwest Airlines Co. LUV . All the three companies sport a Zacks Rank #1 (Strong Buy).
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 >>
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 AIR (LUV): Free Stock Analysis Report
HAWAIIAN HLDGS (HA): Free Stock Analysis Report
LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report
AMER AIRLINES (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.
|
American Airlines Group Inc.AAL air traffic numbers were strong in the month of February. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The company's significant route expansion, ancillary product introduction, fleet revamping and customer service enhancement continue to drive traffic.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc.AAL air traffic numbers were strong in the month of February. Better-stocks in the same space include Deutsche Lufthansa Aktiengesellschaft DLAKY , Hawaiian Holdings Inc. HA and Southwest Airlines Co. LUV .
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc.AAL air traffic numbers were strong in the month of February. At the end of the first two months of 2016, American Airlinesgenerated RPMs of 32.76 billion (up 3.1% year over year) and ASMs of 41.8 billion (up 3.5% year over year).
|
American Airlines Group Inc.AAL air traffic numbers were strong in the month of February. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. However, American Airlines continue to anticipate a 6% to 8% year over year decline in PRASM (passenger revenue per available seat mile) in the first quarter of 2016.
|
8045.0
|
2016-03-09 00:00:00 UTC
|
Zacks Industry Outlook Highlights: American Airlines Group, Alaska Air Group, JetBlue Airways, United Continental Holdings and Delta Air Lines
|
AAL
|
https://www.nasdaq.com/articles/zacks-industry-outlook-highlights%3A-american-airlines-group-alaska-air-group-jetblue
|
nan
|
nan
|
For Immediate Release
Chicago, IL - March 09, 2016 - Today, Zacks Equity Research discusses the Airlines, (Part 2), including American Airlines Group ( AAL ), Alaska Air Group ( ALK ), JetBlue Airways Corp. ( JBLU ), United Continental Holdings ( UAL ) and Delta Air Lines ( DAL ).
Industry: Airlines, part 2
Link: http://www.zacks.com/commentary/74628/here39s-why-airline-stocks-are-a-must-add-for-your-portfolio
It is no secret that stocks in the airline space have benefited immensely from the fall in oil prices . While oil prices have gained ground lately, they still remain materially below year-earlier level. The fall in oil prices have naturally resulted in massive savings for carriers as fuel costs account for a significant chunk of an airline's operating expenses.
Earnings Growth in Abundance in Q4
Plummeting oil prices have aided the bottom line of carriers for quite some time now and the final quarter of 2015 was no exception. For example, carriers like American Airlines Group ( AAL ), Alaska Air Group ( ALK ) and JetBlue Airways Corp. ( JBLU ) reported higher-than-expected earnings in the fourth quarter, primarily on the strength of low oil prices.
Total operating expenses at American Airlines, which does not hedge fuel costs, declined 7.9% to $8.6 billion on the back of a 40.8% reduction in fuel costs. At low-cost carrier JetBlue Airways, total operating expenses decreased 1.1% to $1.3 billion, primarily due to a 31.3% year-over-year decline in fuel expenses.
Operating expenses at Alaska Air Group dropped 5% as fuel price (economic) declined to $1.62 per gallon in fourth-quarter 2015 from $2.64 a year ago. Not only did earnings at American Airlines, Alaska Air Group and JetBlue beat expectations, the same also expanded 31.6%, 55% and a whopping 115% respectively, on a year-over-year basis, thanks to cheap oil.
Other airline heavyweights like United Continental Holdings ( UAL ) and Delta Air Lines ( DAL ), also registered significant year-over-year bottom-line growth, despite falling short of expectations, on the back of low fuel costs.
Surge in Shareholder Friendly Activities
With low oil prices significantly bolstering the final health of most carriers, it is expected that air carriers will continue to return a part of their massive profits to shareholders through dividend payouts and buyback activities. There was a surge in shareholder friendly activities through 2015 with airline heavyweights like Delta hiking their dividend payouts.
The trend has caught up in 2016 as well. In January, Alaska Air Group announced that it was hiking its quarterly dividend by 38% to $0.275 per share. Furthermore, in February, United Continental revealed that it intends to double its buyback program from $750 million to $1.5 billion for the first quarter of 2016. The carrier also said that it intends to complete the $3 billion buyback plan, announced in July last year, by the second half of the current year. The earlier expectation was to complete the repurchase plan by Dec 31, 2017.
Profit Sharing Reaches New Highs
The massive profits generated by carriers, courtesy plunging oil prices, has also encouraged them to shell out significant amounts to employees under their profit sharing schemes. In Feb 2016, Delta Air Lines, which garnered a whopping $5.9 billion in pre-tax profit (on an adjusted basis) in 2015, rewarded its employees by spending $1.5 billion as part of its profit sharing scheme.
As the sixth consecutive year of the carrier sharing its profits with its employees, 2015 marks the highest payout in the history of corporate profit sharing programs. The payout translates into employees getting in excess of 21% of their 2015 annual earnings. The comparable figure was 16% in 2014.
Furthermore, Southwest Airlines announced last month that it will pay $620 million to its employees as part of its 2015 profit sharing plan. This (the 42nd consecutive profit sharing arrangement) marks the highest payment made in the company's history in this regard. The 2015 payment, to be made on Apr 29, equates to approximately 15.6% of each employee's earnings in 2015.
New Routes & Infrastructural Improvements
Backed by robust balance sheets, airline companies are constantly looking to expand by adding new routes. For example, in Dec 2015, Southwest Airlines announced that it intends to launch flights between Los Angeles International Airport and Daniel Oduber Quiros International Airport in Liberia/Guanacaste, Costa Rica from Apr 2016.
Carriers are also looking to enhance customer-friendly facilities to enrich the flying experience. For instance, last December, American Airlines announced its plans to improve services on international flights with the rollout of Premium Economy. The service will be available on Boeing 787-9s starting late 2016. The service will offer more leg space, priority check-in and boarding, on-board entertainment options, comfortable seats, better meal options and unlimited Wi-Fi usage.
Moreover, passengers will be allowed to check in two bags for no extra cost. The Premium Economy flight service will be available to Business Class and Main Cabin passengers.
Strong 2015 Traffic Data on Pocket Friendly Airfares
According to data released by the International Air Transport Association (IATA), air travel demand was the strongest in 2015 over the last five years. The strong demand came on the back of low air fares as fuel costs declined significantly for carriers. IATA said that global airfares (adjusted for the U.S. strength) were down 5% in 2015 on a year-over-year basis.
Global traffic expanded 6.5% in 2015 with capacity rising 5.6%. Load factor (% of seats filled by passengers) improved 60 basis points to 80.3% in 2015 as traffic growth outpaced capacity expansion. Such strong traffic numbers further highlight the strength of airline stocks. In fact, IATA expects passenger travel to grow further i.e. 6.9% in 2016 with 3.8 billion people projected to take to the skies in the current year.
Aviation Treaties with Mexico & Cuba in the Limelight
U.S.-based carriers have welcomed the recent aviation treaties with Mexico and Cuba as they see these as a chance to further broaden their scale of operations and thereby generate more revenues. In Dec 2015, the US Department of Transportation (DOT) announced a new air transport deal between the U.S. and the Mexican government.
The treaty, inked by the transportation ministers of both the countries, follows more than two years of negotiations on the issue. The liberalized deal, once effective, will allow carriers the freedom to operate on any route (with limitless frequency) of their choice between Mexico and the U.S. The treaty has already won the approval of the U.S. government but needs to be ratified by the Mexican senate before it goes into effect.
Similarly, the recent finalization of the bilateral air service arrangement between U.S. and Cuba has been greeted warmly by American carriers as it has removed the hurdles to resumption of scheduled air services to and from Cuba, a favorite tourist spot, after more than five decades.
That the easing of the travel restrictions to Cuba is a key positive for carriers is evident as almost every airline in the U.S. has applied to the DOT for the new routes schedule to Cuba. The last date for application was Mar 2, 2016. The DOT will review the proposals before announcing its final verdict on Mar 21, 2016.
Capacity Cuts to Assuage Fears
It is a well-known fact that capacity woes have plagued airlines for quite some time. In a bid to ease capacity-related tensions, several carriers have put a brake on their capacity expansion plans. Delta Air Lines, for instance, announced on its fourth-quarter 2015 conference call that it expects capacity on the international front to decline in the band of 2% to 3% in the first quarter of 2016 due to cuts made in markets like Japan, Brazil, Russia and the Middle East.
To Wrap Up
The above write-up clearly suggests that the near-term outlook of airline stocks is rather bright. Stocks in the space are likely to perform well in the coming quarters mainly driven by cheap oil. In fact, Delta has announced that it expects to generate over $3 billion savings in 2016, due to soft oil prices.
The encouraging 2016 profitability forecast by the IATA further justifies our stance on airline stocks. The trade association expects the airline industry to register profits of $36.3 billion in 2016 with a net profit margin of 5.1%. That airline companies have witnessed a turn of fortunes as oil began to sink mid-2014 onward can be made out from the fact that IATA's 2016 profit projection is more than double the $17.3 billion achieved in profits in 2014.
Check out our latest Airline Industry Outlook for more news on the current state of affairs in this market from an earnings perspective, and how the trend looks ahead for this important sector at the moment.
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 >>
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research.
Subscribe to this free newsletter today . Find out What is happening in the stock market today on zacks.com.
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
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
DELTA AIR LINES (DAL): 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.
|
For Immediate Release Chicago, IL - March 09, 2016 - Today, Zacks Equity Research discusses the Airlines, (Part 2), including American Airlines Group ( AAL ), Alaska Air Group ( ALK ), JetBlue Airways Corp. ( JBLU ), United Continental Holdings ( UAL ) and Delta Air Lines ( DAL ). For example, carriers like American Airlines Group ( AAL ), Alaska Air Group ( ALK ) and JetBlue Airways Corp. ( JBLU ) reported higher-than-expected earnings in the fourth quarter, primarily on the strength of low oil prices. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
For Immediate Release Chicago, IL - March 09, 2016 - Today, Zacks Equity Research discusses the Airlines, (Part 2), including American Airlines Group ( AAL ), Alaska Air Group ( ALK ), JetBlue Airways Corp. ( JBLU ), United Continental Holdings ( UAL ) and Delta Air Lines ( DAL ). For example, carriers like American Airlines Group ( AAL ), Alaska Air Group ( ALK ) and JetBlue Airways Corp. ( JBLU ) reported higher-than-expected earnings in the fourth quarter, primarily on the strength of low oil prices. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
For Immediate Release Chicago, IL - March 09, 2016 - Today, Zacks Equity Research discusses the Airlines, (Part 2), including American Airlines Group ( AAL ), Alaska Air Group ( ALK ), JetBlue Airways Corp. ( JBLU ), United Continental Holdings ( UAL ) and Delta Air Lines ( DAL ). For example, carriers like American Airlines Group ( AAL ), Alaska Air Group ( ALK ) and JetBlue Airways Corp. ( JBLU ) reported higher-than-expected earnings in the fourth quarter, primarily on the strength of low oil prices. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
For Immediate Release Chicago, IL - March 09, 2016 - Today, Zacks Equity Research discusses the Airlines, (Part 2), including American Airlines Group ( AAL ), Alaska Air Group ( ALK ), JetBlue Airways Corp. ( JBLU ), United Continental Holdings ( UAL ) and Delta Air Lines ( DAL ). For example, carriers like American Airlines Group ( AAL ), Alaska Air Group ( ALK ) and JetBlue Airways Corp. ( JBLU ) reported higher-than-expected earnings in the fourth quarter, primarily on the strength of low oil prices. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
8046.0
|
2016-03-09 00:00:00 UTC
|
Southwest Airlines February Traffic Up, Load Factor Down
|
AAL
|
https://www.nasdaq.com/articles/southwest-airlines-february-traffic-up-load-factor-down-2016-03-09
|
nan
|
nan
|
Low-cost carrier Southwest Airlines Co.LUV announced strong traffic numbers for the month of February with revenue passenger miles (RPMs: a measure of air traffic) improving 13.5% on a year-over-year basis to 8.6 billion. Available seat miles (ASMs: a measure of capacity) climbed 14.7% to 10.9 billion.
However, another important metric - load factor (% of seats filled by passengers) - declined 90 basis points to 79.0% in the month.
In the first two months of 2016, Southwest Airlines generated RPMs of 17.7 billion (up 9.8% year over year) and ASMs of 22.4 billion (up 11.1%), leading to a load factor of 78.2% (up 80 bps).
Interestingly, Southwest Airlines is not the only carrier facing issues with the load factor. We note that American Airlines Group Inc. AAL , Delta Air Lines, Inc. DAL and Alaska Air Group, Inc. ALK also experienced a decline in load factor in February as capacity expansion outpaced the increase in traffic.
Additionally, the latest challenge for carriers is the spread of the mosquito-borne Zika virus. Alarmed by the current outbreak, many carriers are offering fliers (particularly pregnant women) refunds or options to reschedule their travel to Zika-affected areas at a later date.
Meanwhile, Southwest Airlines has projected flat operating revenue per ASM (RASM: a key measure of unit revenue) on a year-over-year basis in the first quarter of 2016. We note that RASM in the first quarter of 2015 had been 13.67 cents.
Nonetheless, we believe that strategies like fleet restructuring, introduction of international services, successful integration of AirTran and winning of air slots will act as tailwinds for the company going forward.
Southwest Airlines currently sports a Zacks Rank #1 (Strong Buy).
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 >>
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 AIR (LUV): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
AMER AIRLINES (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.
|
We note that American Airlines Group Inc. AAL , Delta Air Lines, Inc. DAL and Alaska Air Group, Inc. ALK also experienced a decline in load factor in February as capacity expansion outpaced the increase in traffic. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. However, another important metric - load factor (% of seats filled by passengers) - declined 90 basis points to 79.0% in the month.
|
We note that American Airlines Group Inc. AAL , Delta Air Lines, Inc. DAL and Alaska Air Group, Inc. ALK also experienced a decline in load factor in February as capacity expansion outpaced the increase in traffic. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Low-cost carrier Southwest Airlines Co.LUV announced strong traffic numbers for the month of February with revenue passenger miles (RPMs: a measure of air traffic) improving 13.5% on a year-over-year basis to 8.6 billion.
|
We note that American Airlines Group Inc. AAL , Delta Air Lines, Inc. DAL and Alaska Air Group, Inc. ALK also experienced a decline in load factor in February as capacity expansion outpaced the increase in traffic. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Low-cost carrier Southwest Airlines Co.LUV announced strong traffic numbers for the month of February with revenue passenger miles (RPMs: a measure of air traffic) improving 13.5% on a year-over-year basis to 8.6 billion.
|
We note that American Airlines Group Inc. AAL , Delta Air Lines, Inc. DAL and Alaska Air Group, Inc. ALK also experienced a decline in load factor in February as capacity expansion outpaced the increase in traffic. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Low-cost carrier Southwest Airlines Co.LUV announced strong traffic numbers for the month of February with revenue passenger miles (RPMs: a measure of air traffic) improving 13.5% on a year-over-year basis to 8.6 billion.
|
8047.0
|
2016-03-08 00:00:00 UTC
|
Zacks Industry Outlook Highlights: American Airlines Group, Alaska Air Group, JetBlue Airways and Delta Air Lines
|
AAL
|
https://www.nasdaq.com/articles/zacks-industry-outlook-highlights%3A-american-airlines-group-alaska-air-group-jetblue-0
|
nan
|
nan
|
For Immediate Release
Chicago, IL - March 08, 2016 - Today, Zacks Equity Research discusses the Coal, (Part 3), including American Airlines Group ( AAL ), Alaska Air Group ( ALK ), JetBlue Airways Corporation ( JBLU ) and Delta Air Lines ( DAL ).
Industry: Airlines, part 1
Link: http://www.zacks.com/commentary/74444/airline-industry-stock-outlook---march-2016
Cheap Oil Still a Blessing for Airline Stocks
It's a well-documented fact that falling oil prices over the recent past have notably benefited airlines' bottom lines. The magnitude of oil's decline is indeed gigantic, considering that currently crude prices are hovering around the $35 per barrel price-point compared with mid-2014 levels, when the commodity was trading at above $100 a barrel.
No wonder airline stocks have been reporting impressive numbers on the earnings front for quite some time now. The story was no different in the final quarter of 2015. Stocks like American Airlines Group ( AAL ), Alaska Air Group ( ALK ) and JetBlue Airways Corporation ( JBLU ) delivered higher-than-expected earnings in the quarter riding on the oil advantage. In addition to beating expectations, earnings also expanded significantly on a year-over-year basis, thanks to cheap oil.
With fuel costs on the decline, it is quite evident that airline stocks are witnessing huge savings. With prices expected to remain weak going forward, carriers are likely to continue experiencing ample savings. For example, Delta Air Lines ( DAL ) expects to generate savings in excess of $3 billion in 2016 due to the fuel cost tailwind. It was this positive commentary that spurred a rise in Delta's stock price after its fourth quarter earnings release on Jan 19, despite it missing on both earnings and revenues.
The bottom-line blessing aside, the positive impact of cheap oil has also been felt by shareholders, fliers and employees in the form of increased buybacks and dividends, additional investments by carriers to enhance the flying experience, and higher profit sharing payouts respectively.
IATA's Rosy Forecast for 2016
In Dec 2015, the International Air Transport Association (IATA) provided an encouraging outlook for the global airline industry. The trade association expects the aviation industry to register net profits of $36.3 billion in 2016 (with a net profit margin of 5.1%), which is more than double the reported 2014 figure of $17.3 billion, when oil prices were much higher. In December, the trade association had forecasted 2015 net profits at $33 billion, which too is lower than the 2016 projection.
The bulk of the 2016 global profits ($19.2 billion) is expected to come from the North American region. The other regions, namely Asia-Pacific, Europe, Latin America and the Middle East, are expected to generate post-tax net profit of $6.6 billion, $8.5 billion, $0.4 billion and $1.7 billion, respectively. On the other hand, the aviation industry is likely to incur a loss of approximately $0.1 billion in 2016 from Africa.
Cheap oil, which is projected at $63.8 per barrel in 2016, is the primary catalyst behind the bright forecast. The magnitude of the decline can be gauged from the fact that average fuel price per barrel was $114.8 in 2014. The fuel bill is projected to fall to $135 billion in 2016, which represents a significant decline from $226 billion recorded only two years ago.
Although it is a fact that most carriers hedge at least some of their fuel costs, the majority of them should still continue to benefit considerably from the plunge in oil prices. Notably, carriers use a combination of calls, swaps and collars at varying WTI crude-equivalent price levels to hedge fuel costs.
Meanwhile, the IATA suggests that demand for passenger travel will improve in 2016 over 2015 levels, courtesy an improving economy. The demand for travel is projected to increase 6.9% year over year in 2016, higher than 6.5% recorded in 2015. According to IATA, the 2015 growth rate marked the strongest demand for air travel in five years. That the 2016 projected growth rate is even better speaks highly of the improving demand scenario for air travel. IATA believes that 3.8 billion passengers will travel in 2016.
Headwinds to Watch Out For
Despite the above mentioned advantages, the airline space is not bereft of challenges. The biggest headwind confronting stocks in the space is with respect to a key revenue metric -passenger revenue per available seat mile or PRASM, a measure of sales relative to capacity for a carrier.
Airline stocks struggled with respect to revenues in the fourth quarter, similar to the other quarters of 2015, mainly on grounds of PRASM weakness. Lower fuel surcharges on international flights due to weak oil prices have been one of the main reasons behind the persistent decline in PRASM. Consequently, plunging oil prices have become a double-edged sword for carriers. Alongside, a strong dollar has also been hurting the top line.
The lackluster top-line growth apart, threats posed by the spread of the Zika virus, anti-humanistic acts of terrorism such as the deadly Paris attacks, capacity woes and multiple probes/disputes are some of the other challenges confronting stocks in the space.
Zacks Industry Rank
Within the Zacks Industry classification, airlines are broadly grouped into the Transportation sector (one of the 16 Zacks sectors).
We rank all the 260-plus industries in the 16 Zacks sectors based on the earnings outlook and fundamental strength of the constituent companies in each industry. To learn more visit: About Zacks Industry Rank .
As a point of reference, the outlook for industries in the top one-third of the list (with Zacks Industry Rank #88 and lower) is Positive; the mid one-third of the list (between #89 and #176) is 'Neutral' while the last one-third (#177 and above) is Negative.
The Zacks Industry Rank #11 for the "Trans-Airline" segment comfortably places it at the top 1/3rd of the 260+ member industry group and indicates the group's near-term Positive outlook. With oil prices unlikely to touch the highs witnessed in mid-2014 anytime soon, airline companies should continue to display impressive bottom-line growth going forward. Moreover, a higher demand for travel on the back of an improving labor market and consolidation are further reasons validating the bullish Zacks Rank on the airline industry despite the headwinds discussed above.
Earnings Trends
The airline industry falls under the broader transportation sector. With all the S&P 500 members in the transportation space having already announced their fourth-quarter 2015 earnings results, the aggregate earnings beat ratio is 50%.
On the other hand, the revenue beat ratio is 0.0%. Average earnings growth is 14.5% while year-over-year top-line growth has treaded into the negative territory and stands at a negative 2.4%. The picture is gloomier for the first quarter of 2016 with both earnings and revenues projected to contract on year over year basis at 0.9% and 0.6% respectively.
For more details about earnings for this sector and others, please read our Zacks Earning Trends report.
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 >>
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today . Find out What is happening in the stock market today on zacks.com.
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
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
DELTA AIR LINES (DAL): 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.
|
For Immediate Release Chicago, IL - March 08, 2016 - Today, Zacks Equity Research discusses the Coal, (Part 3), including American Airlines Group ( AAL ), Alaska Air Group ( ALK ), JetBlue Airways Corporation ( JBLU ) and Delta Air Lines ( DAL ). Stocks like American Airlines Group ( AAL ), Alaska Air Group ( ALK ) and JetBlue Airways Corporation ( JBLU ) delivered higher-than-expected earnings in the quarter riding on the oil advantage. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
For Immediate Release Chicago, IL - March 08, 2016 - Today, Zacks Equity Research discusses the Coal, (Part 3), including American Airlines Group ( AAL ), Alaska Air Group ( ALK ), JetBlue Airways Corporation ( JBLU ) and Delta Air Lines ( DAL ). Stocks like American Airlines Group ( AAL ), Alaska Air Group ( ALK ) and JetBlue Airways Corporation ( JBLU ) delivered higher-than-expected earnings in the quarter riding on the oil advantage. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here. For Immediate Release Chicago, IL - March 08, 2016 - Today, Zacks Equity Research discusses the Coal, (Part 3), including American Airlines Group ( AAL ), Alaska Air Group ( ALK ), JetBlue Airways Corporation ( JBLU ) and Delta Air Lines ( DAL ). Stocks like American Airlines Group ( AAL ), Alaska Air Group ( ALK ) and JetBlue Airways Corporation ( JBLU ) delivered higher-than-expected earnings in the quarter riding on the oil advantage.
|
For Immediate Release Chicago, IL - March 08, 2016 - Today, Zacks Equity Research discusses the Coal, (Part 3), including American Airlines Group ( AAL ), Alaska Air Group ( ALK ), JetBlue Airways Corporation ( JBLU ) and Delta Air Lines ( DAL ). Stocks like American Airlines Group ( AAL ), Alaska Air Group ( ALK ) and JetBlue Airways Corporation ( JBLU ) delivered higher-than-expected earnings in the quarter riding on the oil advantage. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
8048.0
|
2016-03-08 00:00:00 UTC
|
Why Shares of Spirit Airlines Incorporated Rose 14.2% in February
|
AAL
|
https://www.nasdaq.com/articles/why-shares-spirit-airlines-incorporated-rose-142-february-2016-03-08
|
nan
|
nan
|
What: 2015 was a terrible year for Spirit Airlines investors. Spirit shares lost up to 60% of their value during the year, after price-matching activity from legacy carriers like American Airlines caused unit revenue to plummet.
However, the stock has found firmer ground this year, as a CEO change has increased investors' confidence in the company's trajectory. In fact, Spirit Airlines stock jumped 14% during February, according to data provided by S&P Global Market Intelligence .
Spirit Airlines Stock Performance. Data by YCharts .
So what: Former CEO Ben Baldanza presided over a period of huge revenue and profit growth for Spirit Airlines. Even in 2015, as the stock plunged, Spirit Airlines managed to grow adjusted earnings per share by 35% year over year, due to the benefit of lower fuel prices.
Nevertheless, many investors were frustrated by the company's weak unit revenue and multiple guidance cuts last year. Baldanza's strategic preference to focus on the biggest markets and gain customers by underpricing legacy carriers like American Airlines began to seem less prudent once those competitors started to embrace price-matching strategies.
By contrast, on Spirit Airlines' conference call last month, new CEO Bob Fornaro told investors that he would likely put more emphasis on underserved small and mid-size markets . In other words, he thinks Spirit can thrive by flying routes that rivals like American Airlines and Delta Air Lines don't serve on a nonstop basis.
Spirit Airlines' new CEO is tweaking the company's strategy. Image source: Spirit Airlines.
Fornaro also pledged to improve Spirit's operational reliability, which has lagged the industry in recent years. For example, better on-time performance could lead to more travelers considering Spirit for their travel plans. Some initiatives like scaling back aircraft utilization could increase Spirit's unit costs, but there would be offsetting cost benefits from operating more reliably.
Now what: Bob Fornaro has laid out a plausible plan for how Spirit can maintain the core of its business model while making some tweaks to respond to stepped-up competition from legacy carriers. However, that's no guarantee of success in the fast-moving airline industry.
Ultimately, investors should pay attention to a few key metrics to gauge Spirit Airlines' progress. First, on-time performance improvements would indicate the success of its reliability initiatives. Second, unit revenue stabilization would show that Spirit was coping better with American Airlines' price-matching strategy. Third, continued unit cost declines would demonstrate that Spirit can be reliable without compromising its industry-leading cost structure.
This iSecret stock could make this pop look tiny
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article Why Shares of Spirit Airlines Incorporated Rose 14.2% in February originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of Spirit Airlines and is long January 2017 $40 calls on Delta Air Lines, Inc., long January 2017 $30 calls on American Airlines Group, and long June 2016 $30 calls on Spirit Airlines. The Motley Fool is long January 2017 $35 calls on American Airlines Group. The Motley Fool recommends Spirit Airlines. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
Baldanza's strategic preference to focus on the biggest markets and gain customers by underpricing legacy carriers like American Airlines began to seem less prudent once those competitors started to embrace price-matching strategies. By contrast, on Spirit Airlines' conference call last month, new CEO Bob Fornaro told investors that he would likely put more emphasis on underserved small and mid-size markets . Now what: Bob Fornaro has laid out a plausible plan for how Spirit can maintain the core of its business model while making some tweaks to respond to stepped-up competition from legacy carriers.
|
Spirit shares lost up to 60% of their value during the year, after price-matching activity from legacy carriers like American Airlines caused unit revenue to plummet. Adam Levine-Weinberg owns shares of Spirit Airlines and is long January 2017 $40 calls on Delta Air Lines, Inc., long January 2017 $30 calls on American Airlines Group, and long June 2016 $30 calls on Spirit Airlines. The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
Spirit shares lost up to 60% of their value during the year, after price-matching activity from legacy carriers like American Airlines caused unit revenue to plummet. Adam Levine-Weinberg owns shares of Spirit Airlines and is long January 2017 $40 calls on Delta Air Lines, Inc., long January 2017 $30 calls on American Airlines Group, and long June 2016 $30 calls on Spirit Airlines. The Motley Fool recommends Spirit Airlines.
|
What: 2015 was a terrible year for Spirit Airlines investors. Spirit Airlines Stock Performance. Spirit Airlines' new CEO is tweaking the company's strategy.
|
8049.0
|
2016-03-07 00:00:00 UTC
|
3 Reasons United Continental Stock Could Fall
|
AAL
|
https://www.nasdaq.com/articles/3-reasons-united-continental-stock-could-fall-2016-03-07
|
nan
|
nan
|
Image source: United Continental.
Airline giants United Continental Holdings , Delta Air Lines , and American Airlines Group have all posted impressive share-price gains in recent years, and favorable conditions in the industry have conspired to bring huge profits to the industry. In particular, United Continental has benefited from a combination of new revenue from baggage fees and other ancillary charges as well as reduced expenses on fuel. Yet over the past year, investors have gotten nervous about the sustainability of the airline industry's upward movement, and they've left United Continental stock largely unchanged since early 2015. Let's look at three reasons United Continental stock could fall from current levels.
Labor issues
United Continental has run into some recent difficulties in contract negotiations with key labor groups, and the impact on worker morale remains to be seen. According to the latest updates from the United Negotiations website, the airline has made progress with the machinists and aerospace workers union, but the technicians union voted against a proposed agreement and will require further negotiations. Pilots ratified a contract extension, and dispatchers reached a tentative agreement with the airline. Flight attendants met for mediated negotiations back in January, having reached tentative agreements on certain issues while leaving others unresolved.
Labor discussions can be difficult, but the challenge United Continental faces right now is how to share its profits in a way that won't become problematic if the industry turns. More importantly, if poor results in negotiations lead to a drop in profits, shareholders could send the stock lower in response.
A jump in fuel costs
United Continental has watched its earnings climb dramatically as a result of the plunge in jet fuel prices. Those costs have continued to come down throughout 2015, and the positive impact on United Continental's bottom line has been sizable. Annual spending on aircraft fuel dropped more than 35% to $7.52 billion in 2015, which was down about $4.15 billion from the previous year. If you note that United Continental's operating income was $5.17 billion, you'll realize that fuel savings made up about 80% of the airline's bottom line last year.
Yet energy prices can rise as quickly as they can fall, and if they do, higher costs could have a lot of downward pressure on earnings. One reason why earnings multiples for shares of United Continental, as well as Delta and American, are so low is that investors already anticipate some declines in net income when fuel returns to more normal levels. Nevertheless, a quicker than expected rise in fuel costs could hurt earnings even more, and the stock could fall in response.
Heightened competition
United Continental has a reputation for lagging behind fellow major airlines Delta and American. In particular, the company has suffered from a profitability gap , sporting margins that in some cases were substantially lower than those of United's peers.
In 2015, United Continental closed the gap considerably, using its fuel-cost savings and other factors to bring pre-tax margins to 11.9%. That was within 2.5 percentage points of Delta. However, its guidance for early 2016 suggested that margins could start falling again because of reduced passenger unit revenue. By contrast, Delta expects widening operating margins, the net result of which would be to make the profitability gap even larger than in the past.
One big challenge for United is that traffic to and from its Houston hub is especially sensitive to energy-market conditions. That gives it a competitive disadvantage during times of weakness for the energy sector. Investors hope that United's margin issues will prove to be seasonal and fleeting in nature and that the airline will improve its performance as 2016 progresses. If that doesn't happen, though, disappointed investors will likely respond by bidding down the stock.
United Continental has a history of doing well, but recent share-price performance has been subpar. If these issues go against the airline, outright declines in the stock price are quite likely.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article 3 Reasons United Continental Stock Could Fall originally appeared on Fool.com.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool has the following options: long Jan. 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
Yet over the past year, investors have gotten nervous about the sustainability of the airline industry's upward movement, and they've left United Continental stock largely unchanged since early 2015. Labor discussions can be difficult, but the challenge United Continental faces right now is how to share its profits in a way that won't become problematic if the industry turns. One reason why earnings multiples for shares of United Continental, as well as Delta and American, are so low is that investors already anticipate some declines in net income when fuel returns to more normal levels.
|
Airline giants United Continental Holdings , Delta Air Lines , and American Airlines Group have all posted impressive share-price gains in recent years, and favorable conditions in the industry have conspired to bring huge profits to the industry. Labor issues United Continental has run into some recent difficulties in contract negotiations with key labor groups, and the impact on worker morale remains to be seen. If you note that United Continental's operating income was $5.17 billion, you'll realize that fuel savings made up about 80% of the airline's bottom line last year.
|
Airline giants United Continental Holdings , Delta Air Lines , and American Airlines Group have all posted impressive share-price gains in recent years, and favorable conditions in the industry have conspired to bring huge profits to the industry. Yet over the past year, investors have gotten nervous about the sustainability of the airline industry's upward movement, and they've left United Continental stock largely unchanged since early 2015. One reason why earnings multiples for shares of United Continental, as well as Delta and American, are so low is that investors already anticipate some declines in net income when fuel returns to more normal levels.
|
Airline giants United Continental Holdings , Delta Air Lines , and American Airlines Group have all posted impressive share-price gains in recent years, and favorable conditions in the industry have conspired to bring huge profits to the industry. If you note that United Continental's operating income was $5.17 billion, you'll realize that fuel savings made up about 80% of the airline's bottom line last year. One reason why earnings multiples for shares of United Continental, as well as Delta and American, are so low is that investors already anticipate some declines in net income when fuel returns to more normal levels.
|
8050.0
|
2016-03-06 00:00:00 UTC
|
3 Reasons American Airlines Stock Could Fall
|
AAL
|
https://www.nasdaq.com/articles/3-reasons-american-airlines-stock-could-fall-2016-03-06
|
nan
|
nan
|
Image: American Airlines.
It's hard to believe that it was only a little more than two years ago that American Airlines Group come out of bankruptcy. Since then, the airline's merger with US Airways has resulted in substantial integration of the two formerly separate operations, and the company now leads Delta Air Lines and other carriers as the largest airline in the world. Yet after seeing its stock soar in the year following its reemergence, American Airlines stock has fallen back over the past year or so, and investors are increasingly concerned about whether the industry as a whole can keep climbing. Let's look at three reasons American Airlines stock could fall from here.
Passenger revenue metrics might not improve
Part of the trouble that American Airlines has faced lately comes from poor results in its internal operational metrics. In particular, one key element of airline success is measured through passenger revenue per available seat mile, which incorporates fare levels, flight distance, carrying capacity, and load factors. American saw this metric drop 5.4% in 2015 compared to 2014. In large part, the airline blamed more intense competition from Southwest Airlines in key markets like Dallas as well as the strong dollar and its impact on foreign-currency revenues. Weak Latin American economies in countries such as Brazil and Venezuela also contributed to weak results.
American Airlines argues that its passenger revenue metrics should rebound in the near run. A change to its frequent flyer program should result in fewer award flights, and efforts to differentiate further economy-class fares to accommodate bargain-shopping travelers should result in greater loads. Yet all of these factors rely on the U.S. economy holding up, and with global economic trends continuing to be troublesome, it's far from a sure thing that American Airlines will keep seeing the benefit of solid underlying macroeconomic growth in its key markets.
Fuel costs have nowhere to go but up
A big part of the income growth that American Airlines has seen recently has come from falling jet fuel prices. For the full 2015 year, costs for fuel and related taxes plunged 41% to $6.23 billion, and that saved American about $4.37 billion compared to 2014. To put that number into perspective, American Airlines' entire pre-tax operating income was $6.2 billion, and so fuel savings made about 70% of that figure in 2015.
So far, energy prices have fallen further, which could actually help American in 2016. More recently, though, some commodity prices have finally shown signs of regaining their lost luster, and that could just as easily push those fuel costs back upward. If fuel prices don't stay low, then it could put further pressure on American Airlines stock throughout the year.
Zika virus and the Rio Olympics
For a long time, investors in American Airlines have looked forward to the 2016 Summer Olympics in Rio de Janeiro. Having the Olympics in Brazil should be a boon for American, because the airline has a special relationship with the South American nation and its region-leading economy. American made a big deal of its exposure to Brazil when the country hosted the 2014 FIFA World Cup, boasting service to nine of the 12 destinations hosting the soccer tournament.
The risk involved with the Rio Olympics, however, is that attendance won't be as robust as many had hoped. The Zika virus has affected a reported 1.5 million Brazilians, and the danger of brain damage in babies of women who catch the virus while pregnant has created a lot of fear surrounding the disease. Athletes and spectators alike could well choose to avoid the Olympics if Brazil can't demonstrate that it has contained the outbreak, and last month, the U.S. Olympic Committee specifically advised sports federations that athletes and staff who are concerned about their health should consider skipping the event.
If travel to the Olympics suffers because of Zika, then American Airlines could be among the hardest hit. Unlike Southwest and its limited international exposure, American stands to gain or lose the most depending on what happens in Rio.
Overall, American Airlines has given shareholders a superb performance since emerging from bankruptcy. If these issues go wrong, though, then American's stock could reverse its recent gains.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article 3 Reasons American Airlines Stock Could Fall originally appeared on Fool.com.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool has the following options: long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
In particular, one key element of airline success is measured through passenger revenue per available seat mile, which incorporates fare levels, flight distance, carrying capacity, and load factors. Yet all of these factors rely on the U.S. economy holding up, and with global economic trends continuing to be troublesome, it's far from a sure thing that American Airlines will keep seeing the benefit of solid underlying macroeconomic growth in its key markets. More recently, though, some commodity prices have finally shown signs of regaining their lost luster, and that could just as easily push those fuel costs back upward.
|
Fuel costs have nowhere to go but up A big part of the income growth that American Airlines has seen recently has come from falling jet fuel prices. To put that number into perspective, American Airlines' entire pre-tax operating income was $6.2 billion, and so fuel savings made about 70% of that figure in 2015. Zika virus and the Rio Olympics For a long time, investors in American Airlines have looked forward to the 2016 Summer Olympics in Rio de Janeiro.
|
Yet after seeing its stock soar in the year following its reemergence, American Airlines stock has fallen back over the past year or so, and investors are increasingly concerned about whether the industry as a whole can keep climbing. Zika virus and the Rio Olympics For a long time, investors in American Airlines have looked forward to the 2016 Summer Olympics in Rio de Janeiro. Having the Olympics in Brazil should be a boon for American, because the airline has a special relationship with the South American nation and its region-leading economy.
|
Fuel costs have nowhere to go but up A big part of the income growth that American Airlines has seen recently has come from falling jet fuel prices. If fuel prices don't stay low, then it could put further pressure on American Airlines stock throughout the year. Zika virus and the Rio Olympics For a long time, investors in American Airlines have looked forward to the 2016 Summer Olympics in Rio de Janeiro.
|
8051.0
|
2016-03-06 00:00:00 UTC
|
U.S. Airlines Get Improved Access to Tokyo: Who Wins?
|
AAL
|
https://www.nasdaq.com/articles/us-airlines-get-improved-access-tokyo-who-wins-2016-03-06
|
nan
|
nan
|
Four U.S. airlines fly to Asia: American Airlines , Delta Air Lines , United Continental , and Hawaiian Holdings . In the past few years, all four have tussled repeatedly over a small number of slots reserved for U.S. carriers at Haneda Airport, the closest airport to Tokyo.
U.S. airlines have been eager to serve Tokyo's Haneda Airport. Photo: The Motley Fool.
Last month, the U.S. and Japan reached an agreement that will allow U.S. carriers to operate two more daily round-trip flights between the U.S. and Haneda Airport while enabling better flight times. As a result, the competition for Haneda slots is about to get even more heated.
Haneda hasn't been great for U.S. airlines
In 1978, Japan moved most of Tokyo's international flights from Haneda Airport to the newly constructed Narita International Airport, which is more than 30 miles from the city center. The Japanese government finally allowed flights between the U.S. and Haneda to resume -- on a very limited basis -- in 2010.
Four round-trip slots were reserved for U.S. airlines and four for Japanese carriers, with arrivals and departures permitted only between 10 p.m. and 7 a.m. Despite the restriction to nighttime arrivals and departures, American, Delta, United, and Hawaiian all applied for slots.
However, in the next five years, airlines canceled three of their Haneda routes, citing flight schedules that weren't convenient for travelers. Flights to the eastern U.S. were particularly unworkable: Delta Air Lines canceled its Detroit-Haneda flights in 2012, and American Airlines abandoned its New York-Haneda route in 2013.
American Airlines dropped its New York-Tokyo Haneda route in 2013. Photo: American Airlines.
Ironically, each time an airline canceled a Haneda route because of weak financial performance, it set off vicious competition -- usually involving at least three airlines -- over who would get to use the slot next. At times, the airlines seemed like gluttons for punishment. Of all the U.S.-Haneda routes that airlines tried, only Hawaiian Airlines' Haneda-Honolulu flights were reliably profitable.
Haneda is about to become far more lucrative
Today, American, Delta, United, and Hawaiian each hold one of the four round-trip slot pairs reserved for U.S. carriers. Their persistence in pursuing Haneda slots is about to pay off.
That's because the new agreement between the U.S. and Japan finally allows daytime arrivals and departures. U.S. airlines will now be entitled to six daily round-trip flights to Haneda, only one of which will be limited to overnight hours.
For American, Delta, and United, it will be a no-brainer to shift their Haneda flight schedules to more convenient daytime slots. Hawaiian Airlines has been doing very well with its nighttime slot, but it might still prefer to operate somewhat earlier in the evening.
Hawaiian Airlines' nighttime Haneda flights have thrived. Image source: Wikimedia Commons .
Based on the wording of the State Department press release, it appears that the four airlines currently flying to Haneda will be allowed to move their slots to the daytime hours without going through a new application process. However, there will probably be a fierce battle over the fifth daytime slot between American Airlines, Delta Air Lines, and United Continental.
As for the nighttime slot, Hawaiian Airlines will probably request it for nonstop service to Kona on Hawaii's Big Island. This proposed route has been passed over several times in recent years in favor of routes to the mainland. However, it's possible that the other airlines won't be interested in a nighttime Haneda slot once daytime operations are permitted.
Why Delta is still upset
American Airlines, United Continental, and Hawaiian Airlines all praised the agreement to improve access to Haneda Airport. Delta Air Lines wasn't pleased, though.
The reason for Delta's dismay is that it operates a small hub at Narita Airport. Delta fears that people flying to Tokyo will be less willing to fly into Narita after flights to Haneda move to more convenient times.
Delta believes daytime flights to Haneda will cannibalize traffic at Narita Airport. Photo: The Motley Fool.
Furthermore, American and United have joint ventures with the two dominant Japanese airlines. This means that they can offer plenty of connecting flights in Tokyo, whether they fly into Narita or Haneda.
Delta wanted the U.S. government to hold out for enough slots so that it could move its entire hub from Narita to Haneda Airport. This would offset the ingrained advantage that American and United have from their joint ventures. However, this was an unrealistically high "ask" from Delta.
Summing up the situation
Thus, American Airlines and United Continental are probably the two biggest beneficiaries of this policy change. They will get to move their Haneda flights to the daytime hours, which will be more convenient for travelers and enable more connections on both ends.
Hawaiian Airlines may also come out ahead if it can move its current Haneda-Honolulu route to an earlier time slot and snag the remaining nighttime slot for Haneda-Kona flights. The biggest risk is to Delta Air Lines. Even if it wins the fifth daytime slot at Haneda Airport, any profits it earns there could be more than offset by the cannibalization of its competing hub at Narita Airport.
This $19 trillion industry could destroy the Internet
One bleeding-edge technology is about to put the World Wide Web to bed. It could make early investors wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism... The Economist is calling it "transformative"... But you'll probably just call it "how I made my millions." Don't be too late to the party -- click here for one stock to own when the Web goes dark.
The article U.S. Airlines Get Improved Access to Tokyo: Who Wins? originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of Hawaiian Holdings, and United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines,, long January 2017 $30 calls on American Airlines Group, short April 2016 $38 calls on Hawaiian Holdings,, and short October 2016 $50 calls on Hawaiian Holdings, The Motley Fool is long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
Haneda is about to become far more lucrative Today, American, Delta, United, and Hawaiian each hold one of the four round-trip slot pairs reserved for U.S. carriers. Based on the wording of the State Department press release, it appears that the four airlines currently flying to Haneda will be allowed to move their slots to the daytime hours without going through a new application process. However, there will probably be a fierce battle over the fifth daytime slot between American Airlines, Delta Air Lines, and United Continental.
|
Four U.S. airlines fly to Asia: American Airlines , Delta Air Lines , United Continental , and Hawaiian Holdings . However, there will probably be a fierce battle over the fifth daytime slot between American Airlines, Delta Air Lines, and United Continental. Adam Levine-Weinberg owns shares of Hawaiian Holdings, and United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines,, long January 2017 $30 calls on American Airlines Group, short April 2016 $38 calls on Hawaiian Holdings,, and short October 2016 $50 calls on Hawaiian Holdings, The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
Four U.S. airlines fly to Asia: American Airlines , Delta Air Lines , United Continental , and Hawaiian Holdings . Why Delta is still upset American Airlines, United Continental, and Hawaiian Airlines all praised the agreement to improve access to Haneda Airport. Adam Levine-Weinberg owns shares of Hawaiian Holdings, and United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines,, long January 2017 $30 calls on American Airlines Group, short April 2016 $38 calls on Hawaiian Holdings,, and short October 2016 $50 calls on Hawaiian Holdings, The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
Ironically, each time an airline canceled a Haneda route because of weak financial performance, it set off vicious competition -- usually involving at least three airlines -- over who would get to use the slot next. Why Delta is still upset American Airlines, United Continental, and Hawaiian Airlines all praised the agreement to improve access to Haneda Airport. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
|
8052.0
|
2016-03-05 00:00:00 UTC
|
3 Reasons United Continental Stock Could Rise
|
AAL
|
https://www.nasdaq.com/articles/3-reasons-united-continental-stock-could-rise-2016-03-05
|
nan
|
nan
|
US Gulf Coast Kerosene-Type Jet Fuel Spot Price data by YCharts .
Energy prices are by their nature volatile, and so there's no assurance that United Continental will be able to count on favorable conditions lasting indefinitely. Nevertheless, the extended nature of the drop in the price of crude oil has surprised many market participants. Many investors have assumed that airlines would only be able to benefit from depressed fuel prices for a short period, and so the longer the low costs last, the greater the profits that United Continental will generate.
Rock-bottom valuations
In part because of skepticism about the sustainability of its current profits, United Continental stock trades at earnings multiples that look ridiculously low. Based on trailing earnings, United Continental's shares currently trade at a price-to-earnings ratio of just 3. That's due in large part to a one-time tax benefit that added nearly 75% to the airline's earnings in 2015, but even when you adjust for those figures, United Continental's earnings multiple remains in the 6 to 7 range. Forward multiples tell the same story, with United Continental fetching about 6 times future earnings estimates.
Those valuations aren't out of line for the industry. Delta Air Lines carries a forward earnings multiple of less than 7, and American Airlines Group has a similar forward P/E ratio of around 6. Nevertheless, what the valuations tell investors is that even if earnings do decline somewhat in the years to come, United Continental and airline peers like Delta and American will still look appealing compared to other stocks in the market.
Stock buybacks could support prices
Low valuations often spur companies to take action, and United Continental recently implemented a larger stock buyback authorization. In February, the airline said it would double its expected stock buyback during the first quarter of 2016, with new plans to spend $1.5 billion to repurchase shares. In its fourth-quarter financial report, United had said that had spent $520 million buying back shares during that quarter, leaving almost $2.5 billion remaining on its current authorization.
The $1.5 billion in repurchases for the current quarter represents roughly double the buyback volume that investors had expected. Some believe that CEO Oscar Munoz is trying to spur more dramatic action in light of the stock's poor performance over the past year, and his past history at other companies has shown Munoz's willingness to use repurchases aggressively. Nevertheless, the real question is whether United Continental can keep producing the earnings that it has brought in over the past year. Investors are skeptical, but if history proves United Continental right, then its buybacks could look prescient in time.
United Continental has seen its share price perform very well over the long run. With the help of these three factors, further gains are clearly possible if the industry environment remains as favorable as it has been for years now.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article 3 Reasons United Continental Stock Could Rise originally appeared on Fool.com.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool has the following options: long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
Many investors have assumed that airlines would only be able to benefit from depressed fuel prices for a short period, and so the longer the low costs last, the greater the profits that United Continental will generate. Nevertheless, what the valuations tell investors is that even if earnings do decline somewhat in the years to come, United Continental and airline peers like Delta and American will still look appealing compared to other stocks in the market. In its fourth-quarter financial report, United had said that had spent $520 million buying back shares during that quarter, leaving almost $2.5 billion remaining on its current authorization.
|
Rock-bottom valuations In part because of skepticism about the sustainability of its current profits, United Continental stock trades at earnings multiples that look ridiculously low. Based on trailing earnings, United Continental's shares currently trade at a price-to-earnings ratio of just 3. Stock buybacks could support prices Low valuations often spur companies to take action, and United Continental recently implemented a larger stock buyback authorization.
|
Rock-bottom valuations In part because of skepticism about the sustainability of its current profits, United Continental stock trades at earnings multiples that look ridiculously low. Nevertheless, what the valuations tell investors is that even if earnings do decline somewhat in the years to come, United Continental and airline peers like Delta and American will still look appealing compared to other stocks in the market. Stock buybacks could support prices Low valuations often spur companies to take action, and United Continental recently implemented a larger stock buyback authorization.
|
Rock-bottom valuations In part because of skepticism about the sustainability of its current profits, United Continental stock trades at earnings multiples that look ridiculously low. Stock buybacks could support prices Low valuations often spur companies to take action, and United Continental recently implemented a larger stock buyback authorization. The Motley Fool has the following options: long January 2017 $35 calls on American Airlines Group.
|
8053.0
|
2016-03-04 00:00:00 UTC
|
US Airlines Vie for Cuban Route Permit, Approval Awaited
|
AAL
|
https://www.nasdaq.com/articles/us-airlines-vie-for-cuban-route-permit-approval-awaited-2016-03-04
|
nan
|
nan
|
After the U.S. signed an aviation deal with Cuba allowing 110 scheduled flights on a daily basis to the island, almost every airline in the U.S. applied to the Department of Transportation (DOT) for the new routes schedule to Cuba. The last date for application was set at Mar 2, 2016. The U.S. DOT will review the proposals before announcing its final verdict on Mar 21, 2016.
Cuba was a popular tourist spot for Americans prior to the embargo. The short distance, a one-hour flight from Miami, also added to the attraction. In 2014, President Obama's announcement to restore diplomatic ties with Cuba, after more than five decades, has eased the travel restrictions between the nations.
Benefit to US Carriers
Popular tourist spots and beaches have always attracted visitors from the U.S. Moreover, a large chunk of the visitors to Cuba are from the U.S. who pays a visit to their families. It is believed that nearly 160,000 travelers from the U.S. visited Cuba in 2015. Thus, to cash in on the huge demand on this route, most U.S. carriers have applied to the DOT for the limited air network slots. However, the applications have surpassed the maximum slot limits by at least 19 flights per day, with requests even higher for certain days of the week, where some of the proposed routes went overlapping.
U.S. Carriers' Proposal
Leading carrier in the U.S. - American Airlines Group Inc. AAL - which has already been offering its charter service to Cuba over the years, proposed to operate 12 daily flights from three of its U.S. hubs to Havana. In addition, the carrier also plans to initiate a weekly service from two other hubs. Furthermore, the carrier has applied for eight daily flights to five other Cuban cities from Miami along with10 daily flights to Havana from the city.
On the other hand, Delta Air Lines Inc. DAL intends to operate five daily flights to Havana, two from Miami and one each from Atlanta, JFK and Orlando. Meanwhile, United Airlines - the wholly-owned subsidiary of United Continental Holdings Inc. UAL - plans to run daily flights from Newark airport to Havana, in addition to a second flight on Saturdays, and Saturday-only flights to Havana from Houston, Chicago and Washington Dulles International Airport.
One of the leading domestic carriers in the U.S., Southwest Airlines Co. LUV , placed a bid for nine daily flights to Havana. The carrier also plans to operate six, two and one flight operations from the U.S. cities of Fort Lauderdale, Tampa and Orlando.
Low-cost carrier JetBlue Airways Corp. JBLU , which has a strong presence in the Caribbean and Central American region, applied for 12 daily flights to Havana from Fort Lauderdale, Tampa and Orlando; New York's John F. Kennedy International Airport; Boston; and Newark. Also, the company plans to flag-off three daily flights from Fort Lauderdale to three lesser-known Cuban destinations.
Other ultra low-cost carriers like the Frontier Airlines and Silver Airways also proposed for numerous slots. Even Alaska Airlines applied for two daily round-trip flights from Los Angeles to Havana.
Competition Intense
The availability of limited Cuban routes will be the major drawback for the overall U.S. airline operators as it may intensify competition which may in turn lead to an ugly price war. Already the applications for flight slots to Havana have surpassed the slot limit.
Except for few airlines like American Airlines and JetBlue, other carriers need to come up with a plan to initiate operations to Cuba. Moreover, airport facilities across Cuba are another matter of concern.
Despite these headwinds, the restoration of diplomatic ties with Cuba will certainly benefit the overall U.S. airline industry and also mend the ties between the nations to some extent.
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 >>
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 AIR (LUV): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
AMER AIRLINES (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.
|
U.S. Carriers' Proposal Leading carrier in the U.S. - American Airlines Group Inc. AAL - which has already been offering its charter service to Cuba over the years, proposed to operate 12 daily flights from three of its U.S. hubs to Havana. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. In 2014, President Obama's announcement to restore diplomatic ties with Cuba, after more than five decades, has eased the travel restrictions between the nations.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. U.S. Carriers' Proposal Leading carrier in the U.S. - American Airlines Group Inc. AAL - which has already been offering its charter service to Cuba over the years, proposed to operate 12 daily flights from three of its U.S. hubs to Havana. Low-cost carrier JetBlue Airways Corp. JBLU , which has a strong presence in the Caribbean and Central American region, applied for 12 daily flights to Havana from Fort Lauderdale, Tampa and Orlando; New York's John F. Kennedy International Airport; Boston; and Newark.
|
U.S. Carriers' Proposal Leading carrier in the U.S. - American Airlines Group Inc. AAL - which has already been offering its charter service to Cuba over the years, proposed to operate 12 daily flights from three of its U.S. hubs to Havana. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Meanwhile, United Airlines - the wholly-owned subsidiary of United Continental Holdings Inc. UAL - plans to run daily flights from Newark airport to Havana, in addition to a second flight on Saturdays, and Saturday-only flights to Havana from Houston, Chicago and Washington Dulles International Airport.
|
U.S. Carriers' Proposal Leading carrier in the U.S. - American Airlines Group Inc. AAL - which has already been offering its charter service to Cuba over the years, proposed to operate 12 daily flights from three of its U.S. hubs to Havana. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. In 2014, President Obama's announcement to restore diplomatic ties with Cuba, after more than five decades, has eased the travel restrictions between the nations.
|
8054.0
|
2016-03-01 00:00:00 UTC
|
Better Buy: Delta Air Lines, Inc. vs. American Airlines
|
AAL
|
https://www.nasdaq.com/articles/better-buy-delta-air-lines-inc-vs-american-airlines-2016-03-01
|
nan
|
nan
|
Who's the best buy in airline stocks today? Here's a hint. Image source: Boeing .
With oil prices in the tank, and jet fuel costing just pennies on the dollar compared to what it used to cost, you'd think American airlines would be ultra-profitable, and American Airlines stock cheap from a valuation perspective.
You'd be right.
Delta Air Lines earned more than $4.5 billion in net profits last year. American Airlines Group did even better, raking in $7.6 billion in profits. Despite rolling in the dough, though, both of these stocks are getting rolled by investors. Delta shares are actually down over the past year, for example. And over the past 52 weeks, American Airlines stock is down, too -- 22%!
Of course, for opportunistic investors, all of this is good news. If you agree that low oil prices are going to hang around for a good long while, allowing airlines to continue earning beaucoup bucks, this all gives us the opportunity to profit handsomely from buying cheap airline stocks. But which one is the better buy? Delta Air Lines or American Airlines?
Let's take a look.
Delta Air Lines
Priced at just 8 times trailing earnings today, and expected to grow profits so fast that its forward P/E will fall to 6.3, Delta Air Lines stock looks undeniably cheap. The stock's growing like a weed, with analysts quoted on S&P Global Market Intelligence predicting long-term earnings growth of 27% annually over the next five years.
Perhaps best of all for investors who like to earn an income from their stocks, Delta Air Lines pays one of the best dividends in the business, a thumping 1.3% annually.
American Airlines
And yet, as good as Delta looks, American Airlines looks even better. American's trailing P/E ratio of 3.3 is less than half what Delta costs. American's dividend yield is 1.1% -- perfectly respectable, and not that far behind Delta.
Growth-wise, you could argue that the 9% rate of earnings growth analysts are looking for from American Airlines is slower than Delta's 27% -- because it is. On the other hand, you could also argue that 9% is a much more realistic rate of growth to expect from a large, mature business like an international airline. And you could argue that with everyone expecting "only" 9% growth out of American, the stock stands a better chance of surprising investors with better-than-expected growth -- because it does!
Deciding factor
When you get right down to it, though, that uncertainty about the future tells me that between these two stocks, Delta is still the better buy. Whether you're talking earnings, growth in earnings, or the future of oil prices in 2016 and beyond , the future's uncertain -- but one thing is clear...
When you're investing in a stock, safer is often better. And to my Foolish eye, it's much safer to invest in a company that carries modest debt than to buy a stock that's deep in hock. Currently, Delta carries a debt load of $8.6 billion, which is a whole lot more than nothing. On the other hand, Delta also has $3.4 billion in cash on the books, and at last report, it was generating nearly $5 billion in new free cash flow annually. Theoretically, at least, Delta has the ability to wipe out nearly all of its debt load in just one year's time, if it were so inclined.
You can't say the same thing about American Airlines. American hasn't yet reported its full-year 2015 free cash flow, but over the three quarters of 2015 it has reported on, FCF totaled just $1.4 billion. That's a nice improvement over the company's more recent record of burning cash in every year for the past five years (according to S&P Global Market Intelligence data). But even so, it's not enough money to make much of a dent in American Airlines' monster $20.6 billion debt load.
Even assuming American maintains its current rate of cash production, and netting out the company's $6.2 billion in cash already accumulated, this airline has so much debt already that it would take the company more than seven years to pay it all back at current rates of cash production. To me, that makes American Airlines a significantly riskier stock to own -- and it makes Delta Air Lines the better buy.
The next billion-dollar iSecret
The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early, in-the-know investors! To be one of them, just click here .
The article Better Buy: Delta Air Lines, Inc. vs. American Airlines originally appeared on Fool.com.
Fool contributorRich Smith does not own shares of, nor is he short, any company named above. You can find him onMotley Fool CAPS, publicly pontificating under the handleTMFDitty, where he's currently ranked No. 256 out of more than 75,000 rated members.Rich's opinion notwithstanding, The Motley Fool has the following options: long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
The stock's growing like a weed, with analysts quoted on S&P Global Market Intelligence predicting long-term earnings growth of 27% annually over the next five years. Perhaps best of all for investors who like to earn an income from their stocks, Delta Air Lines pays one of the best dividends in the business, a thumping 1.3% annually. And to my Foolish eye, it's much safer to invest in a company that carries modest debt than to buy a stock that's deep in hock.
|
Delta Air Lines earned more than $4.5 billion in net profits last year. Delta Air Lines Priced at just 8 times trailing earnings today, and expected to grow profits so fast that its forward P/E will fall to 6.3, Delta Air Lines stock looks undeniably cheap. The article Better Buy: Delta Air Lines, Inc. vs. American Airlines originally appeared on Fool.com.
|
American Airlines And yet, as good as Delta looks, American Airlines looks even better. Even assuming American maintains its current rate of cash production, and netting out the company's $6.2 billion in cash already accumulated, this airline has so much debt already that it would take the company more than seven years to pay it all back at current rates of cash production. To me, that makes American Airlines a significantly riskier stock to own -- and it makes Delta Air Lines the better buy.
|
Delta Air Lines earned more than $4.5 billion in net profits last year. Delta Air Lines or American Airlines? American Airlines And yet, as good as Delta looks, American Airlines looks even better.
|
8055.0
|
2016-03-01 00:00:00 UTC
|
Walt Disney Co: Make Money With the Magic of DIS Stock
|
AAL
|
https://www.nasdaq.com/articles/walt-disney-co%3A-make-money-with-the-magic-of-dis-stock-2016-03-01
|
nan
|
nan
|
InvestorPlaceInvestorPlace - Stock Market News, Stock Advice & Trading Tips
Walt Disney Co ( DIS ) stock lost its magical touch last August and has been disappointing shareholders ever since.
At its worst the downturn delivered a 29% drubbing to Disney stock , but to be fair, the substantial giveback comes following four years of gargantuan gains quadrupling Disney's equity.
So let's be honest, long-time shareholders have little to complain about here. The late-to-the-party charlies who piled in at the $120 level on the other hand, well, they can complain away.
With the recent recovery striking stocks across the land, Disney is seeing some of its old magic return. Since bottoming on Feb. 10, Disney stock is up a respectable 10.7%. The budding rally has returned DIS to key overhead resistance creating a potential breakout play in the process. More on that in a minute.
Another development of note is the heavy volume accompanying Mickey's last plunge. The early February drop was driven in part by Disney's latest earnings announcement.
3 Stocks Primed to Deliver a Short Squeeze Pop
The large volume down day following the earning release reeks of capitulation. Nervous Nellies dumping their shares following disappointment for Disney's performance last quarter have now been shaken out of the stock.
Click to Enlarge Source: OptionsAnalytix
The subsequent sharp rebound in the Disney stock price suggests at least an intermediate-term low is in place and the bulls may well hold the upper hand here.
An obvious entry point for traders interested in wading into Disney's magical waters is the looming breakout over $97.50.
If Disney's stock price can successfully takeout this level it will be the first time such a resistance break has occurred since DIS peaked last November. Such a development would be a positive omen for the stock holders in Disney going forward.
The Disney Stock Breakout Trade
With earnings fading in the distance, demand for options has ebbed considerably. Now that option contracts are being offered up on the cheap, it's high time for some long premium plays.
Traders willing to take the aggressive route in playing for additional upside in Disney's stock could consider buying May call options.
Buy the May $95 call for $4.90 or better. The max loss is limited to the initial $4.90 debit and will be forfeited if Disney stock sits below $95 at expiration. The max gain is unlimited.
At the time of this writing Tyler Craig had no positions on any of the aforementioned securities.
More From InvestorPlace
Exxon Mobil Corporation: Add Fuel to Your Portfolio With XOM StockAmerican Airlines Group Inc: Cheap and Ready for Takeoff (AAL)Trade of the Day: Wal-Mart (WMT)
The post Walt Disney Co: Make Money With the Magic of DIS 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.
|
More From InvestorPlace Exxon Mobil Corporation: Add Fuel to Your Portfolio With XOM StockAmerican Airlines Group Inc: Cheap and Ready for Takeoff (AAL)Trade of the Day: Wal-Mart (WMT) The post Walt Disney Co: Make Money With the Magic of DIS Stock appeared first on InvestorPlace . 3 Stocks Primed to Deliver a Short Squeeze Pop The large volume down day following the earning release reeks of capitulation. Click to Enlarge Source: OptionsAnalytix The subsequent sharp rebound in the Disney stock price suggests at least an intermediate-term low is in place and the bulls may well hold the upper hand here.
|
More From InvestorPlace Exxon Mobil Corporation: Add Fuel to Your Portfolio With XOM StockAmerican Airlines Group Inc: Cheap and Ready for Takeoff (AAL)Trade of the Day: Wal-Mart (WMT) The post Walt Disney Co: Make Money With the Magic of DIS Stock appeared first on InvestorPlace . InvestorPlaceInvestorPlace - Stock Market News, Stock Advice & Trading Tips Walt Disney Co ( DIS ) stock lost its magical touch last August and has been disappointing shareholders ever since. The Disney Stock Breakout Trade With earnings fading in the distance, demand for options has ebbed considerably.
|
More From InvestorPlace Exxon Mobil Corporation: Add Fuel to Your Portfolio With XOM StockAmerican Airlines Group Inc: Cheap and Ready for Takeoff (AAL)Trade of the Day: Wal-Mart (WMT) The post Walt Disney Co: Make Money With the Magic of DIS Stock appeared first on InvestorPlace . InvestorPlaceInvestorPlace - Stock Market News, Stock Advice & Trading Tips Walt Disney Co ( DIS ) stock lost its magical touch last August and has been disappointing shareholders ever since. At its worst the downturn delivered a 29% drubbing to Disney stock , but to be fair, the substantial giveback comes following four years of gargantuan gains quadrupling Disney's equity.
|
More From InvestorPlace Exxon Mobil Corporation: Add Fuel to Your Portfolio With XOM StockAmerican Airlines Group Inc: Cheap and Ready for Takeoff (AAL)Trade of the Day: Wal-Mart (WMT) The post Walt Disney Co: Make Money With the Magic of DIS Stock appeared first on InvestorPlace . Such a development would be a positive omen for the stock holders in Disney going forward. Traders willing to take the aggressive route in playing for additional upside in Disney's stock could consider buying May call options.
|
8056.0
|
2016-03-01 00:00:00 UTC
|
Exxon Mobil Corporation: Add Fuel to Your Portfolio With XOM Stock
|
AAL
|
https://www.nasdaq.com/articles/exxon-mobil-corporation%3A-add-fuel-to-your-portfolio-with-xom-stock-2016-03-01
|
nan
|
nan
|
InvestorPlaceInvestorPlace - Stock Market News, Stock Advice & Trading Tips
Oil prices have been depressed for months. There is no denying that OPEC has a lot of control over oil prices . As a result, great energy companies like Exxon Mobil Corporation ( XOM ) have suffered tremendously.
Although there are many levered energy businesses that are broken companies, XOM is only a broken stock. It has a healthy balance sheet and will emerge stronger once this artificial pressure on oil prices abates.
Click to Enlarge Short term, I see extreme technical price tension in crude oil. This is likely to resolve itself with a big move - though in which direction is unknown. Recent prices rose sharply, setting higher lows and knocking on an important pivot point.
I am of the opinion that OPEC is not yet done inflicting damage on western oil producers, so I am willing to bet that the breakout fails and crude price falls. If that happens, the Exxon stock price will suffer.
5 of Warren Buffett's Best Stocks to Buy and Hold
Technically, Exxon's price pattern is also at an important midterm pivot point. Losing it could invite more sellers. So I want to short XOM stock mid-term, but without spending any out-of-pocket money.
The Exxon Mobil Trade
Click to Enlarge I can accomplish this using three separate trades concurrently:
Trade 1: I buy the XOM April $77.50 put. This is a bearish trade for which I pay $1.80 per contract. Trade 2: I also buy the XOM March $79.50 put. For this I pay an additional $1.40 per contract. The combined expense for trades one and two is my max loss. I chose close-to-the-money puts, so I only need to guess direction of the move. If I go cheaper and lower from current price, I would need to not only guess direction but also the magnitude of the move. Owning close-to-the-money puts means that I stand to win if Exxon stock price falls even by a small fraction. I broke up the risk associated with owning the puts by spreading them across two months. Trade 3: In order to increase my chances of profit, I sell the XOM January 2017 $67.50 put. For this, I collect $3.25 per contract. Although this is a credit to my account, it opens a potential liability, thereby requiring margin against it. If Exxon Mobil falls below $67.50 while I am short that put, I could be obligated to buy 100 shares of the stock for each put sold.
Overall, the three trades' net effect is a net credit of five cents per contract. Ideally, for max gains, I want Exxon stock to fall in March and April by about $13 per share, or about 16% from current prices. If I am wrong and XOM rallies from here, I lose nothing since I get paid to deploy the trade. If my assumptions change, I can close, change or add to any portion of this strategy at any point to adjust.
Options are risky, especially when selling puts. I only sell puts if I am willing to own the stock at the put strike sold.
In this case I think that there are worse things than owning Exxon Mobil stock at a 16% discount from current levels.
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.
More From InvestorPlace
7 Mining and Materials Stocks That Could Gain 15%-150%American Airlines Group Inc: Cheap and Ready for Takeoff (AAL)10 Best Stocks to Buy for a Quick Pop
The post Exxon Mobil Corporation: Add Fuel to Your Portfolio With XOM 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.
|
More From InvestorPlace 7 Mining and Materials Stocks That Could Gain 15%-150%American Airlines Group Inc: Cheap and Ready for Takeoff (AAL)10 Best Stocks to Buy for a Quick Pop The post Exxon Mobil Corporation: Add Fuel to Your Portfolio With XOM Stock appeared first on InvestorPlace . I am of the opinion that OPEC is not yet done inflicting damage on western oil producers, so I am willing to bet that the breakout fails and crude price falls. 5 of Warren Buffett's Best Stocks to Buy and Hold Technically, Exxon's price pattern is also at an important midterm pivot point.
|
More From InvestorPlace 7 Mining and Materials Stocks That Could Gain 15%-150%American Airlines Group Inc: Cheap and Ready for Takeoff (AAL)10 Best Stocks to Buy for a Quick Pop The post Exxon Mobil Corporation: Add Fuel to Your Portfolio With XOM Stock appeared first on InvestorPlace . As a result, great energy companies like Exxon Mobil Corporation ( XOM ) have suffered tremendously. 5 of Warren Buffett's Best Stocks to Buy and Hold Technically, Exxon's price pattern is also at an important midterm pivot point.
|
More From InvestorPlace 7 Mining and Materials Stocks That Could Gain 15%-150%American Airlines Group Inc: Cheap and Ready for Takeoff (AAL)10 Best Stocks to Buy for a Quick Pop The post Exxon Mobil Corporation: Add Fuel to Your Portfolio With XOM Stock appeared first on InvestorPlace . The Exxon Mobil Trade Click to Enlarge I can accomplish this using three separate trades concurrently: Trade 1: I buy the XOM April $77.50 put. If Exxon Mobil falls below $67.50 while I am short that put, I could be obligated to buy 100 shares of the stock for each put sold.
|
More From InvestorPlace 7 Mining and Materials Stocks That Could Gain 15%-150%American Airlines Group Inc: Cheap and Ready for Takeoff (AAL)10 Best Stocks to Buy for a Quick Pop The post Exxon Mobil Corporation: Add Fuel to Your Portfolio With XOM Stock appeared first on InvestorPlace . 5 of Warren Buffett's Best Stocks to Buy and Hold Technically, Exxon's price pattern is also at an important midterm pivot point. The Exxon Mobil Trade Click to Enlarge I can accomplish this using three separate trades concurrently: Trade 1: I buy the XOM April $77.50 put.
|
8057.0
|
2016-03-01 00:00:00 UTC
|
American Airlines Group Inc: Cheap and Ready for Takeoff (AAL)
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-group-inc%3A-cheap-and-ready-for-takeoff-aal-2016-03-01
|
nan
|
nan
|
InvestorPlace InvestorPlace - Stock Market News, Stock Advice & Trading Tips
After struggling through a tough January, shares of American Airlines Group Inc ( AAL ) finally broke out of the downtrend and look poised to head higher.
Click to Enlarge AAL stock made a new recent low on Feb. 8 at $34.76, but rebounded sharply. AAL rose back above the $37.50 support area and also broke the downtrend at $38.53. This upside breakout of a wedge pattern is bullish, and I expect AAL stock to continue higher over the next few months from a technical perspective.
Fundamentally, American Airlines trades at a big discount on a valuation basis to its peers. AAL stock carries only a 3.7 price-to-earnings ratio compared to an 8.6 P/E for Delta Air Lines, Inc. ( DAL ) and a 12.8 P/E for Southwest Airlines Co ( LUV ).
5 of Warren Buffett's Best Stocks to Buy and Hold
While some of this discount is attributable to a greater debt load for AAL, the company still has $6.9 billion in cash and short-term investments on the balance sheet following record earnings.
Click to Enlarge I look for this valuation gap to narrow, with American stock being a relative outperformer to its peers.
The options market is positioning for some upside in American Airlines stock, with large repeated call buying. Of particular note were the 16,711 March $42 calls that traded on Feb. 19, versus only 1,413 open interest. Since that time, there has been additional buying across several strikes in March, as a large player builds a position.
The AAL Stock Trade
Click to Enlarge This type of big, repeated buying many times is a precursor to further upside in the stock. I want to follow along with this big call buyer, but defray some of my cost and risk, by going long a call spread.
Specifically, I would look to go long the AAL April $42 calls and short the AAL April $45 calls for a $1.10 net debit. These are the regular monthly options that expire on April 15. The short $45 strike is positioned just below the major technical resistance level of $47.
The maximum risk on the trade is $110 per spread, with a maximum gain of $190 per spread. The maximum loss is realized if AAL stock closes below $42 on April expiration, while the maximum gain is achieved if AAL stock is above $45 on April expiration.
I would look to revisit the position after March's monthly expiration and make any necessary adjustments, either taking partial profits or trimming out some losses.
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 tbiggam@deltaderivatives.com.
More From InvestorPlace
7 Mining and Materials Stocks That Could Gain 15%-150%7 'World-Class Brand' Stocks to Buy for 201610 Best Stocks to Buy for a Quick Pop
The post American Airlines Group Inc: Cheap and Ready for Takeoff (AAL) 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.
|
This upside breakout of a wedge pattern is bullish, and I expect AAL stock to continue higher over the next few months from a technical perspective. AAL stock carries only a 3.7 price-to-earnings ratio compared to an 8.6 P/E for Delta Air Lines, Inc. ( DAL ) and a 12.8 P/E for Southwest Airlines Co ( LUV ). 5 of Warren Buffett's Best Stocks to Buy and Hold While some of this discount is attributable to a greater debt load for AAL, the company still has $6.9 billion in cash and short-term investments on the balance sheet following record earnings.
|
The AAL Stock Trade Click to Enlarge This type of big, repeated buying many times is a precursor to further upside in the stock. Specifically, I would look to go long the AAL April $42 calls and short the AAL April $45 calls for a $1.10 net debit. InvestorPlace InvestorPlace - Stock Market News, Stock Advice & Trading Tips After struggling through a tough January, shares of American Airlines Group Inc ( AAL ) finally broke out of the downtrend and look poised to head higher.
|
InvestorPlace InvestorPlace - Stock Market News, Stock Advice & Trading Tips After struggling through a tough January, shares of American Airlines Group Inc ( AAL ) finally broke out of the downtrend and look poised to head higher. The maximum loss is realized if AAL stock closes below $42 on April expiration, while the maximum gain is achieved if AAL stock is above $45 on April expiration. More From InvestorPlace 7 Mining and Materials Stocks That Could Gain 15%-150%7 'World-Class Brand' Stocks to Buy for 201610 Best Stocks to Buy for a Quick Pop The post American Airlines Group Inc: Cheap and Ready for Takeoff (AAL) appeared first on InvestorPlace .
|
The AAL Stock Trade Click to Enlarge This type of big, repeated buying many times is a precursor to further upside in the stock. Specifically, I would look to go long the AAL April $42 calls and short the AAL April $45 calls for a $1.10 net debit. InvestorPlace InvestorPlace - Stock Market News, Stock Advice & Trading Tips After struggling through a tough January, shares of American Airlines Group Inc ( AAL ) finally broke out of the downtrend and look poised to head higher.
|
8058.0
|
2016-02-29 00:00:00 UTC
|
Is Delta Air Lines, Inc. Fudging Its Pension Costs?
|
AAL
|
https://www.nasdaq.com/articles/delta-air-lines-inc-fudging-its-pension-costs-2016-02-29
|
nan
|
nan
|
Among the three largest U.S. airlines, Delta Air Lines has the lowest debt burden . However, it has large unfunded pension liabilities on its balance sheet. Delta's pension underfunding is dramatically greater than that of United Continental , and also significantly worse than that of American Airlines .
Despite Delta's underfunded pension status, the company hasn't been reporting especially large pension costs in its earnings: less than $250 million in each of the last two years. That's because Delta is projecting a high rate of return on its pension fund assets -- perhaps unrealistically high. If so, it means that Delta's true earnings power is a little lower than it seems.
Delta's pension liability tops $10 billion
At the end of 2015, Delta's total pension liability for its defined benefit plans totaled $20.6 billion. Meanwhile, its pension fund held assets worth $9.4 billion, leaving a shortfall of about $11.2 billion.
Delta's pension plan is underfunded by more than $10 billion. Photo: The Motley Fool
American Airlines also has some catching up to do for its pension fund, but it is in better shape than Delta. At the end of 2015, it had a gross pension obligation of $16.4 billion and $9.7 billion of pension fund assets, leaving it with a $6.7 billion deficit.
By contrast, United Continental dumped most of its pension liabilities in the bankruptcy process many years ago. As a result, it finished 2015 with a comparatively modest $4.5 billion pension obligation and $3.0 billion in its pension fund, leaving it only $1.5 billion underfunded.
Expecting strong investment returns
To calculate the annual cost of its pension program, a company must estimate both the growth of its pension liabilities and the expected growth of its pension assets (among other things). The higher the expected rate of return on a company's pension assets, the lower its reported pension costs.
For the past few years, Delta has been assuming an 8.94% long-term rate of return on its pension assets.
This seems unrealistically high. Many investors would be thrilled to get a 9% annual return after fees from investing in the stock market. Moreover, Delta only invests 40%-50% of its pension fund in "growth-seeking assets", with the remainder split between "income-generating assets" and "risk-diversifying assets". Those latter categories are likely to produce lower returns on average.
Of course, this doesn't mean that it's impossible to earn returns of this magnitude in any given year. In 2012 and 2013, when the stock market was booming, Delta's pension plan returned 10% and 11%, respectively. However, the plan gained just 6.2% in 2014, before posting a -1.4% return last year.
American Airlines and United Continental both use lower expected returns to calculate their pension costs. American Airlines currently has an 8.00% long-term expected return. The comparable figure for United is 7.40%.
Why it matters
In its recent annual report, Delta stated that a 0.50% change in the expected long-term return on its pension assets would impact its net income by $50 million. Using United's more conservative 7.40% expected return figure would reduce net income by a much greater amount: likely about $150 million.
Delta earned an adjusted pre-tax profit of $5.9 billion last year. A $150 million reduction in its pre-tax income certainly wouldn't be a game changer for investors, but it's not peanuts, either.
While the expected return on pension assets determines how much pension expense Delta reports, the actual investment returns determine how much money it has to put into its pension fund. In 2015, Delta contributed $1.2 billion to its pension plan, which barely offset the fund's investment losses and payments to retirees. In the first two months of 2016, Delta has already contributed another $1.2 billion to its pensions.
In effect, below-target investment gains have forced Delta to make extra contributions in 2015 and 2016 beyond the $1 billion in annual pension funding it has touted to investors. To avoid further unwelcome surprises like this, Delta needs to adopt more realistic investment goals for its pension fund.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early-in-the-know investors! To be one of them, just click here .
The article Is Delta Air Lines, Inc. Fudging Its Pension Costs? originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
Why it matters In its recent annual report, Delta stated that a 0.50% change in the expected long-term return on its pension assets would impact its net income by $50 million. In 2015, Delta contributed $1.2 billion to its pension plan, which barely offset the fund's investment losses and payments to retirees. In effect, below-target investment gains have forced Delta to make extra contributions in 2015 and 2016 beyond the $1 billion in annual pension funding it has touted to investors.
|
The higher the expected rate of return on a company's pension assets, the lower its reported pension costs. While the expected return on pension assets determines how much pension expense Delta reports, the actual investment returns determine how much money it has to put into its pension fund. Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group.
|
Delta's pension liability tops $10 billion At the end of 2015, Delta's total pension liability for its defined benefit plans totaled $20.6 billion. Expecting strong investment returns To calculate the annual cost of its pension program, a company must estimate both the growth of its pension liabilities and the expected growth of its pension assets (among other things). While the expected return on pension assets determines how much pension expense Delta reports, the actual investment returns determine how much money it has to put into its pension fund.
|
Despite Delta's underfunded pension status, the company hasn't been reporting especially large pension costs in its earnings: less than $250 million in each of the last two years. The higher the expected rate of return on a company's pension assets, the lower its reported pension costs. American Airlines and United Continental both use lower expected returns to calculate their pension costs.
|
8059.0
|
2016-02-26 00:00:00 UTC
|
United Continental Accelerates Its Buyback Plans
|
AAL
|
https://www.nasdaq.com/articles/united-continental-accelerates-its-buyback-plans-2016-02-26
|
nan
|
nan
|
As the least profitable of the three largest U.S. airlines, United Continental has been relatively cautious about returning cash to shareholders. For example, unlike its peers Delta Air Lines and American Airlines , United currently doesn't pay a dividend.
Brent Crude Oil Spot Price . Data by YCharts .
This caused profitability to soar. In fact, United Continental's pre-tax earnings nearly doubled in 2014 and more than doubled in 2015, growing from $1.0 billion to $4.5 billion during that time span.
Rising earnings freed up more cash for United to execute its share repurchase program. During the second half of 2014, it spent $320 million on share repurchases. It bought back another $450 million of stock during the first half of 2015. As a result, United announced in July 2015 that the board had authorized a new $3 billion share repurchase program, running through the end of 2017.
United completed the original buyback shortly thereafter, and by the end of 2015, it had also spent $552 million toward the new $3 billion share repurchase authorization.
Time for even more buybacks
In total, United Continental spent $1.2 billion on share buybacks during 2015, repurchasing 21 million shares, or a little more than 5% of its outstanding stock.
That pales in comparison to American Airlines' buyback activity. During 2015, American Airlines (which is roughly the same size as United) spent $3.6 billion on share buybacks, repurchasing 85.1 million shares, or roughly 12% of its outstanding stock.
American Airlines CEO Doug Parker has reasoned that with airline profits at an all-time high and interest rates near record lows, it makes sense to borrow money for airplane purchases while using much of the company's cash flow for buybacks.
American Airlines has devoted a lot of cash to share buybacks lately. Image source: American Airlines.
United's management isn't taking such a hard-line position. However, United Continental stock is just as cheap as American Airlines stock -- both companies trade for just 6 times projected 2016 earnings. Furthermore, United's capital spending is much lower, so it is producing substantially more free cash flow than American Airlines.
This led CFO Gerry Laderman to predict during United's Q4 earnings call last month that the company would buy back $750 million of stock in the first quarter alone. Last week, United went further, stating in a regulatory filing that it now plans to repurchase $1.5 billion of stock during Q1 and complete the entire $3 billion buyback by the second half of 2016.
While United stock has been very volatile in the past year -- and even more so since the recent buyback announcement -- at current prices, United would repurchase more than 7% of its shares in Q1 alone and at least 12% of its shares this year.
This will provide a meaningful lift to earnings per share. With United Continental's underlying pre-tax profit also likely to grow (albeit modestly) in 2016, rising buyback activity should create substantial value for long-term investors.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article United Continental Accelerates Its Buyback Plans originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
For example, unlike its peers Delta Air Lines and American Airlines , United currently doesn't pay a dividend. This led CFO Gerry Laderman to predict during United's Q4 earnings call last month that the company would buy back $750 million of stock in the first quarter alone. With United Continental's underlying pre-tax profit also likely to grow (albeit modestly) in 2016, rising buyback activity should create substantial value for long-term investors.
|
Time for even more buybacks In total, United Continental spent $1.2 billion on share buybacks during 2015, repurchasing 21 million shares, or a little more than 5% of its outstanding stock. During 2015, American Airlines (which is roughly the same size as United) spent $3.6 billion on share buybacks, repurchasing 85.1 million shares, or roughly 12% of its outstanding stock. Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group.
|
Time for even more buybacks In total, United Continental spent $1.2 billion on share buybacks during 2015, repurchasing 21 million shares, or a little more than 5% of its outstanding stock. During 2015, American Airlines (which is roughly the same size as United) spent $3.6 billion on share buybacks, repurchasing 85.1 million shares, or roughly 12% of its outstanding stock. While United stock has been very volatile in the past year -- and even more so since the recent buyback announcement -- at current prices, United would repurchase more than 7% of its shares in Q1 alone and at least 12% of its shares this year.
|
Time for even more buybacks In total, United Continental spent $1.2 billion on share buybacks during 2015, repurchasing 21 million shares, or a little more than 5% of its outstanding stock. American Airlines has devoted a lot of cash to share buybacks lately. The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
8060.0
|
2016-02-25 00:00:00 UTC
|
Delta Air Lines Receives Vote of Confidence from Moody's
|
AAL
|
https://www.nasdaq.com/articles/delta-air-lines-receives-vote-of-confidence-from-moodys-2016-02-25
|
nan
|
nan
|
Good news for Atlanta, GA-based Delta Air Lines Inc.DAL ! Moody's Investors Service, the rating services arm of Moody's Corp. MCO , has unveiled its bullish view on the carrier.
US-based carriers, including Delta, are in the pink of health with oil prices continuously plunging since mid-20Array4. Crude prices are currently hovering around the $30-a-barrel mark. This represents a significant decline from the approximately $Array05 per barrel witnessed in Jul 20Array4. The fall in oil prices has resulted in massive savings for carriers as fuel costs account for a significant chunk of an airline's operating expenses. Delta stated last month, while unveiling its fourth quarter and full-year 20Array5 results that it expects to generate over $3 billion savings in 20Array6 due to weak oil prices. The carrier recorded a whopping $5.9 billion in pre-tax profit (on an adjusted basis) in 20Array5, thanks to soft oil prices.
Moody's, however, believes that Delta is well-equipped to handle the situation even if fuel prices move up, thereby denying Delta the opportunity to save the projected amount. Moody's is also highly impressed by Delta's efforts to reduce its debt levels. The carrier exited 20Array5 with net debt (on an adjusted basis) of $6.7 billion, reflecting a more than $Array0 billion reduction since 2009. Interest expenses have consequently come down significantly. The carrier recorded $35 million in interest savings in the final quarter of 20Array5 on a year-over-year basis.
Moody's believes interest expenses will drop further at Delta as it is expected to continue with its debt reduction strategy. This should help mitigate the pressure on the bottom line and operating cash flow, in the event of oil prices moving north. Moody's bullish view on Delta comes close on the heels of the company upgrading the airline behemoth's senior unsecured rating to Baa3 from Ba3. The outlook for the rating was stable. The upgradation, which should facilitate Delta's access to loans at lower interest rates, was announced on Feb ArrayArray, 20Array6. We note that Delta's peers, namely United Continental Holdings Inc. UAL and American Airlines Group Inc. AAL , have a lower junk grade status, which was also held by Delta, prior to the upgrade.
Zacks Rank
Delta Air Lines currently sports a Zacks Rank #Array (Strong Buy). Investors interested in the airline space may also consider Hawaiian Holdings Inc. HA , which too carries a Zacks Rank #Array.
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 >>
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 (DAL): Free Stock Analysis Report
HAWAIIAN HLDGS (HA): Free Stock Analysis Report
MOODYS CORP (MCO): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
AMER AIRLINES (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.
|
We note that Delta's peers, namely United Continental Holdings Inc. UAL and American Airlines Group Inc. AAL , have a lower junk grade status, which was also held by Delta, prior to the upgrade. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report MOODYS CORP (MCO): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The fall in oil prices has resulted in massive savings for carriers as fuel costs account for a significant chunk of an airline's operating expenses.
|
Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report MOODYS CORP (MCO): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. We note that Delta's peers, namely United Continental Holdings Inc. UAL and American Airlines Group Inc. AAL , have a lower junk grade status, which was also held by Delta, prior to the upgrade. Moody's Investors Service, the rating services arm of Moody's Corp. MCO , has unveiled its bullish view on the carrier.
|
Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report MOODYS CORP (MCO): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. We note that Delta's peers, namely United Continental Holdings Inc. UAL and American Airlines Group Inc. AAL , have a lower junk grade status, which was also held by Delta, prior to the upgrade. The fall in oil prices has resulted in massive savings for carriers as fuel costs account for a significant chunk of an airline's operating expenses.
|
We note that Delta's peers, namely United Continental Holdings Inc. UAL and American Airlines Group Inc. AAL , have a lower junk grade status, which was also held by Delta, prior to the upgrade. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report MOODYS CORP (MCO): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The fall in oil prices has resulted in massive savings for carriers as fuel costs account for a significant chunk of an airline's operating expenses.
|
8061.0
|
2016-02-24 00:00:00 UTC
|
Mining Is Feeling the Pinch
|
AAL
|
https://www.nasdaq.com/articles/mining-feeling-pinch-2016-02-24
|
nan
|
nan
|
Last week, Anglo American -- one of the largest mining companies in the world -- announced that it is halting iron ore and coal operations.
In this video segment, Sean O'Reilly, Tyler Crowe, and Taylor Muckerman talk about how this follows in the trail of the biggest players in this space recently, and what all this debt and trouble might mean for the industry.
A transcript follows the video.
The next billion-dollar iSecret
The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
This podcast was recorded on Feb. 18, 2016.
Sean O'Reilly: So, moving on to our next story, out of oil and into mining, it looks like the big guns in the mining space are basically feeling the pinch right now. A report just came out yesterday -- Anglo American is going to stop all iron ore and coal operations. What else do they do?!
Tyler Crowe: Well, Anglo, that's not their big thing. Anglo American is more of a diversified miner.
O'Reilly: Okay.
Crowe: They have a lot in platinum and copper, a couple other precious ... well, not precious, but more precious than iron ore and coal.
O'Reilly: Right, which is apparently everywhere or something. (laughs)
Crowe: And they're not a huge, huge contributor to the iron ore market, but they are one of the five largest mining companies in the world. And to see them ...
O'Reilly: Throw in the towel on two big commodities, yeah.
Crowe: And, what was it, just a few months ago, we watched Glencore almost look like they were going to go through the kind of death throes of the debt spiral. So, it's really, as we see these bigger and bigger companies starting to get into these debt issues and asset sales and to stop production and a lot of things, it's really telling as to what's going on. I mean, Rio Tinto just also mentioned that they're cutting their dividend.
O'Reilly: Who were the two --
Taylor Muckerman: And they were one of the strongest balance sheets in the business.
O'Reilly: Yeah.
Muckerman: So, that's a surprise.
Crowe: Yeah, and BHP Billiton , who has the strongest balance sheet in the business, actually had their credit rating downgraded.
O'Reilly: Wow!
Crowe: So, when you have the largest companies, the most profitable companies, seeing that, then you really know that we're ... somewhere, we have to be close to some sort of market turn on this, right?
The article Mining Is Feeling the Pinch originally appeared on Fool.com.
Sean O'Reillyhas no position in any stocks mentioned. Taylor Muckermanhas no position in any stocks mentioned.Tyler Croweowns shares of BHP Billiton Limited (ADR). The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter servicesfree for 30 days . We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
Last week, Anglo American -- one of the largest mining companies in the world -- announced that it is halting iron ore and coal operations. In this video segment, Sean O'Reilly, Tyler Crowe, and Taylor Muckerman talk about how this follows in the trail of the biggest players in this space recently, and what all this debt and trouble might mean for the industry. Crowe: Yeah, and BHP Billiton , who has the strongest balance sheet in the business, actually had their credit rating downgraded.
|
In this video segment, Sean O'Reilly, Tyler Crowe, and Taylor Muckerman talk about how this follows in the trail of the biggest players in this space recently, and what all this debt and trouble might mean for the industry. A report just came out yesterday -- Anglo American is going to stop all iron ore and coal operations. Crowe: Yeah, and BHP Billiton , who has the strongest balance sheet in the business, actually had their credit rating downgraded.
|
Last week, Anglo American -- one of the largest mining companies in the world -- announced that it is halting iron ore and coal operations. In this video segment, Sean O'Reilly, Tyler Crowe, and Taylor Muckerman talk about how this follows in the trail of the biggest players in this space recently, and what all this debt and trouble might mean for the industry. (laughs) Crowe: And they're not a huge, huge contributor to the iron ore market, but they are one of the five largest mining companies in the world.
|
In this video segment, Sean O'Reilly, Tyler Crowe, and Taylor Muckerman talk about how this follows in the trail of the biggest players in this space recently, and what all this debt and trouble might mean for the industry. Sean O'Reilly: So, moving on to our next story, out of oil and into mining, it looks like the big guns in the mining space are basically feeling the pinch right now. The Motley Fool has no position in any of the stocks mentioned.
|
8062.0
|
2016-02-22 00:00:00 UTC
|
Why Gogo Inc. Shares Jumped Today
|
AAL
|
https://www.nasdaq.com/articles/why-gogo-inc-shares-jumped-today-2016-02-22
|
nan
|
nan
|
What: Shares of Gogo jumped today, up by 11% as of 2:57 p.m. ET, after American Airlines dropped its lawsuit to switch providers.
So what: Gogo took a hit last week when American said it was considering switching to rival ViaSat for in-flight connectivity and entertainment options. At the time, Gogo assured investors that it had the opportunity to submit a competing bid and that the aircraft in question were simply using older technology.
Now what: The company was confident that it could submit a competitive bid and defend the contract. It appears that Gogo has done just that, as the company has announced that American dismissed the declaratory judgment action that it had filed. For now, Gogo has retained the lucrative partnership with the airline.
The next billion-dollar iSecret
The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article Why Gogo Inc. Shares Jumped Today originally appeared on Fool.com.
Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool has the following options: long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
So what: Gogo took a hit last week when American said it was considering switching to rival ViaSat for in-flight connectivity and entertainment options. At the time, Gogo assured investors that it had the opportunity to submit a competing bid and that the aircraft in question were simply using older technology. The next billion-dollar iSecret The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology.
|
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. The article Why Gogo Inc. Shares Jumped Today originally appeared on Fool.com.
|
At the time, Gogo assured investors that it had the opportunity to submit a competing bid and that the aircraft in question were simply using older technology. The next billion-dollar iSecret The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. The Motley Fool has the following options: long January 2017 $35 calls on American Airlines Group.
|
ET, after American Airlines dropped its lawsuit to switch providers. The article Why Gogo Inc. Shares Jumped Today originally appeared on Fool.com. The Motley Fool has the following options: long January 2017 $35 calls on American Airlines Group.
|
8063.0
|
2016-02-22 00:00:00 UTC
|
United Airlines Doubles Share Repurchase Program, Stock Up
|
AAL
|
https://www.nasdaq.com/articles/united-airlines-doubles-share-repurchase-program-stock-up-2016-02-22
|
nan
|
nan
|
United Airlines - the wholly owned subsidiary of United Continental Holdings Inc.UAL - stepped up its share buyback program from $750 million to $Array.5 billion for the first quarter of 20Array6.
Following this development, shares of United Continental rallied 3.62% and closed at $53.82 on Friday.
Last year, United Continental lost nearly 22%, just below American Airlines' Group Inc. AAL 22.5% decline. We believe that the company's widespread international presence coupled with the strengthening U.S. dollar were in the primary factors behind the decline in the share price. Moreover, the companies reported a decline in revenues in the recently concluded fourth quarter.
Hence, we believe that to counter the downward share price movement, United Airlines decided on the increased share repurchase program. In Jul 20Array5, management at the company authorized a buyback worth $3 billion, scheduled to be completed by 20Array7. However, the revised stock repurchase outlook will allow the carrier to wrap up its share buyback plan by the second half of 20Array6.
Over the last two years, most legacy carriers in the U.S. have been driving shareholders' wealth through raised dividend payments and buyback programs. Declining fuel expenses had also been a major reason behind the aggressive buyout plans.
In 20Array5, United Continental bought shares worth $Array.2 billion. The company exited 20Array5 with $5.2 billion of cash, cash equivalents and short-term investments. Hence, we believe that the repurchase of $3 billion worth of shares will not strain the company's cash position.
Zacks Rank & Other Stocks to Consider
United Continental currently carries a Zacks Rank #2 (Buy). Other favorably ranked stocks in the same space are Hawaiian Holdings Inc. HA and Southwest Airlines Co. LUV . Both the companies sport a Zacks Rank #Array (Strong Buy).
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 >>
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 AIR (LUV): Free Stock Analysis Report
HAWAIIAN HLDGS (HA): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
AMER AIRLINES (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.
|
Last year, United Continental lost nearly 22%, just below American Airlines' Group Inc. AAL 22.5% decline. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. We believe that the company's widespread international presence coupled with the strengthening U.S. dollar were in the primary factors behind the decline in the share price.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Last year, United Continental lost nearly 22%, just below American Airlines' Group Inc. AAL 22.5% decline. Other favorably ranked stocks in the same space are Hawaiian Holdings Inc. HA and Southwest Airlines Co. LUV .
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Last year, United Continental lost nearly 22%, just below American Airlines' Group Inc. AAL 22.5% decline. United Airlines - the wholly owned subsidiary of United Continental Holdings Inc.UAL - stepped up its share buyback program from $750 million to $Array.5 billion for the first quarter of 20Array6.
|
Last year, United Continental lost nearly 22%, just below American Airlines' Group Inc. AAL 22.5% decline. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. United Airlines - the wholly owned subsidiary of United Continental Holdings Inc.UAL - stepped up its share buyback program from $750 million to $Array.5 billion for the first quarter of 20Array6.
|
8064.0
|
2016-02-21 00:00:00 UTC
|
U.S. Airlines Scramble for Cuba Flights
|
AAL
|
https://www.nasdaq.com/articles/us-airlines-scramble-cuba-flights-2016-02-21
|
nan
|
nan
|
Last Tuesday, the U.S. and Cuba signed an historic agreement allowing scheduled flights between the two countries to resume after more than 50 years. This follows the renewal of diplomatic ties between the two countries last summer.
U.S. airlines are competing for rights to operate scheduled service to Cuba.
Travelers still need to certify that they qualify for one of a dozen "approved" categories to visit Cuba -- tourism is still officially banned. Yet airlines anticipate a rapid increase in demand for flights to Cuba.
As a result, the five largest U.S. airlines -- American Airlines , Delta Air Lines , United Continental , Southwest Airlines , and JetBlue Airways -- are now fighting to secure the rights for new flights to Cuba. Let's take a look at how this battle may play out.
It's all about Havana
The U.S.-Cuba agreement allows U.S. carriers to fly up to 20 daily scheduled roundtrip flights from the U.S. to Havana, as well as up to 10 flights to each of Cuba's nine other international airports.
Some airlines will likely be interested in flying to Cuba's secondary airports. American Airlines has a major hub in Miami, home to a large Cuban-American community and just a few hundred miles from Cuba. JetBlue has a sizable focus city nearby in Fort Lauderdale. Both airlines could likely support flights from South Florida to secondary airports in Cuba to serve the "visiting friends and relatives" market.
American Airlines will likely become a major player in Cuba. Image source: American Airlines.
By contrast, in their press releases discussing the U.S.-Cuba air service agreement, Delta Air Lines and United Continental only mentioned filing for flights to Havana. (Southwest Airlines may also stick to Havana flights at first, though that's not certain.)
Due to the relatively modest demand for flights from the U.S. to Cuba's smaller airports, airlines don't necessarily need to file to operate these flights right away. There should be route authorities available for these airports after the initial allocation, allowing airlines to wait and see how demand shapes up.
By contrast, as Cuba's capital and largest city (by far), Havana should see strong flight demand almost from day one. As a result, airlines are likely to aim high as they apply for flights to Havana.
What will the airlines request?
Based on their strong positions in South Florida, American Airlines and JetBlue will probably request permission to operate multiple daily flights to Havana from Miami and Fort Lauderdale, respectively.
The New York City metro area has the second largest Cuban-American population in the U.S. (Of course, it is also the largest city in the country.) Delta, United, American, and JetBlue all have hubs in the New York area. There is a good chance that all four will request permission to operate one or more daily flights from New York to Havana.
JetBlue will likely seek authority for multiple routes to Cuba. Image source: JetBlue Airways.
Additionally, Delta Air Lines will certainly request permission to fly to Havana from its largest hub in Atlanta. American Airlines will also probably want to fly to Havana from its No. 1 hub at Dallas-Fort Worth International Airport. It may also consider applying for routes from its hubs in Charlotte, Philadelphia, and Chicago.
United Continental may file for route authorities to Havana from its hubs in Houston, Washington, D.C., and Chicago. JetBlue may request flights to its Orlando focus city -- and perhaps also Boston -- in addition to Fort Lauderdale and New York.
Southwest is the big wild card
Southwest Airlines' plans for Cuba are a big open question. The carrier only began flying beyond the U.S. a few years ago, following its merger with AirTran, and it is still in the early stages of its international expansion. However, due to its broadly distributed route network, Southwest could potentially support flights to Havana from numerous markets.
Southwest has identified Baltimore-Washington, Houston, and Fort Lauderdale as its key international gateways. Thus, it wouldn't be surprising to see it request flight allocations from all three markets to Havana. (This is complicated by the fact that Southwest's international terminal in Fort Lauderdale won't be ready until late 2017, at best.)
Southwest could potentially support flights to Cuba from several cities.
However, Southwest also has a large presence in other cities in the Southeast, including Atlanta, Orlando, and Tampa. It could potentially request route authorities from those cities in order to gain a first-mover advantage in the one Caribbean market where it isn't playing from behind. Finally, Southwest may be interested in flying to Havana from Chicago, its largest focus city.
Considering all of the players and all of the possible route opportunities, it seems likely that the 20 available roundtrip flights to Havana will not be nearly enough to meet the airlines' requests. That means the Department of Transportation will play a big role in determining which airlines will win and which ones will lose from the opening of the Cuban market.
The next billion-dollar iSecret
The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article U.S. Airlines Scramble for Cuba Flights originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of JetBlue Airways and United Continental Holdings, and is long Jan. 2017 $17 calls on JetBlue Airways, long Jan. 2017 $40 calls on Delta Air Lines, Inc., and long Jan. 2017 $30 calls on American Airlines Group. The Motley Fool is long Jan. 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
Both airlines could likely support flights from South Florida to secondary airports in Cuba to serve the "visiting friends and relatives" market. Based on their strong positions in South Florida, American Airlines and JetBlue will probably request permission to operate multiple daily flights to Havana from Miami and Fort Lauderdale, respectively. That means the Department of Transportation will play a big role in determining which airlines will win and which ones will lose from the opening of the Cuban market.
|
As a result, the five largest U.S. airlines -- American Airlines , Delta Air Lines , United Continental , Southwest Airlines , and JetBlue Airways -- are now fighting to secure the rights for new flights to Cuba. Based on their strong positions in South Florida, American Airlines and JetBlue will probably request permission to operate multiple daily flights to Havana from Miami and Fort Lauderdale, respectively. Adam Levine-Weinberg owns shares of JetBlue Airways and United Continental Holdings, and is long Jan. 2017 $17 calls on JetBlue Airways, long Jan. 2017 $40 calls on Delta Air Lines, Inc., and long Jan. 2017 $30 calls on American Airlines Group.
|
As a result, the five largest U.S. airlines -- American Airlines , Delta Air Lines , United Continental , Southwest Airlines , and JetBlue Airways -- are now fighting to secure the rights for new flights to Cuba. It's all about Havana The U.S.-Cuba agreement allows U.S. carriers to fly up to 20 daily scheduled roundtrip flights from the U.S. to Havana, as well as up to 10 flights to each of Cuba's nine other international airports. Based on their strong positions in South Florida, American Airlines and JetBlue will probably request permission to operate multiple daily flights to Havana from Miami and Fort Lauderdale, respectively.
|
As a result, the five largest U.S. airlines -- American Airlines , Delta Air Lines , United Continental , Southwest Airlines , and JetBlue Airways -- are now fighting to secure the rights for new flights to Cuba. It's all about Havana The U.S.-Cuba agreement allows U.S. carriers to fly up to 20 daily scheduled roundtrip flights from the U.S. to Havana, as well as up to 10 flights to each of Cuba's nine other international airports. Delta, United, American, and JetBlue all have hubs in the New York area.
|
8065.0
|
2016-02-19 00:00:00 UTC
|
Notable Friday Option Activity: AAL, CST, TBPH
|
AAL
|
https://www.nasdaq.com/articles/notable-friday-option-activity-aal-cst-tbph-2016-02-19
|
nan
|
nan
|
Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in American Airlines Group Inc (Symbol: AAL), where a total volume of 60,980 contracts has been traded thus far today, a contract volume which is representative of approximately 6.1 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 57.1% of AAL's average daily trading volume over the past month, of 10.7 million shares. Particularly high volume was seen for the $42 strike call option expiring March 18, 2016 , with 16,218 contracts trading so far today, representing approximately 1.6 million underlying shares of AAL. Below is a chart showing AAL's trailing twelve month trading history, with the $42 strike highlighted in orange:
CST Brands Inc (Symbol: CST) options are showing a volume of 4,218 contracts thus far today. That number of contracts represents approximately 421,800 underlying shares, working out to a sizeable 56.1% of CST's average daily trading volume over the past month, of 752,405 shares. Particularly high volume was seen for the $33 strike call option expiring March 18, 2016 , with 2,424 contracts trading so far today, representing approximately 242,400 underlying shares of CST. Below is a chart showing CST's trailing twelve month trading history, with the $33 strike highlighted in orange:
And Theravance Biopharma, Inc. (Symbol: TBPH) options are showing a volume of 1,073 contracts thus far today. That number of contracts represents approximately 107,300 underlying shares, working out to a sizeable 54.1% of TBPH's average daily trading volume over the past month, of 198,225 shares. Particularly high volume was seen for the $17.50 strike call option expiring June 17, 2016 , with 500 contracts trading so far today, representing approximately 50,000 underlying shares of TBPH. Below is a chart showing TBPH's trailing twelve month trading history, with the $17.50 strike highlighted in orange:
For the various different available expirations for AAL options , CST options , or TBPH 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.
|
Particularly high volume was seen for the $42 strike call option expiring March 18, 2016 , with 16,218 contracts trading so far today, representing approximately 1.6 million underlying shares of AAL. Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in American Airlines Group Inc (Symbol: AAL), where a total volume of 60,980 contracts has been traded thus far today, a contract volume which is representative of approximately 6.1 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 57.1% of AAL's average daily trading volume over the past month, of 10.7 million shares.
|
Particularly high volume was seen for the $42 strike call option expiring March 18, 2016 , with 16,218 contracts trading so far today, representing approximately 1.6 million underlying shares of AAL. Below is a chart showing AAL's trailing twelve month trading history, with the $42 strike highlighted in orange: CST Brands Inc (Symbol: CST) options are showing a volume of 4,218 contracts thus far today. Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in American Airlines Group Inc (Symbol: AAL), where a total volume of 60,980 contracts has been traded thus far today, a contract volume which is representative of approximately 6.1 million underlying shares (given that every 1 contract represents 100 underlying shares).
|
Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in American Airlines Group Inc (Symbol: AAL), where a total volume of 60,980 contracts has been traded thus far today, a contract volume which is representative of approximately 6.1 million underlying shares (given that every 1 contract represents 100 underlying shares). Particularly high volume was seen for the $42 strike call option expiring March 18, 2016 , with 16,218 contracts trading so far today, representing approximately 1.6 million underlying shares of AAL. That number works out to 57.1% of AAL's average daily trading volume over the past month, of 10.7 million shares.
|
Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in American Airlines Group Inc (Symbol: AAL), where a total volume of 60,980 contracts has been traded thus far today, a contract volume which is representative of approximately 6.1 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 57.1% of AAL's average daily trading volume over the past month, of 10.7 million shares. Particularly high volume was seen for the $42 strike call option expiring March 18, 2016 , with 16,218 contracts trading so far today, representing approximately 1.6 million underlying shares of AAL.
|
8066.0
|
2016-02-19 00:00:00 UTC
|
Delta Air Lines, Inc.: The Share Buyback That Wasn't
|
AAL
|
https://www.nasdaq.com/articles/delta-air-lines-inc-share-buyback-wasnt-2016-02-19
|
nan
|
nan
|
In three of the past four quarters, Delta Air Lines spent exactly $425 million on share buybacks. On Delta'searnings calllast month, CFO Paul Jacobson stated that the company planned to spend roughly the same amount on share repurchases in Q1.
Delta's share buyback pace has been pretty consistent recently. Image source: The Motley Fool.
On Wednesday, Delta announced that it had entered into a $350 million accelerated share repurchase agreement as part of its larger $5 billion share buyback program. This is in addition to the $425 million already planned. However, the increased share buyback isn't a sign of Delta suddenly copying American Airlines by being extremely generous toward investors.
American Airlines has been the buyback leader
In recent years, American Airlines and Delta Air Lines have pursued starkly different strategies. American Airlines has spent freely to upgrade its fleet, while Delta has kept older planes flying longer to cut back on capital spending. American has shied away from hedging its fuel costs, while Delta has tended to hedge quite aggressively.
In 2015, a new strategic difference emerged. Even as Delta's free cash flow soared last year due to low fuel prices, the company maintained a disciplined approach to share buybacks, using a portion of its windfall for debt reduction and pension funding. Meanwhile, American Airlines -- which produced less free cash flow -- spent $3.6 billion on share buybacks.
American Airlines spent heavily on share repurchases last year. Image source: American Airlines.
Delta's conservative capital allocation policies paid off last week as the company snagged an investment-grade credit rating from Moody's . In the long run, this should allow Delta to devote more of its free cash flow to buybacks to reward investors. However, its recent accelerated share repurchase serves a much different purpose.
This isn't really a share buyback
Delta's $350 million accelerated share repurchase comes at the same time that the company contributed $350 million in stock -- 7.85 million shares -- to its pension plans.
Thus, depending on how Delta stock performs over the next few months, the accelerated share repurchase will more or less offset the shares that Delta contributed from its treasury. The net impact on its share count will be roughly zero.
In addition to this $350 million of stock, Delta has also contributed $825 million in cash to its pension plans since the beginning of 2016. It's not clear why it wanted to issue shares to the pension plan rather than just making a pure cash contribution. Perhaps Delta hopes the pension fund will hold more of its stock, but the investments are managed by an independent trustee who is free to sell the Delta shares immediately.
A buyback increase is still likely
This week's $350 million accelerated share repurchase thus represents a continuation of Delta's strategy of reducing its debt and pension liabilities -- not an incremental return of capital to shareholders. In fact, since the $350 million comes out of Delta's $5 billion repurchase program, it leaves less available for buybacks that would actually reduce the share count.
That said, Delta has already made 90% of its planned pension contribution for the year and it has made strong progress on debt reduction since the end of 2009. With free cash flow likely to exceed $5 billion in 2016, the company clearly has room to spend more on buybacks.
For the past several years, Delta has held an analyst meeting each May to discuss its capital allocation plans. This year, I expect it to reveal a big increase to its buyback authorization. That should enable it to start making real progress on reducing its share count.
The $15,978 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. In fact, one MarketWatch reporter argues that if more Americans knew about this, the government would have to shell out an extra $10 billion annually. For example: one easy, 17-minute trick could pay you as much as $15,978 more... each year! Once you learn how to take advantage of all these loopholes, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how you can take advantage of these strategies.
The article Delta Air Lines, Inc.: The Share Buyback That Wasn't originally appeared on Fool.com.
Adam Levine-Weinberg is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
American Airlines has spent freely to upgrade its fleet, while Delta has kept older planes flying longer to cut back on capital spending. Even as Delta's free cash flow soared last year due to low fuel prices, the company maintained a disciplined approach to share buybacks, using a portion of its windfall for debt reduction and pension funding. A buyback increase is still likely This week's $350 million accelerated share repurchase thus represents a continuation of Delta's strategy of reducing its debt and pension liabilities -- not an incremental return of capital to shareholders.
|
This isn't really a share buyback Delta's $350 million accelerated share repurchase comes at the same time that the company contributed $350 million in stock -- 7.85 million shares -- to its pension plans. Adam Levine-Weinberg is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
American Airlines has been the buyback leader In recent years, American Airlines and Delta Air Lines have pursued starkly different strategies. This isn't really a share buyback Delta's $350 million accelerated share repurchase comes at the same time that the company contributed $350 million in stock -- 7.85 million shares -- to its pension plans. Thus, depending on how Delta stock performs over the next few months, the accelerated share repurchase will more or less offset the shares that Delta contributed from its treasury.
|
American Airlines has been the buyback leader In recent years, American Airlines and Delta Air Lines have pursued starkly different strategies. Meanwhile, American Airlines -- which produced less free cash flow -- spent $3.6 billion on share buybacks. This isn't really a share buyback Delta's $350 million accelerated share repurchase comes at the same time that the company contributed $350 million in stock -- 7.85 million shares -- to its pension plans.
|
8067.0
|
2016-02-17 00:00:00 UTC
|
Delta Air Lines, Inc. Gets an Investment-Grade Rating: Who's Next?
|
AAL
|
https://www.nasdaq.com/articles/delta-air-lines-inc-gets-investment-grade-rating-whos-next-2016-02-17
|
nan
|
nan
|
Since surviving the Great Recession, Delta Air Lines has made a herculean effort to improve its balance sheet to protect against any future industry downturns. Delta's management believes that a strong balance sheet will enable its stock to command a much higher earnings multiple.
Years of debt-reduction efforts are finally paying off for Delta. Last week, Moody's became the first credit rating agency to upgrade it to an investment-grade corporate credit rating. That's an important symbolic milestone that Delta's fellow legacy carriers American Airlines and United Continental are still far from reaching.
Delta reduces its debt
At the end of 2009, Delta was staggering under $17 billion of net debt. It also had an unfunded pension liability of nearly $12 billion. By the end of 2015, Delta had cut its net debt burden by more than $10 billion, to $6.7 billion, with further plans to reduce net debt to $4 billion by 2020.
Delta has reduced its net debt by more than $10 billion since 2009. Image source: The Motley Fool.
The unfunded pension liability has actually increased in the past few years -- it currently totals $13.9 billion -- due to the impact of low interest rates. Delta plans to address this by contributing at least $1 billion annually to the pension plan through 2020. Assuming average investment returns, that would make the pension plan 80% funded by then (or 100% funded, if interest rates rise by 2 percentage points).
Just last month, retiring Delta Air Lines CEO Richard Anderson told investors on the company's Q4earnings callthat he thought Delta would get an investment-grade credit rating before the end of 2016. Thanks to the company's strong track record of balance sheet improvements, it only took a few more weeks.
United Continental and American Airlines have work to do
Two of Delta's smaller rivals, Southwest Airlines and Alaska Air , already have investment-grade credit ratings. However, its global competitors American Airlines and United Continental are still pretty far from investment-grade status.
American Airlines CEO Doug Parker has made it clear that he doesn't care about reaching an investment-grade credit rating, at least for the foreseeable future. American Airlines can already issue secured debt with an average interest rate around 4%. One big reason for chasing a high credit rating is to get lower interest rates, and Parker doesn't see much room to do better there.
Thus, American Airlines is financing its new aircraft purchases at these low rates, while spending most of its operating cash flow on massive share buybacks . As a result, its debt burden is rising. American Airlines had net debt of more than $20 billion at the end of 2015.
American Airlines is taking on more debt to pay for new planes. Image source: American Airlines.
By contrast, United Continental is at least making an effort to improve its balance sheet. A few years ago, United set a goal of reducing its adjusted gross debt to $15 billion by 2017. It is closing in on that target, ending 2015 with $17 billion of adjusted gross debt. Including its cash and investments, United has about $12 billion of adjusted net debt.
United also has a very manageable unfunded pension liability of just $1.5 billion. Thus, if you include both net debt and pension liabilities, United Continental's balance sheet is actually in better shape than Delta's.
However, Delta is a far more profitable company. United expects to report an 8% to 10% pre-tax margin this quarter, while Delta has forecast a Q1 profit margin nearly twice as high. United's lower profitability means that it has a greater risk of running losses during an industry downturn. As a result, it probably needs to pay off a lot more debt to reach investment-grade status.
What's next for Delta?
Now that Delta has achieved its first investment-grade credit rating, the company may feel free to increase its share repurchase activity. Delta bought back $2.2 billion of stock in 2015, but American Airlines outpaced it with $3.6 billion of share buybacks.
In its report upgrading Delta to an investment-grade rating, Moody's said it expects the company to use a majority of its free cash flow for share buybacks. Delta could interpret this as "permission" to become more aggressive. (Credit rating agencies usually frown on big share buyback programs.)
Considering that Delta expects to routinely produce $4 billion to $5 billion of free cash flow in the coming years, this means that shareholders can expect even more generous capital returns going forward.
The next billion-dollar iSecret
The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article Delta Air Lines, Inc. Gets an Investment-Grade Rating: Who's Next? originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
Since surviving the Great Recession, Delta Air Lines has made a herculean effort to improve its balance sheet to protect against any future industry downturns. American Airlines CEO Doug Parker has made it clear that he doesn't care about reaching an investment-grade credit rating, at least for the foreseeable future. In its report upgrading Delta to an investment-grade rating, Moody's said it expects the company to use a majority of its free cash flow for share buybacks.
|
Assuming average investment returns, that would make the pension plan 80% funded by then (or 100% funded, if interest rates rise by 2 percentage points). Thus, if you include both net debt and pension liabilities, United Continental's balance sheet is actually in better shape than Delta's. Adam Levine-Weinberg owns shares of United Continental Holdings, and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group.
|
Delta reduces its debt At the end of 2009, Delta was staggering under $17 billion of net debt. By the end of 2015, Delta had cut its net debt burden by more than $10 billion, to $6.7 billion, with further plans to reduce net debt to $4 billion by 2020. United Continental and American Airlines have work to do Two of Delta's smaller rivals, Southwest Airlines and Alaska Air , already have investment-grade credit ratings.
|
United Continental and American Airlines have work to do Two of Delta's smaller rivals, Southwest Airlines and Alaska Air , already have investment-grade credit ratings. American Airlines had net debt of more than $20 billion at the end of 2015. What's next for Delta?
|
8068.0
|
2016-02-17 00:00:00 UTC
|
53 Trades to Stay Ahead of the Curve
|
AAL
|
https://www.nasdaq.com/articles/53-trades-stay-ahead-curve-2016-02-17
|
nan
|
nan
|
InvestorPlace InvestorPlace - Stock Market News, Stock Advice & Trading Tips
During these busy times, it pays to stay on top of the latest profit opportunities.
Today's blog post should be a great place to start. After taking a close look at the latest data on institutional buying pressure and each company's fundamental health, I decided to revise my Portfolio Grader recommendations for 53 big blue-chips stocks.
Chances are that you have at least one of these stocks in your portfolio, so you may want to give this list a skim and act accordingly.
10 Stocks to Buy and Hold Forever
Let's get started…
Upgrades
Last Week's Holds, Now Buys
Last Week's Sells, Now Holds
Downgrades
Last Week's Buys, Now Holds
Last Week's Holds, Now Sells
To stay on top of my latest stock ratings, plug your holdings into Portfolio Grader , my proprietary stock screening tool. You may get started here .
More From InvestorPlace
10 Companies That Have Fallen On Their Face in 20166 Gold Stocks to Buy While the Market Chokes7 Stocks to Buy for MONSTER Growth in 2016
The post 53 Trades to Stay Ahead of the Curve 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.
|
InvestorPlace InvestorPlace - Stock Market News, Stock Advice & Trading Tips During these busy times, it pays to stay on top of the latest profit opportunities. After taking a close look at the latest data on institutional buying pressure and each company's fundamental health, I decided to revise my Portfolio Grader recommendations for 53 big blue-chips stocks. More From InvestorPlace 10 Companies That Have Fallen On Their Face in 20166 Gold Stocks to Buy While the Market Chokes7 Stocks to Buy for MONSTER Growth in 2016 The post 53 Trades to Stay Ahead of the Curve appeared first on InvestorPlace .
|
InvestorPlace InvestorPlace - Stock Market News, Stock Advice & Trading Tips During these busy times, it pays to stay on top of the latest profit opportunities. 10 Stocks to Buy and Hold Forever Let's get started… Upgrades Last Week's Holds, Now Buys Last Week's Sells, Now Holds Downgrades Last Week's Buys, Now Holds Last Week's Holds, Now Sells To stay on top of my latest stock ratings, plug your holdings into Portfolio Grader , my proprietary stock screening tool. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
10 Stocks to Buy and Hold Forever Let's get started… Upgrades Last Week's Holds, Now Buys Last Week's Sells, Now Holds Downgrades Last Week's Buys, Now Holds Last Week's Holds, Now Sells To stay on top of my latest stock ratings, plug your holdings into Portfolio Grader , my proprietary stock screening tool. More From InvestorPlace 10 Companies That Have Fallen On Their Face in 20166 Gold Stocks to Buy While the Market Chokes7 Stocks to Buy for MONSTER Growth in 2016 The post 53 Trades to Stay Ahead of the Curve 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.
|
InvestorPlace InvestorPlace - Stock Market News, Stock Advice & Trading Tips During these busy times, it pays to stay on top of the latest profit opportunities. Today's blog post should be a great place to start. After taking a close look at the latest data on institutional buying pressure and each company's fundamental health, I decided to revise my Portfolio Grader recommendations for 53 big blue-chips stocks.
|
8069.0
|
2016-02-16 00:00:00 UTC
|
Why Gogo Inc. Shares Got Crushed Today
|
AAL
|
https://www.nasdaq.com/articles/why-gogo-inc-shares-got-crushed-today-2016-02-16
|
nan
|
nan
|
What: Shares of Gogo have gotten crushed on Tuesday, down by 36% as of 11:38 a.m. EST, after partner American Airlines filed a declaratory judgment action against the in-flight Wi-Fi provider last week.
So what: American Airlines is considering switching to rival ViaSat for in-flight connectivity options, and the lawsuit is AA's attempt to terminate its agreement with Gogo. The original deal included provisions that would allow AA to switch providers if competing services offer faster and superior in-flight connectivity service compared to Gogo's air-to-ground service.
Now what: On Monday, Gogo responded and said it has no comments about the merits of the lawsuit, but reiterated that it continues to work with American to find a resolution. As Gogo points out, now that American has notified Gogo that a rival is offering superior service, Gogo has the opportunity to submit a competing proposal using any technology in its portfolio. Gogo's early generation technology is used in about 200 aircraft right now, and Gogo will submit a competing proposal to use its latest satellite technology.
The next billion-dollar iSecret
The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article Why Gogo Inc. Shares Got Crushed Today originally appeared on Fool.com.
Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool has the following options: long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
What: Shares of Gogo have gotten crushed on Tuesday, down by 36% as of 11:38 a.m. EST, after partner American Airlines filed a declaratory judgment action against the in-flight Wi-Fi provider last week. So what: American Airlines is considering switching to rival ViaSat for in-flight connectivity options, and the lawsuit is AA's attempt to terminate its agreement with Gogo. Now what: On Monday, Gogo responded and said it has no comments about the merits of the lawsuit, but reiterated that it continues to work with American to find a resolution.
|
So what: American Airlines is considering switching to rival ViaSat for in-flight connectivity options, and the lawsuit is AA's attempt to terminate its agreement with Gogo. The original deal included provisions that would allow AA to switch providers if competing services offer faster and superior in-flight connectivity service compared to Gogo's air-to-ground service. As Gogo points out, now that American has notified Gogo that a rival is offering superior service, Gogo has the opportunity to submit a competing proposal using any technology in its portfolio.
|
The original deal included provisions that would allow AA to switch providers if competing services offer faster and superior in-flight connectivity service compared to Gogo's air-to-ground service. As Gogo points out, now that American has notified Gogo that a rival is offering superior service, Gogo has the opportunity to submit a competing proposal using any technology in its portfolio. Gogo's early generation technology is used in about 200 aircraft right now, and Gogo will submit a competing proposal to use its latest satellite technology.
|
So what: American Airlines is considering switching to rival ViaSat for in-flight connectivity options, and the lawsuit is AA's attempt to terminate its agreement with Gogo. The original deal included provisions that would allow AA to switch providers if competing services offer faster and superior in-flight connectivity service compared to Gogo's air-to-ground service. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
|
8070.0
|
2016-02-16 00:00:00 UTC
|
Technology Sector Update for 02/16/2016: IMOS, SONS, GOGO
|
AAL
|
https://www.nasdaq.com/articles/technology-sector-update-02162016-imos-sons-gogo-2016-02-16
|
nan
|
nan
|
Top Tech Stocks
MSFT +0.57%
AAPL +2.65%
IBM +1.29%
CSCO +3.07%
GOOG +1.03%
Technology stocks rallied this afternoon, with shares of tech companies in the S&P 500 climbing over 1.6%.
In company news, ChipMOS Technology ( IMOS ) shares surged Tuesday after the semiconductor manufacturer reported a 1.7% increase in revenue during January compared with the prior month, generating around $47.9 million in consolidated revenue last month.
Revenue declined about 10.7% from year-ago levels, the company said.
IMOS shares were up almost 18% at $17.03 each, earlier reaching a session high of $17.39 a share.
In other sector news,
(+) SONS, Q4 EPS of $0.23 per share beats Street view by $0.03 per share. Revenue falls 0.6% from last year to $76.33 mln but still tops the $73.91 mln consensus. Guides Q1 earnings, revenue above analyst consensus.
(-) GOGO, Drops to record low after American Airlines ( AAL ) drops company for its supplier of in-flight Internet access. AAL generated nearly two-thirds of GOGO quarterly revenue.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
AAL generated nearly two-thirds of GOGO quarterly revenue. (-) GOGO, Drops to record low after American Airlines ( AAL ) drops company for its supplier of in-flight Internet access. Technology stocks rallied this afternoon, with shares of tech companies in the S&P 500 climbing over 1.6%.
|
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. (-) GOGO, Drops to record low after American Airlines ( AAL ) drops company for its supplier of in-flight Internet access. AAL generated nearly two-thirds of GOGO quarterly revenue.
|
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. (-) GOGO, Drops to record low after American Airlines ( AAL ) drops company for its supplier of in-flight Internet access. AAL generated nearly two-thirds of GOGO quarterly revenue.
|
(-) GOGO, Drops to record low after American Airlines ( AAL ) drops company for its supplier of in-flight Internet access. AAL generated nearly two-thirds of GOGO quarterly revenue. In company news, ChipMOS Technology ( IMOS ) shares surged Tuesday after the semiconductor manufacturer reported a 1.7% increase in revenue during January compared with the prior month, generating around $47.9 million in consolidated revenue last month.
|
8071.0
|
2016-02-16 00:00:00 UTC
|
Technology Sector Update for 02/16/2016: CSIQ,SONS,GOGO,AAL
|
AAL
|
https://www.nasdaq.com/articles/technology-sector-update-02162016-csiqsonsgogoaal-2016-02-16
|
nan
|
nan
|
Top Tech Stocks
MSFT +0.67%
AAPL +2.30%
IBM +1.49%
CSCO +3.25%
GOOG +1.20%
Technology stocks were higher in afternoon trading, with shares of tech companies in the S&P 500 advancing around 1.3%.
In company news, Canadian Solar Inc. ( CSIQ ) rose Tuesday after the photovoltaic-panels company said it expects to report Q4 financial results exceeding its prior guidance as well as suspending a proposed at-the-market stock sale, citing market conditions.
The company said it now expects to have shipped between 1, 350 to 1,400 megawatts of solar modules during the final three months of 2015, up from its prior range expecting 1,300 to 1,350 megawatts.
It also sees Q4 revenue in a range of $1.02 billion to $1.07 billion, topping its prior guidance looking for $930 million to $980 million and beating the $951.2 mln Capital IQ consensus.
CSIQ shares were up almost 18% at $19.30 each, backing down from a session high of $19.48 a share.
In other sector news,
(+) SONS, (+26.0%) Q4 EPS of $0.23 per share beats Street view by $0.03 per share. Revenue falls 0.6% from last year to $76.3 mln but still tops the $73.9 mln consensus. Guides Q1 earnings, revenue above analyst consensus.
(-) GOGO, (-31.1%) Drops to record low after American Airlines ( AAL ) drops company for its supplier of in-flight Internet access. AAL generated nearly two-thirds of GOGO revenue in recent quarters.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
AAL generated nearly two-thirds of GOGO revenue in recent quarters. (-) GOGO, (-31.1%) Drops to record low after American Airlines ( AAL ) drops company for its supplier of in-flight Internet access. Technology stocks were higher in afternoon trading, with shares of tech companies in the S&P 500 advancing around 1.3%.
|
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. (-) GOGO, (-31.1%) Drops to record low after American Airlines ( AAL ) drops company for its supplier of in-flight Internet access. AAL generated nearly two-thirds of GOGO revenue in recent quarters.
|
(-) GOGO, (-31.1%) Drops to record low after American Airlines ( AAL ) drops company for its supplier of in-flight Internet access. AAL generated nearly two-thirds of GOGO revenue in recent quarters. In company news, Canadian Solar Inc. ( CSIQ ) rose Tuesday after the photovoltaic-panels company said it expects to report Q4 financial results exceeding its prior guidance as well as suspending a proposed at-the-market stock sale, citing market conditions.
|
(-) GOGO, (-31.1%) Drops to record low after American Airlines ( AAL ) drops company for its supplier of in-flight Internet access. AAL generated nearly two-thirds of GOGO revenue in recent quarters. Technology stocks were higher in afternoon trading, with shares of tech companies in the S&P 500 advancing around 1.3%.
|
8072.0
|
2016-02-16 00:00:00 UTC
|
The Zacks Analyst Blog Highlights: Delta Air Lines, United Continental Holdings, Southwest Airlines, Alaska Air Group and American Airlines Group
|
AAL
|
https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-delta-air-lines-united-continental-holdings-southwest-0
|
nan
|
nan
|
For Immediate Release
Chicago, IL - February 16, 2016 - 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 ( DAL ), United Continental Holdings ( UAL ), Southwest Airlines ( LUV ), Alaska Air Group ( ALK ) and American Airlines Group ( AAL ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Friday's Analyst Blog:
Are Airlines in Trouble Despite Cheap Oil?
The fourth quarter 2015 earnings season is all but over for stocks in the airline space. The picture that has emerged post the final earnings season of the year is not drastically different from the preceding quarters.
Airline stocks have stumbled on the revenue front yet again, hurt primarily by the strong dollar, as has been the case over the past few quarters. Even though this was more or less expected, what's more alarming is that many leading carriers have missed our estimates even for earnings.
Q4 Earnings Misses Despite Cheap Oil
The final quarter of 2015 saw airline heavyweights like Delta Air Lines ( DAL ) and United Continental Holdings ( UAL ) failing to beat the Zacks Consensus Estimate on the bottom-line front despite oil prices being low. Cheap fuel costs have, however, resulted in significant year-over-year bottom-line expansion for carriers in the fourth quarter of 2015.
One possible reason for this unexpected bottom-line miss is that the oil price weakness has been in place for quite some time now - since mid-2014. The extended period of the slump in oil prices means that analysts must have already accounted for this major tailwind for carriers while setting their earnings estimates. Cheap oil is already priced in.
Moreover, plunging oil prices mean that fuel costs are no longer the largest input cost for carriers. Fourth-quarter results of carriers like Delta, United Continental, Southwest Airlines ( LUV ) and Alaska Air Group ( ALK ) substantiate this view with aircraft fuel expenses ranking second behind salaries, wages and related costs. The rise in labor costs has not helped the bottom line and it has now comfortably displaced fuel costs as airlines' largest expense.
Oil Price Weakness Hits PRASM Also
The continuous drop in oil prices has hurt carriers' top lines as well. For example, United Continental has already stated that the slackening of demand from energy companies at the carrier's Houston hub is due to top soft oil prices resulting in constantly declining passenger unit revenue (PRASM: a measure of unit revenue).
In fact, PRASM-related worries have impacted carriers for quite some time now. Lower fuel surcharges on international flights due to weak oil prices have been one of the reasons behind the constant decline in this key revenue metric, which is a measure of sales relative to capacity for a carrier.
Reservations related to PRASM are likely to persist further in the near term, hurting airline prospects. For example, United Continental expects PRASM to decline in the range of 6% to 8% in the first quarter of 2016. Likewise, American Airlines Group ( AAL ) has projected a 6% to 8% drop in PRASM for the first quarter of 2016.
Zika Fears: The Latest Challenge on the Block
As if pricing, PRASM and capacity related troubles were not enough, the current outbreak of the mosquito-borne Zika virus in multiple countries, particularly in South and Central America, has set off further alarm bells. The spread of the disease has caused many carriers to offer fliers (particularly pregnant women) refunds or options to reschedule their travel to Zika-affected areas at a later date.
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 >>
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.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today . Find out What is happening in the stock market today on zacks.com.
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 (DAL): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
SOUTHWEST AIR (LUV): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
AMER AIRLINES (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.
|
Stocks recently featured in the blog include Delta Air Lines ( DAL ), United Continental Holdings ( UAL ), Southwest Airlines ( LUV ), Alaska Air Group ( ALK ) and American Airlines Group ( AAL ). Likewise, American Airlines Group ( AAL ) has projected a 6% to 8% drop in PRASM for the first quarter of 2016. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
Stocks recently featured in the blog include Delta Air Lines ( DAL ), United Continental Holdings ( UAL ), Southwest Airlines ( LUV ), Alaska Air Group ( ALK ) and American Airlines Group ( AAL ). Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Likewise, American Airlines Group ( AAL ) has projected a 6% to 8% drop in PRASM for the first quarter of 2016.
|
Stocks recently featured in the blog include Delta Air Lines ( DAL ), United Continental Holdings ( UAL ), Southwest Airlines ( LUV ), Alaska Air Group ( ALK ) and American Airlines Group ( AAL ). Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Likewise, American Airlines Group ( AAL ) has projected a 6% to 8% drop in PRASM for the first quarter of 2016.
|
Stocks recently featured in the blog include Delta Air Lines ( DAL ), United Continental Holdings ( UAL ), Southwest Airlines ( LUV ), Alaska Air Group ( ALK ) and American Airlines Group ( AAL ). Likewise, American Airlines Group ( AAL ) has projected a 6% to 8% drop in PRASM for the first quarter of 2016. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
8073.0
|
2016-02-16 00:00:00 UTC
|
Investors React as Gogo (GOGO) Stock Crashes
|
AAL
|
https://www.nasdaq.com/articles/investors-react-gogo-gogo-stock-crashes-2016-02-16
|
nan
|
nan
|
Shares of in-flight internet provider Gogo Inc. GOGO crashed this morning following news that American Airlines Group AAL filed a declaratory judgement against the company last week. Gogo is down about 33% on the day.
According to American Airlines, Gogo competitor ViaSat VSAT has proposed a better deal to upgrade the Internet service in 200 of its older planes. The contract between American and Gogo can be terminated if another company can materially improve up Gogo's services.
Gogo will have a chance to respond with its own proposal, but the news has sparked a sell-off as investors are now concerned that ViaSat may simply be offering a better service that Gogo.
The social media world was buzzing about American, Gogo, and ViaSat today. We've compiled our favorite notes from StockTwits and Twitter below:
As you can see, sentiment is split on today's news. Some see this is a negative statement about the quality of Gogo's services, while others think the move is too small to be much of a factor.
Have your own opinion? Let us know at ZacksResearch on StockTwits and ZacksResearch on Twitter!
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 >>
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
VIASAT INC (VSAT): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
GOGO INC (GOGO): 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.
|
Shares of in-flight internet provider Gogo Inc. GOGO crashed this morning following news that American Airlines Group AAL filed a declaratory judgement against the company last week. Click to get this free report VIASAT INC (VSAT): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report GOGO INC (GOGO): Free Stock Analysis Report To read this article on Zacks.com click here. According to American Airlines, Gogo competitor ViaSat VSAT has proposed a better deal to upgrade the Internet service in 200 of its older planes.
|
Click to get this free report VIASAT INC (VSAT): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report GOGO INC (GOGO): Free Stock Analysis Report To read this article on Zacks.com click here. Shares of in-flight internet provider Gogo Inc. GOGO crashed this morning following news that American Airlines Group AAL filed a declaratory judgement against the company last week. Click to get this free report >> Want the latest recommendations from Zacks Investment Research?
|
Shares of in-flight internet provider Gogo Inc. GOGO crashed this morning following news that American Airlines Group AAL filed a declaratory judgement against the company last week. Click to get this free report VIASAT INC (VSAT): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report GOGO INC (GOGO): 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.
|
Shares of in-flight internet provider Gogo Inc. GOGO crashed this morning following news that American Airlines Group AAL filed a declaratory judgement against the company last week. Click to get this free report VIASAT INC (VSAT): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report GOGO INC (GOGO): Free Stock Analysis Report To read this article on Zacks.com click here. According to American Airlines, Gogo competitor ViaSat VSAT has proposed a better deal to upgrade the Internet service in 200 of its older planes.
|
8074.0
|
2016-02-15 00:00:00 UTC
|
Shoot Now, Ask Later
|
AAL
|
https://www.nasdaq.com/articles/shoot-now-ask-later-2016-02-15
|
nan
|
nan
|
Since the start of 2016, investor sentiment has led to a shoot now, ask questions later mentality. In the court of economic justice, all stocks have been convicted guilty of recession despite the evidence and defense that proves the economy innocent. Even the Federal Reserve Chair Janet Yellen did not prove to be a great public defender of the economy with her comments that negative interest rates are on the table.
With large cap stocks down -13% and small cap stocks losing -25% from 2015, there are a mixture of indicators suggesting a looming recession could be coming. For example, banking stocks, the beating heart of the U.S. economy, saw prices collapse almost -30% from the 2015 highs this week. As CNBC pointed out , "American Airlines ( AAL ), United Continental ( UAL ), General Motors ( GM ) and Ford (F) all sell for five times 2016 earnings" - about a 70% discount to the average S&P 500 stock. As a group, these economically sensitive cyclical stocks grew earnings per share greater than 50% while their stock prices are down by more than -30% from their 52-week highs. In general, the cyclicals are serving jail time, even though growth has been gangbusters and the current valuations massively discounted.
On the flip side, defensive stocks with little-to-no revenue growth like "Campbell Soup (CPB) trade at 20 times earnings, Kimberly-Clark ( KMB ) is at 21 times earnings, Procter & Gamble (PG) is at 22 times earnings and Clorox ( CLX ) is at 25 times earnings. All of these stocks are near 52-week highs."
Confused? Well, if we are indeed going into recession, than this valuation dichotomy between cyclicals and staples makes sense. Stocks can be a leading indicator (i.e., predictor) of future recessions, but as the famed Nobel Prize winner in economics Paul Samuelson noted, "The stock market has forecast nine of the last five recessions."
On the other hand, if this current correction is a false recession scare, then now would be a tremendous buying opportunity. In fact, over the last five years, there have been plenty of tremendous buying opportunities for those courageous long-term investors willing to put capital to work during these panic periods (see also Groundhog Day All Over Again) :
2011: Debt Downgrade/Debt Ceiling Debate/European PIIGS Crisis (-22% correction)
2012: Arab Spring/Greek "Gr-Exit" Fears (-11% correction)
2013: Fed Taper Tantrum (-8% correction)
2014: Ebola Outbreak (-10% correction)
2015: China Slowdown Fears (-13% correction in August)
2016 (1st Six Weeks): Strong Dollar, Collapsing Oil, interest Rate Hikes/Negative Rates, Weakening China (-15% correction)
2016 (Next 46 Weeks): ??????????
Today's threats rearing their ugly heads have definite recession credibility, but if you think about the strong dollar, collapsing oil prices , Fed monetary policies, weakening Chinese economy, and negative global interest rates, all of these threats existed well before stock prices nose-dived during the last six weeks. If the economic court is judging the current data for potential recession evidence, making a case and proving the economy guilty is challenging. It's tough to find a recession when
Warning! GuruFocus has detected 7 Warning Sign with KMB. Click here to check it out.
KMB 15-Year Financial Data
The intrinsic value of KMB
Peter Lynch Chart of KMB
Read More:
Note of portfolio 51508
Note of portfolio 51508
Note of portfolio 51508
Note of portfolio 51508
About GuruFocus: GuruFocus.com tracks the stocks picks and portfolio holdings of the world's best investors. This value investing site offers stock screeners and valuation tools. And publishes daily articles tracking the latest moves of the world's best investors. GuruFocus also provides promising stock ideas in 3 monthly newsletters sent to 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.
|
As CNBC pointed out , "American Airlines ( AAL ), United Continental ( UAL ), General Motors ( GM ) and Ford (F) all sell for five times 2016 earnings" - about a 70% discount to the average S&P 500 stock. Even the Federal Reserve Chair Janet Yellen did not prove to be a great public defender of the economy with her comments that negative interest rates are on the table. If the economic court is judging the current data for potential recession evidence, making a case and proving the economy guilty is challenging.
|
As CNBC pointed out , "American Airlines ( AAL ), United Continental ( UAL ), General Motors ( GM ) and Ford (F) all sell for five times 2016 earnings" - about a 70% discount to the average S&P 500 stock. In fact, over the last five years, there have been plenty of tremendous buying opportunities for those courageous long-term investors willing to put capital to work during these panic periods (see also Groundhog Day All Over Again) : 2011: Debt Downgrade/Debt Ceiling Debate/European PIIGS Crisis (-22% correction) 2012: Arab Spring/Greek "Gr-Exit" Fears (-11% correction) 2013: Fed Taper Tantrum (-8% correction) 2014: Ebola Outbreak (-10% correction) 2015: China Slowdown Fears (-13% correction in August) 2016 (1st Six Weeks): Strong Dollar, Collapsing Oil, interest Rate Hikes/Negative Rates, Weakening China (-15% correction) 2016 (Next 46 Weeks): ? Today's threats rearing their ugly heads have definite recession credibility, but if you think about the strong dollar, collapsing oil prices , Fed monetary policies, weakening Chinese economy, and negative global interest rates, all of these threats existed well before stock prices nose-dived during the last six weeks.
|
As CNBC pointed out , "American Airlines ( AAL ), United Continental ( UAL ), General Motors ( GM ) and Ford (F) all sell for five times 2016 earnings" - about a 70% discount to the average S&P 500 stock. On the flip side, defensive stocks with little-to-no revenue growth like "Campbell Soup (CPB) trade at 20 times earnings, Kimberly-Clark ( KMB ) is at 21 times earnings, Procter & Gamble (PG) is at 22 times earnings and Clorox ( CLX ) is at 25 times earnings. In fact, over the last five years, there have been plenty of tremendous buying opportunities for those courageous long-term investors willing to put capital to work during these panic periods (see also Groundhog Day All Over Again) : 2011: Debt Downgrade/Debt Ceiling Debate/European PIIGS Crisis (-22% correction) 2012: Arab Spring/Greek "Gr-Exit" Fears (-11% correction) 2013: Fed Taper Tantrum (-8% correction) 2014: Ebola Outbreak (-10% correction) 2015: China Slowdown Fears (-13% correction in August) 2016 (1st Six Weeks): Strong Dollar, Collapsing Oil, interest Rate Hikes/Negative Rates, Weakening China (-15% correction) 2016 (Next 46 Weeks): ?
|
As CNBC pointed out , "American Airlines ( AAL ), United Continental ( UAL ), General Motors ( GM ) and Ford (F) all sell for five times 2016 earnings" - about a 70% discount to the average S&P 500 stock. Well, if we are indeed going into recession, than this valuation dichotomy between cyclicals and staples makes sense. Today's threats rearing their ugly heads have definite recession credibility, but if you think about the strong dollar, collapsing oil prices , Fed monetary policies, weakening Chinese economy, and negative global interest rates, all of these threats existed well before stock prices nose-dived during the last six weeks.
|
8075.0
|
2016-02-14 00:00:00 UTC
|
Delta Air Lines, Inc. Is Poised for Fuel-Efficiency Gains
|
AAL
|
https://www.nasdaq.com/articles/delta-air-lines-inc-poised-fuel-efficiency-gains-2016-02-14
|
nan
|
nan
|
In the past few years, some airlines -- most dramatically American Airlines -- have spent tons of money on new planes in order to boost fuel efficiency. Meanwhile, Delta Air Lines has made a name for itself by continuing to fly older aircraft and buying up used planes from other airlines.
Delta has purchased quite a few used aircraft in recent years. Photo: The Motley Fool
It's hard to argue with the results. Delta provides extremely reliable service in spite of its older aircraft fleet. Moreover, it has an extremely high return on invested capital thanks to its disciplined capital allocation policy.
However, investors shouldn't think that Delta is ignoring fuel efficiency. In fact, it is on pace to take a big step forward in terms of fuel efficiency over the next two to three years -- while remaining disciplined about capital spending.
American Airlines pays up for fuel efficiency gains
American Airlines is in the midst of a massive aircraft-buying binge. Several years ago, it ordered more than 400 new narrowbody aircraft from Boeing and Airbus. It is also updating its widebody fleet with dozens of new Boeing 777s, Boeing 787s, and Airbus A350s.
In 2014 -- the first full year after its merger with US Airways -- American Airlines added 132 new aircraft to its fleet, including regional jets. In 2015, it received 127 new airplanes. In 2016, it will receive more than 100 new airplanes for the third consecutive year.
American Airlines is rapidly replacing older planes in its fleet. Photo: American Airlines.
This fleet replacement strategy has required huge capital expenditures. American Airlines' aircraft capex exceeded $5 billion per year in 2014 and 2015. The company expects to spend another $4.5 billion on aircraft purchases in 2016.
American's fleet renewal program has driven steady fuel efficiency improvements. Yet the gains have been smaller than you might imagine, given the extent of American's spending. In 2015, American increased capacity 1.2% year over year, while fuel consumption fell 0.2%. That implies a modest 1.4% year-over-year gain in fuel efficiency.
Fuel efficiency on a budget
While Delta Air Lines is roughly the same size as American Airlines, it has learned to get by on a much tighter capex budget. It has spent an average of about $2 billion annually on aircraft purchases in the past three years.
Over the next three years, Delta expects to spend an average of $2.4 billion annually. Even on this relatively modest budget, it will be able to replace about 15% of its fleet with new planes between now and 2018. This consists of 57 new Boeing 737-900ERs, 45 new Airbus A321s, 15 Airbus A350s, and six Airbus A330s.
Just as importantly, Delta is adding more seats to its existing planes to improve fuel efficiency. First, Delta is reconfiguring its domestic Boeing 757s from various setups averaging about 180 seats to a uniform 199-seat configuration. About half of these planned retrofits have occurred just in the past six months, and the project should be completed by the end of 2016.
Delta is adding seven seats to all of its A320s. Photo: The Motley Fool.
Delta is also adding seats to its Airbus A319s and A320s. The A319s will get 132 seats, up from 126 previously, while the A320s will be configured with 157 seats, up from 150 seats previously. In total, Delta's aircraft modification projects will add seats to nearly a quarter of its planes between 2015 and 2017.
Most of the benefit for half the price
Between buying new planes and adding seats to its existing fleet, Delta should be able to improve its fuel efficiency by 4%-5% over the next three years.
American Airlines should be able to achieve a larger fuel efficiency gain in that time period. However, American's capex budget is roughly twice that of Delta. It's only getting a modest incremental fuel efficiency boost compared with Delta's penny-pinching approach.
As a result, Delta will be in good shape even if fuel prices bounce back in the next few years. In the meantime, it will maintain its lead over American Airlines in terms of return on invested capital.
The next billion-dollar iSecret
The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article Delta Air Lines, Inc. Is Poised for Fuel-Efficiency Gains originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of The Boeing Company and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
In fact, it is on pace to take a big step forward in terms of fuel efficiency over the next two to three years -- while remaining disciplined about capital spending. In 2014 -- the first full year after its merger with US Airways -- American Airlines added 132 new aircraft to its fleet, including regional jets. Most of the benefit for half the price Between buying new planes and adding seats to its existing fleet, Delta should be able to improve its fuel efficiency by 4%-5% over the next three years.
|
Most of the benefit for half the price Between buying new planes and adding seats to its existing fleet, Delta should be able to improve its fuel efficiency by 4%-5% over the next three years. Adam Levine-Weinberg owns shares of The Boeing Company and is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
In the past few years, some airlines -- most dramatically American Airlines -- have spent tons of money on new planes in order to boost fuel efficiency. American Airlines pays up for fuel efficiency gains American Airlines is in the midst of a massive aircraft-buying binge. Most of the benefit for half the price Between buying new planes and adding seats to its existing fleet, Delta should be able to improve its fuel efficiency by 4%-5% over the next three years.
|
Delta has purchased quite a few used aircraft in recent years. American Airlines' aircraft capex exceeded $5 billion per year in 2014 and 2015. Most of the benefit for half the price Between buying new planes and adding seats to its existing fleet, Delta should be able to improve its fuel efficiency by 4%-5% over the next three years.
|
8076.0
|
2016-02-11 00:00:00 UTC
|
Delta Air Lines, Inc. (DAL) Ex-Dividend Date Scheduled for February 12, 2016
|
AAL
|
https://www.nasdaq.com/articles/delta-air-lines-inc-dal-ex-dividend-date-scheduled-february-12-2016-2016-02-11
|
nan
|
nan
|
Delta Air Lines, Inc. ( DAL ) will begin trading ex-dividend on February 12, 2016. A cash dividend payment of $0.135 per share is scheduled to be paid on March 09, 2016. Shareholders who purchased DAL prior to the ex-dividend date are eligible for the cash dividend payment. This marks the 3rd quarter that DAL has paid the same dividend.
The previous trading day's last sale of DAL was $43.27, representing a -18% decrease from the 52 week high of $52.77 and a 25.02% increase over the 52 week low of $34.61.
DAL is a part of the Transportation sector, which includes companies such as FedEx Corporation ( FDX ) and American Airlines Group, Inc. ( AAL ). DAL's current earnings per share, an indicator of a company's profitability, is $3.52. Zacks Investment Research reports DAL's forecasted earnings growth in 2016 as 43.79%, compared to an industry average of .1%.
For more information on the declaration, record and payment dates, visit the DAL Dividend History page. Our Dividend Calendar has the full list of stocks that have an ex-dividend today.
Interested in gaining exposure to DAL through an Exchange Traded Fund [ETF]?
The following ETF(s) have DAL as a top-10 holding:
PowerShares Dynamic Leisure & Entertainment Portfolio ( PEJ )
iShares Transportation AverageETF ( IYT )
PowerShares DWA Consumer Cyclicals Momentum Portfolio ( PEZ )
SPDR S&P Transportation ETF ( XTN )
U.S. Global Jets ETF ( JETS ).
The top-performing ETF of this group is JETS with an decrease of -13.26% over the last 100 days. PEJ has the highest percent weighting of DAL at 5.4%.
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.
|
DAL is a part of the Transportation sector, which includes companies such as FedEx Corporation ( FDX ) and American Airlines Group, Inc. ( AAL ). Zacks Investment Research reports DAL's forecasted earnings growth in 2016 as 43.79%, compared to an industry average of .1%. The following ETF(s) have DAL as a top-10 holding: PowerShares Dynamic Leisure & Entertainment Portfolio ( PEJ ) iShares Transportation AverageETF ( IYT ) PowerShares DWA Consumer Cyclicals Momentum Portfolio ( PEZ ) SPDR S&P Transportation ETF ( XTN ) U.S.
|
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. DAL is a part of the Transportation sector, which includes companies such as FedEx Corporation ( FDX ) and American Airlines Group, Inc. ( AAL ). Shareholders who purchased DAL prior to the ex-dividend date are eligible for the cash dividend payment.
|
DAL is a part of the Transportation sector, which includes companies such as FedEx Corporation ( FDX ) and American Airlines Group, Inc. ( AAL ). Shareholders who purchased DAL prior to the ex-dividend date are eligible for the cash dividend payment. For more information on the declaration, record and payment dates, visit the DAL Dividend History page.
|
DAL is a part of the Transportation sector, which includes companies such as FedEx Corporation ( FDX ) and American Airlines Group, Inc. ( AAL ). A cash dividend payment of $0.135 per share is scheduled to be paid on March 09, 2016. Shareholders who purchased DAL prior to the ex-dividend date are eligible for the cash dividend payment.
|
8077.0
|
2016-02-09 00:00:00 UTC
|
Spirit Airlines Earnings: Solid End to a Tough Year
|
AAL
|
https://www.nasdaq.com/articles/spirit-airlines-earnings-solid-end-tough-year-2016-02-09
|
nan
|
nan
|
2015 was a tough year for Spirit Airlines investors. While Spirit posted strong earnings growth each quarter, it had to lower its margin guidance twice during the year. Furthermore, it saw steep declines in unit revenue, particularly during the second half of the year. As a result, investors bailed on Spirit Airlines stock, causing it to fall nearly 50% in 2015.
Spirit Airlines 2015 Stock Performance. Data by YCharts .
However, Spirit seems to have stabilized its performance. On Tuesday, it reported solid results for the fourth quarter and a relatively good outlook for Q1 and the rest of 2016.
Spirit Airlines results: The raw numbers
Data source: Spirit Airlines Q4 earnings release.
What happened with Spirit Airlines this quarter?
The last few months have been eventful for Spirit Airlines. In October, management projected that Spirit's Q4 operating margin would be about 17.5%, compared to 19.9% a year earlier. This would have broken a long streak of earnings growth.
However, the company didn't face as much fare pressure as initially expected during Q4. Both fuel prices and non-fuel unit costs also came in lower than expected. As a result, Spirit raised its operating margin guidance to 22.5% last month. (Operating margin ended up at 22.8%.)
This enabled Spirit to improve adjusted EPS to $1.02 from $0.80 a year earlier. For the full year -- despite all the drama -- Spirit's adjusted EPS climbed 35% to $4.37, driven by lower fuel prices.
Spirit Airlines also had an unexpected change at the top recently. CEO Ben Baldanza resigned last month after nearly a decade at the helm. He was replaced by Bob Fornaro, the former CEO of AirTran, who has been a member of Spirit's board since 2014.
What management had to say
Spirit's earnings report gave Fornaro his first opportunity to talk to investors about his plan for the airline. He intends to place a lot of his focus on operational reliability and customer satisfaction, two areas where Spirit has come up short in recent years. However, Fornaro doesn't intend to make wholesale changes to what he sees as a proven, successful business model.
Fornaro also dismissed two rumors that have been circulating since he took the helm. First, he stated that Spirit will remain a high-growth carrier. Its long-range plan to increase capacity 15% to 20% annually remains intact. Second, Fornaro said the company has no merger plans.
New CEO Bob Fornaro intends to maintain Spirit's high growth rate. Image source: Spirit Airlines.
One area where he did show more flexibility than Baldanza was route planning. In recent years, Spirit has challenged legacy carriers like American Airlines by growing rapidly in their biggest hubs.
American Airlines responded by matching Spirit's fares. American's fellow legacy carriers have also moved in that direction. As a result, while there are a lot of potential customers in these big markets, pricing has been weak. To avoid these pricing battles, Fornaro expressed an interest in entering more small and midsize markets -- i.e., routes that are unserved by American Airlines and the other legacy carriers.
Looking forward
Spirit Airlines CFO Ted Christie stated during theearnings callthat the pricing environment has been stable for the past few months, but fares remain very low. Spirit expects sequential unit revenue improvements throughout 2016 as comparisons get easier.
On the cost side, while fuel prices continue to decline, the year-over-year benefit will be much smaller in 2016. Spirit expects non-fuel unit costs to decline 0% to 1% for the full year, with larger declines in the first half of 2016 and year-over-year increases in the second half of the year, driven by the timing of maintenance events.
Based on the current revenue and cost outlook, Christie projected that Spirit will post a 19% to 20.5% operating margin in Q1. That would be down from 22.7% a year earlier, driving a modest year-over-year decline in EPS. However, if the revenue environment continues to stabilize, Spirit could return to EPS growth later in the year.
The next billion-dollar iSecret
The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article Spirit Airlines Earnings: Solid End to a Tough Year originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of Spirit Airlines and is long March 2016 $40 calls on Spirit Airlines, long June 2016 $30 calls on Spirit Airlines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group. The Motley Fool recommends Spirit Airlines. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
He intends to place a lot of his focus on operational reliability and customer satisfaction, two areas where Spirit has come up short in recent years. To avoid these pricing battles, Fornaro expressed an interest in entering more small and midsize markets -- i.e., routes that are unserved by American Airlines and the other legacy carriers. Looking forward Spirit Airlines CFO Ted Christie stated during theearnings callthat the pricing environment has been stable for the past few months, but fares remain very low.
|
Spirit expects non-fuel unit costs to decline 0% to 1% for the full year, with larger declines in the first half of 2016 and year-over-year increases in the second half of the year, driven by the timing of maintenance events. Adam Levine-Weinberg owns shares of Spirit Airlines and is long March 2016 $40 calls on Spirit Airlines, long June 2016 $30 calls on Spirit Airlines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
Spirit Airlines results: The raw numbers Data source: Spirit Airlines Q4 earnings release. Spirit expects non-fuel unit costs to decline 0% to 1% for the full year, with larger declines in the first half of 2016 and year-over-year increases in the second half of the year, driven by the timing of maintenance events. Adam Levine-Weinberg owns shares of Spirit Airlines and is long March 2016 $40 calls on Spirit Airlines, long June 2016 $30 calls on Spirit Airlines, and long January 2017 $30 calls on American Airlines Group.
|
Spirit Airlines results: The raw numbers Data source: Spirit Airlines Q4 earnings release. The last few months have been eventful for Spirit Airlines. However, if the revenue environment continues to stabilize, Spirit could return to EPS growth later in the year.
|
8078.0
|
2016-02-05 00:00:00 UTC
|
Pre-Market Most Active for Feb 5, 2016 : HES, ING, MT, LNKD, HPQ, MFG, QQQ, TVIX, XIV, FB, AAL, QTNT
|
AAL
|
https://www.nasdaq.com/articles/pre-market-most-active-feb-5-2016-hes-ing-mt-lnkd-hpq-mfg-qqq-tvix-xiv-fb-aal-qtnt-2016-02
|
nan
|
nan
|
The NASDAQ 100 Pre-Market Indicator is down -14.08 to 4,153.69. The total Pre-Market volume is currently 18,013,832 shares traded.
The following are the most active stocks for the pre-market session :
Hess Corporation ( HES ) is -4.67 at $38.80, with 2,660,909 shares traded. HES's current last sale is 65.76% of the target price of $59.
ING Group, N.V. ( ING ) is -0.06 at $11.82, with 1,934,863 shares traded. As reported by Zacks, the current mean recommendation for ING is in the "strong buy range".
ArcelorMittal ( MT ) is -0.26 at $3.87, with 1,285,728 shares traded.MT is scheduled to provide an earnings report on 2/12/2016, for the fiscal quarter ending Dec2015. The consensus earnings per share forecast is -0.26 per share, which represents a -43 percent increase over the EPS one Year Ago
LinkedIn Corporation ( LNKD ) is -66.53 at $125.75, with 1,089,051 shares traded. As reported by Zacks, the current mean recommendation for LNKD is in the "buy range".
HP Inc. ( HPQ ) is unchanged at $9.86, with 908,618 shares traded. HPQ's current last sale is 65.73% of the target price of $15.
Mizuho Financial Group, Inc. ( MFG ) is +0.0087 at $3.14, with 821,735 shares traded. MFG's current last sale is 64.06% of the target price of $4.9.
PowerShares QQQ Trust, Series 1 ( QQQ ) is -0.6 at $101.05, with 581,611 shares traded. This represents a 19.25% increase from its 52 Week Low.
region ( TVIX ) is +0.21 at $9.49, with 459,825 shares traded. This represents a 78.72% increase from its 52 Week Low.
region ( XIV ) is -0.18 at $18.73, with 345,584 shares traded. This represents a 14.84% increase from its 52 Week Low.
Facebook, Inc. ( FB ) is -1.59 at $108.90, with 178,989 shares traded. Over the last four weeks they have had 5 up revisions for the earnings forecast, for the fiscal quarter ending Mar 2016. The consensus EPS forecast is $0.44. As reported by Zacks, the current mean recommendation for FB is in the "buy range".
American Airlines Group, Inc. ( AAL ) is unchanged at $38.21, with 175,348 shares traded. Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Mar 2016. The consensus EPS forecast is $1.22. As reported by Zacks, the current mean recommendation for AAL is in the "buy range".
Quotient Limited ( QTNT ) is -1.5 at $8.80, with 152,571 shares traded.QTNT is scheduled to provide an earnings report on 2/8/2016, for the fiscal quarter ending Dec2015. The consensus earnings per share forecast is -0.8 per share, which represents a -51 percent increase over the EPS one Year Ago
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.
|
American Airlines Group, Inc. ( AAL ) is unchanged at $38.21, with 175,348 shares traded. As reported by Zacks, the current mean recommendation for AAL is in the "buy range". The following are the most active stocks for the pre-market session : Hess Corporation ( HES ) is -4.67 at $38.80, with 2,660,909 shares traded.
|
American Airlines Group, Inc. ( AAL ) is unchanged at $38.21, with 175,348 shares traded. As reported by Zacks, the current mean recommendation for AAL is in the "buy range". ArcelorMittal ( MT ) is -0.26 at $3.87, with 1,285,728 shares traded.MT is scheduled to provide an earnings report on 2/12/2016, for the fiscal quarter ending Dec2015.
|
American Airlines Group, Inc. ( AAL ) is unchanged at $38.21, with 175,348 shares traded. As reported by Zacks, the current mean recommendation for AAL is in the "buy range". ArcelorMittal ( MT ) is -0.26 at $3.87, with 1,285,728 shares traded.MT is scheduled to provide an earnings report on 2/12/2016, for the fiscal quarter ending Dec2015.
|
American Airlines Group, Inc. ( AAL ) is unchanged at $38.21, with 175,348 shares traded. As reported by Zacks, the current mean recommendation for AAL is in the "buy range". The consensus earnings per share forecast is -0.26 per share, which represents a -43 percent increase over the EPS one Year Ago LinkedIn Corporation ( LNKD ) is -66.53 at $125.75, with 1,089,051 shares traded.
|
8079.0
|
2016-02-05 00:00:00 UTC
|
Hawaiian Airlines' January Traffic Up on Favorable Factors
|
AAL
|
https://www.nasdaq.com/articles/hawaiian-airlines-january-traffic-up-on-favorable-factors-2016-02-05
|
nan
|
nan
|
Hawaiian Airlines, Inc. - a subsidiary of Hawaiian Holdings, Inc.HA - posted a rise in air traffic in the month of January. Traffic - measured in revenue passenger miles (RPMs) - came in at 1.22 billion, up 5.2% from 1.16 billion recorded a year ago.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) inched up 1.5% to 1.5 billion. However, the load factor or percentage of seats filled by passengers increased to 81.1% from 78.2% in Dec 2015.
Increased travel demand and continuous route expansion are the primary factors that drove the upside in air traffic. These positives are expected to boost the carrier's performance in the future as well.
Recently, the company reported fourth-quarter 2015 results wherein the top line of $574 million outpaced the Zacks Consensus Estimate of $569 million while the bottom line figure of 85 cents per share met was in line with the same.
The company expects operating revenue per ASM in between negative 1.5% and positive 1.5% in the first quarter of 2016 in comparison with the last-year quarter while cost per ASM (excluding fuel) is likely to increase in the band of 3% to 6% from the year-earlier quarter.
Zacks Rank & Other Stocks to Consider
Hawaiian Holdings currently sports a Zacks Rank #1 (Strong Buy). Other favorably ranked stocks in the same space are Southwest Airlines Co. LUV , American Airlines Group Inc. AAL and Delta Air Lines DAL . All three companies sport a Zacks Rank #1.
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 >>
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 AIR (LUV): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
HAWAIIAN HLDGS (HA): Free Stock Analysis Report
AMER AIRLINES (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.
|
Other favorably ranked stocks in the same space are Southwest Airlines Co. LUV , American Airlines Group Inc. AAL and Delta Air Lines DAL . Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. However, the load factor or percentage of seats filled by passengers increased to 81.1% from 78.2% in Dec 2015.
|
Other favorably ranked stocks in the same space are Southwest Airlines Co. LUV , American Airlines Group Inc. AAL and Delta Air Lines DAL . Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report AMER AIRLINES (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.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Other favorably ranked stocks in the same space are Southwest Airlines Co. LUV , American Airlines Group Inc. AAL and Delta Air Lines DAL . The company expects operating revenue per ASM in between negative 1.5% and positive 1.5% in the first quarter of 2016 in comparison with the last-year quarter while cost per ASM (excluding fuel) is likely to increase in the band of 3% to 6% from the year-earlier quarter.
|
Other favorably ranked stocks in the same space are Southwest Airlines Co. LUV , American Airlines Group Inc. AAL and Delta Air Lines DAL . Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >> Want the latest recommendations from Zacks Investment Research?
|
8080.0
|
2016-02-04 00:00:00 UTC
|
The Zacks Analyst Blog Highlights: Airlines Group, JetBlue Airways, Delta Air Lines, Alaska Air Group and United Continental Holdings
|
AAL
|
https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-airlines-group-jetblue-airways-delta-air-lines-alaska
|
nan
|
nan
|
For Immediate Release
Chicago, IL - February 04, 2016 - 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 the Airlines Group Inc. ( AAL ), JetBlue Airways Corp. ( JBLU ), Delta Air Lines ( DAL ), Alaska Air Group Inc. ( ALK ) and United Continental Holdings ( UAL ).
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: Earnings Beats for American (AAL), JetBlue (JBLU)
As the fourth-quarter 2015 earnings season in the airline industry moves toward its final phase, the past week saw earnings beats at major carriers like American Airlines Group Inc. ( AAL ) and JetBlue Airways Corp. ( JBLU ), once again on the back of weak oil prices . However, the past week brought in some disappointment for carriers as well.
Fears looming large owing to the outbreak of the mosquito-borne Zika virus compelled several carriers to offer fliers (particularly pregnant women) refunds or options to reschedule their travel to Zika-affected areas at a later date.
Traffic-related news also flowed in with Delta Air Lines ( DAL ) and Alaska Air Group Inc. ( ALK ) revealing their respective January numbers. A valuable metric - load factor (% of seats filled by passengers) - saw different fates at the two carriers, going up at Delta and down at Alaska Air Group. However, all was not rosy at Delta as passenger revenue per available seat miles (PRASM) - a key measure of unit revenue - continued its downward journey in January.
Read the last Airline Stock Roundup for Jan 27, 2016 .
Recap of the Past Week's Most Important Stories
1. American Airlines' earnings per share (on an adjusted basis) came in at $2.0 in the final quarter of 2015, beating the Zacks Consensus Estimate by 4 cents. Results were aided by low fuel costs. American Airlines, which does not hedge fuel costs, expects savings of approximately $2 billion in 2016 due to low fuel costs.
Fuel price (on a consolidated basis) for 2016 is projected in the range of $1.20 to $1.25 per gallon. The same is expected in the band of $1.15 to $1.20 in the first quarter. Pre-tax margin (on an adjusted basis) is projected in the range of 12% and 14% in the first quarter of 2016 (read more: American Airlines Tops Q4 Earnings, PRASM Woes Persist ).
2.Low-cost carrier JetBlue Airways' earnings (excluding special items) of 56 cents per share beat the Zacks Consensus Estimate of 51 cents. Earnings improved substantially from the year-ago figure of 26 cents. Results were aided by low fuel costs. Operating revenues came in at $1,594 million, edging past the Zacks Consensus Estimate of $1,571 million (read more: JetBlue Q4 Earnings & Revenues Beat Estimates ).
3. The spread of the Zika virus in more than 20 countries, particularly in South and Central America, has set off alarm bells causing many carriers like United Continental Holdings ( UAL ) to offer rescheduling/refunds for tickets purchased for travel to areas where the virus is now wreaking havoc (read more: Airlines Feel the Pinch of Zika Fears: More Trouble Ahead? ).
4. Alaska Air Group, the parent company of Alaska Airlines and Horizon Air, posted a significant rise in air traffic for Jan 2016. Revenue passenger miles (RPMs) - a measure of air traffic - improved 10.4% on a 12.4% capacity expansion. Load factor decreased to 79.1% from 80.5% in Jan 2015 as capacity expansion outpaced the increase in traffic.
5. Delta Air Lines revealed a 3.7% increase in RPMs for January while capacity improved 1.1%. Load factor increased to 81.3% from 79.2% in Jan 2015 as capacity expansion was outpaced by the increase in traffic. However, Delta witnessed a 3% drop in PRASM in the month, mainly due to foreign exchange woes.
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 >>
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.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today . Find out What is happening in the stock market today on zacks.com.
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
AMER AIRLINES (AAL): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
UNITED CONT HLD (UAL): 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.
|
Stocks recently featured in the blog include the Airlines Group Inc. ( AAL ), JetBlue Airways Corp. ( JBLU ), Delta Air Lines ( DAL ), Alaska Air Group Inc. ( ALK ) and United Continental Holdings ( UAL ). Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: Earnings Beats for American (AAL), JetBlue (JBLU) As the fourth-quarter 2015 earnings season in the airline industry moves toward its final phase, the past week saw earnings beats at major carriers like American Airlines Group Inc. ( AAL ) and JetBlue Airways Corp. ( JBLU ), once again on the back of weak oil prices . Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
Stocks recently featured in the blog include the Airlines Group Inc. ( AAL ), JetBlue Airways Corp. ( JBLU ), Delta Air Lines ( DAL ), Alaska Air Group Inc. ( ALK ) and United Continental Holdings ( UAL ). Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: Earnings Beats for American (AAL), JetBlue (JBLU) As the fourth-quarter 2015 earnings season in the airline industry moves toward its final phase, the past week saw earnings beats at major carriers like American Airlines Group Inc. ( AAL ) and JetBlue Airways Corp. ( JBLU ), once again on the back of weak oil prices . Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: Earnings Beats for American (AAL), JetBlue (JBLU) As the fourth-quarter 2015 earnings season in the airline industry moves toward its final phase, the past week saw earnings beats at major carriers like American Airlines Group Inc. ( AAL ) and JetBlue Airways Corp. ( JBLU ), once again on the back of weak oil prices . Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks recently featured in the blog include the Airlines Group Inc. ( AAL ), JetBlue Airways Corp. ( JBLU ), Delta Air Lines ( DAL ), Alaska Air Group Inc. ( ALK ) and United Continental Holdings ( UAL ).
|
Stocks recently featured in the blog include the Airlines Group Inc. ( AAL ), JetBlue Airways Corp. ( JBLU ), Delta Air Lines ( DAL ), Alaska Air Group Inc. ( ALK ) and United Continental Holdings ( UAL ). Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: Earnings Beats for American (AAL), JetBlue (JBLU) As the fourth-quarter 2015 earnings season in the airline industry moves toward its final phase, the past week saw earnings beats at major carriers like American Airlines Group Inc. ( AAL ) and JetBlue Airways Corp. ( JBLU ), once again on the back of weak oil prices . Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
8081.0
|
2016-02-04 00:00:00 UTC
|
Delta's (DAL) CEO to Retire in May, President to Take Control
|
AAL
|
https://www.nasdaq.com/articles/deltas-dal-ceo-to-retire-in-may-president-to-take-control-2016-02-04
|
nan
|
nan
|
Airline behemoth Delta Air Lines, Inc.DAL will have a new man at its helm effective May 2, 2016. The development is a result of Delta's highly successful chief executive officer (CEO) Richard H. Anderson's decision to retire from his post from the same date. His decision, however, does not mean that his association with Delta will end as after his retirement Anderson will assume the role of the Executive Chairman of Delta's Board of Directors. A replacement at the top spot was immediately named by the Atlanta, GA-based carrier.
Replacing Anderson as the CEO will be Ed Bastian, the company's incumbent president. Following Bastian's elevation, his duties will be executed by Glen Hauenstein (currently serving as Executive Vice President and chief revenue officer), May 2 onward. In turn, Delta announced the elevation of Gil West to the position of Senior Executive Vice President and Chief Operating Officer with immediate effect.
From May 2, Delta's board will see some other changes as well. The post of lead director will be assumed by The Home Depot Inc.'s HD former CEO Frank Blake (currently a director at Delta). Dan Carp will no longer serve as non-executive Chairman but will continue to stay on Delta's board. Delta also announced Steve Sear as the leader of the company's Atlantic, Asia-Pacific and Latin America operations with immediate effect, along with global sales.
Anderson, with immense experience in the aviation field, played a key role in helping Delta emerge as one of the top U.S.-based carriers, ever since he joined office as the airline's CEO in Sep 2007. His contribution is all the more noteworthy since he took over as the CEO, having joined Delta's board in Apr 2007, during troubled times at the carrier, shortly after it had emerged from bankruptcy. Anderson's most significant achievement came a year later, with the closure of Delta's merger with Northwest Airlines. He facilitated a smooth integration process and was subsequently instrumental in making Delta the success story that it is today. Under Anderson's guidance, Delta moved to the second spot (behind American Airlines Group AAL ), replacing United Continental Holdings UAL in terms of 2015 air traffic numbers among U.S.-based carriers. No wonder, the news of the impending departure of the tactically sound CEO resulted in shares of Delta declining, albeit marginally, in after-market trading on Feb 3.
Notably, Anderson has also been a key figure in the ongoing tussle between legacy U.S. carriers and their Gulf counterparts. Last year, Delta, with Anderson at the helm, along with American Airlines and United Continental Holdings, had complained to the U.S. government against the unfair nature of the subsidies and other benefits enjoyed by the Gulf carriers, which denied a level playing field to the American carriers.
In view of Anderson's tremendous achievements, it won't be out of place to say that Bastian has big shoes to fill. We believe investors will keep a keen eye on Bastian's performance in his new role once he takes over.
Delta Air Lines currently sports a Zacks Rank # 1 (Strong Buy).
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 >>
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 (DAL): Free Stock Analysis Report
HOME DEPOT (HD): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
AMER AIRLINES (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.
|
Under Anderson's guidance, Delta moved to the second spot (behind American Airlines Group AAL ), replacing United Continental Holdings UAL in terms of 2015 air traffic numbers among U.S.-based carriers. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report HOME DEPOT (HD): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. In turn, Delta announced the elevation of Gil West to the position of Senior Executive Vice President and Chief Operating Officer with immediate effect.
|
Under Anderson's guidance, Delta moved to the second spot (behind American Airlines Group AAL ), replacing United Continental Holdings UAL in terms of 2015 air traffic numbers among U.S.-based carriers. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report HOME DEPOT (HD): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The development is a result of Delta's highly successful chief executive officer (CEO) Richard H. Anderson's decision to retire from his post from the same date.
|
Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report HOME DEPOT (HD): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Under Anderson's guidance, Delta moved to the second spot (behind American Airlines Group AAL ), replacing United Continental Holdings UAL in terms of 2015 air traffic numbers among U.S.-based carriers. His decision, however, does not mean that his association with Delta will end as after his retirement Anderson will assume the role of the Executive Chairman of Delta's Board of Directors.
|
Under Anderson's guidance, Delta moved to the second spot (behind American Airlines Group AAL ), replacing United Continental Holdings UAL in terms of 2015 air traffic numbers among U.S.-based carriers. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report HOME DEPOT (HD): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. His decision, however, does not mean that his association with Delta will end as after his retirement Anderson will assume the role of the Executive Chairman of Delta's Board of Directors.
|
8082.0
|
2016-02-03 00:00:00 UTC
|
American Airlines Share Buybacks Could Rise Again in 2016
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-share-buybacks-could-rise-again-2016-2016-02-03
|
nan
|
nan
|
American Airlines began 2015 with relatively modest plans for returning capital to shareholders. However, as the company's earnings and stock price performance began to diverge , American started to spend quite heavily on share buybacks.
By the end of the year, American Airlines had spent a whopping $3.6 billion to repurchase 85.1 million shares of stock. This reduced its share count by more than 11%.
American Airlines spent $3.6 billion on share buybacks last year. Image source: American Airlines.
Based on management's commentary during American's recentearnings call it seems likely that the company will continue to spend heavily on buybacks this year. In fact, American Airlines will probably repurchase even more stock in 2016 than it did in 2015.
Taking a different path
In the past year or so, Delta Air Lines CEO Richard Anderson and American Airlines CEO Doug Parker have staked out diametrically opposed positions on how to use their windfall profits.
At Delta, Anderson has held down capex to maximize free cash flow. Delta has used a lot of the resulting cash to pay down debt and make extra pension contributions.
Indeed, Anderson boasted on Delta'searnings calllast month that the company had reduced its net debt by more than $10 billion since 2009. By 2020, Delta plans to cut its net debt to just $4 billion while ensuring that its pension plan is 80% funded based on current interest rates -- or 100% funded if interest rates rise by 2 percentage points.
Delta Air Lines hopes to achieve an investment-grade credit rating soon thanks to its efforts to repair its balance sheet. More broadly, management hopes that investors will reward Delta stock with a higher multiple to reflect its strong financial position.
Delta is hoping to get an investment-grade credit rating this year. Image source: The Motley Fool.
By contrast, American Airlines has been spending heavily on new planes to reduce fuel and maintenance costs. This has pressured its free cash flow.
Nevertheless, American Airlines returned about 50% more cash to shareholders than Delta in 2015. That's because CEO Doug Parker is focused on holding down the company's cost of capital. As a result, while American is producing enough cash flow to pay cash for its aircraft purchases, it is instead financing them with cheap debt, freeing up cash for share buybacks .
Expect more of the same
American Airlines' steadily rising share buybacks didn't seem to impact its stock price last year. Management is taking the long view, though, and plans to continue prioritizing repurchases in 2016.
American Airlines ended Q4 with about $2.4 billion remaining on its share repurchase authorization. However, based on some targets that the company announced last week, it seems likely that it will spend significantly more than that.
First, American Airlines CFO Derek Kerr laid out a new $6.5 billion minimum liquidity target. American ended 2015 with about $8.7 billion of liquidity, so it could potentially return more than $2 billion to shareholders from its excess cash.
Second, the company's investor update projected that American will raise $4.5 billion in aircraft debt this year, including a recent $1.1 billion debt offering backed by planes purchased in 2014 and 2015. That would almost exactly offset its planned $4.5 billion in aircraft capital spending.
This means that all of American's operating cash flow will be available to pay for 1. non-aircraft capex, 2. scheduled debt payments, 3. dividends, and 4. share buybacks. Last year, operating cash flow totaled roughly $6.7 billion, and right now American Airlines is on pace for a similar performance in 2016.
American has estimated its non-aircraft capex at $1.2 billion for 2016. The company has $2.2 billion in debt maturing this year. And based on its current $0.10/share quarterly dividend payout, dividend payments would total less than $300 million this year. That would leave about $3 billion for buybacks, assuming operating cash flow remains flat year over year.
Thus, between its excess cash (about $2.2 billion) and the excess cash flow it will generate in 2016 (about $3 billion), American could potentially spend more than $5 billion on buybacks this year. It probably won't spend quite that much, but there is clearly room for American Airlines to increase its share repurchase activity beyond even last year's lofty $3.6 billion level.
The next billion-dollar iSecret
The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article American Airlines Share Buybacks Could Rise Again in 2016 originally appeared on Fool.com.
Adam Levine-Weinberg is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
This means that all of American's operating cash flow will be available to pay for 1. non-aircraft capex, 2. scheduled debt payments, 3. dividends, and 4. share buybacks. Last year, operating cash flow totaled roughly $6.7 billion, and right now American Airlines is on pace for a similar performance in 2016. It probably won't spend quite that much, but there is clearly room for American Airlines to increase its share repurchase activity beyond even last year's lofty $3.6 billion level.
|
Taking a different path In the past year or so, Delta Air Lines CEO Richard Anderson and American Airlines CEO Doug Parker have staked out diametrically opposed positions on how to use their windfall profits. By 2020, Delta plans to cut its net debt to just $4 billion while ensuring that its pension plan is 80% funded based on current interest rates -- or 100% funded if interest rates rise by 2 percentage points. Adam Levine-Weinberg is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group.
|
As a result, while American is producing enough cash flow to pay cash for its aircraft purchases, it is instead financing them with cheap debt, freeing up cash for share buybacks . Second, the company's investor update projected that American will raise $4.5 billion in aircraft debt this year, including a recent $1.1 billion debt offering backed by planes purchased in 2014 and 2015. Thus, between its excess cash (about $2.2 billion) and the excess cash flow it will generate in 2016 (about $3 billion), American could potentially spend more than $5 billion on buybacks this year.
|
American Airlines spent $3.6 billion on share buybacks last year. At Delta, Anderson has held down capex to maximize free cash flow. Thus, between its excess cash (about $2.2 billion) and the excess cash flow it will generate in 2016 (about $3 billion), American could potentially spend more than $5 billion on buybacks this year.
|
8083.0
|
2016-02-02 00:00:00 UTC
|
American Airlines Delivers Strong Earnings, but Skeptics Abound
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-delivers-strong-earnings-skeptics-abound-2016-02-02
|
nan
|
nan
|
Coming into its Q4 earnings report last week, American Airlines had reported a record profit in each of the eight quarters since it merged with US Airways in late 2013.
On Friday, American made it nine in a row. The company produced an adjusted pre-tax profit of $1.29 billion in Q4, up from $1.10 billion a year earlier. Adjusted earnings per share soared 32% from $1.52 to $2.00, lifted by American Airlines' heavy share buyback activity in addition to its net income growth.
American Airlines Net Income vs. Stock Performance. Data by YCharts .
Airline investors don't seem to treat earnings growth driven by fuel cost savings as "real" when it is accompanied by declining unit revenue. And American's passenger revenue per available seat mile (PRASM) came under severe pressure in 2015, due to the strong dollar, economic weakness in key foreign markets like Brazil and Venezuela, and rising competition from Southwest Airlines , particularly in Dallas.
PRASM dropped 1.7% in Q1 2015 and the declines accelerated from there. For the full year, PRASM fell 5.4% year over year. As unit revenue trends headed south, so did American Airlines' share price. With PRASM expected to decline 6% to 8% in Q1, it's not surprising that the stock hasn't recovered.
Revenue trends will improve later this year
American Airlines executives told investors last week that unit revenue trends should improve throughout 2016. This guidance seems realistic for several reasons.
First, year-over-year comparisons will get much easier after this quarter. As noted above, American's PRASM fell 1.7% in Q1 2015. In Q2, the pace of decline worsened to 6.9%, and it remained at a similar level for the rest of the year.
Second, competitive dynamics will improve in the second half of 2016. Southwest Airlines operated 153 daily departures in Dallas at the beginning of 2015, but it ramped up its schedule to 180 daily departures by August.
Southwest Airlines grew rapidly in Dallas last year. Image source: The Motley Fool.
As a result, American won't fully lap the impact of increased competition from Southwest until this August. However, after that, it should benefit from capacity constraints that will prevent Southwest Airlines from adding any more flights in Dallas.
Third, weakness in Brazil and Venezuela will have less of an impact on American Airlines going forward. American Airlines President Scott Kirby noted that Brazil represented more than 6% of the company's revenue in late 2013 but just 2% by last November. Additionally, the 2016 Olympic Games in Rio de Janeiro should provide a boost in travel to Brazil during Q3.
Fourth, American completed its reservation system integration in October, which will allow it to refine its flight schedules to put the right airplanes in the right markets. This should unlock about $300 million in annual revenue synergies over the next year or two.
Looking ahead
Thus, American Airlines has a number of key catalysts coming in the next two or three quarters that should improve its unit revenue performance. It also has other initiatives in the works that should bolster unit revenue beginning later in 2016.
American will add premium economy seats for long-haul flights. Photo: American Airlines
For example, American will introduce the first true long-haul premium economy section among U.S. airlines in late 2016. This will offer a middle-ground for customers who are willing to pay extra for a more comfortable seat but can't afford a business class ticket.
American Airlines is also following its peers by moving from a miles-based to a spending-based loyalty program in late 2016. This could have revenue benefits because it will result in fewer award tickets for customers who buy the lowest fares.
Finally, American is working on a "basic economy" fare type to appeal to more price-sensitive travelers. This approach helped Delta Air Lines minimize its unit revenue declines last year. The new fare type should be ready for launch later this year.
With all of these catalysts ahead, American Airlines' unit revenue trajectory should improve steadily going forward. With the stock trading for less than 6 times forward earnings, there's plenty of upside if investors gain confidence that American's recent profit growth won't be swallowed up by revenue declines in the next few years.
The next billion-dollar iSecret
The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article American Airlines Delivers Strong Earnings, but Skeptics Abound originally appeared on Fool.com.
Adam Levine-Weinberg is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. 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.
|
Airline investors don't seem to treat earnings growth driven by fuel cost savings as "real" when it is accompanied by declining unit revenue. And American's passenger revenue per available seat mile (PRASM) came under severe pressure in 2015, due to the strong dollar, economic weakness in key foreign markets like Brazil and Venezuela, and rising competition from Southwest Airlines , particularly in Dallas. With the stock trading for less than 6 times forward earnings, there's plenty of upside if investors gain confidence that American's recent profit growth won't be swallowed up by revenue declines in the next few years.
|
Revenue trends will improve later this year American Airlines executives told investors last week that unit revenue trends should improve throughout 2016. Adam Levine-Weinberg is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
Revenue trends will improve later this year American Airlines executives told investors last week that unit revenue trends should improve throughout 2016. Photo: American Airlines For example, American will introduce the first true long-haul premium economy section among U.S. airlines in late 2016. With the stock trading for less than 6 times forward earnings, there's plenty of upside if investors gain confidence that American's recent profit growth won't be swallowed up by revenue declines in the next few years.
|
For the full year, PRASM fell 5.4% year over year. Looking ahead Thus, American Airlines has a number of key catalysts coming in the next two or three quarters that should improve its unit revenue performance. Photo: American Airlines For example, American will introduce the first true long-haul premium economy section among U.S. airlines in late 2016.
|
8084.0
|
2016-02-01 00:00:00 UTC
|
Company News for February 01, 2016
|
AAL
|
https://www.nasdaq.com/articles/company-news-for-february-01-2016-2016-02-01
|
nan
|
nan
|
• Shares of Amgen Inc. ( AMGN ) gained 3% after announcing fourth quarter earnings of $2.61 per share, outpacing the Zacks Consensus Estimate of $2.27
• American Airlines Group Inc.'s ( AAL ) shares rose 2.2% after declaring fourth quarter adjusted earnings per share of $2.0, beating the Zacks Consensus Estimate by 4 cents
• Shares of Colgate-Palmolive Co. ( CL ) climbed 3.9% after reporting fourth quarter adjusted earnings of 73 cents per share that came a penny ahead of the Zacks Consensus Estimate
• Phillips 66's ( PSX ) shares increased 1.8% after posting fourth quarter earnings from continuing operations came in at $1.31, above the Zacks Consensus Estimate of $1.30
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
AMGEN INC (AMGN): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
COLGATE PALMOLI (CL): Free Stock Analysis Report
PHILLIPS 66 (PSX): 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.
|
• Shares of Amgen Inc. ( AMGN ) gained 3% after announcing fourth quarter earnings of $2.61 per share, outpacing the Zacks Consensus Estimate of $2.27 • American Airlines Group Inc.'s ( AAL ) shares rose 2.2% after declaring fourth quarter adjusted earnings per share of $2.0, beating the Zacks Consensus Estimate by 4 cents • Shares of Colgate-Palmolive Co. ( CL ) climbed 3.9% after reporting fourth quarter adjusted earnings of 73 cents per share that came a penny ahead of the Zacks Consensus Estimate • Phillips 66's ( PSX ) shares increased 1.8% after posting fourth quarter earnings from continuing operations came in at $1.31, above the Zacks Consensus Estimate of $1.30 Want the latest recommendations from Zacks Investment Research? Click to get this free report AMGEN INC (AMGN): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report COLGATE PALMOLI (CL): Free Stock Analysis Report PHILLIPS 66 (PSX): Free Stock Analysis Report To read this article on Zacks.com click here. Today, you can download 7 Best Stocks for the Next 30 Days.
|
• Shares of Amgen Inc. ( AMGN ) gained 3% after announcing fourth quarter earnings of $2.61 per share, outpacing the Zacks Consensus Estimate of $2.27 • American Airlines Group Inc.'s ( AAL ) shares rose 2.2% after declaring fourth quarter adjusted earnings per share of $2.0, beating the Zacks Consensus Estimate by 4 cents • Shares of Colgate-Palmolive Co. ( CL ) climbed 3.9% after reporting fourth quarter adjusted earnings of 73 cents per share that came a penny ahead of the Zacks Consensus Estimate • Phillips 66's ( PSX ) shares increased 1.8% after posting fourth quarter earnings from continuing operations came in at $1.31, above the Zacks Consensus Estimate of $1.30 Want the latest recommendations from Zacks Investment Research? Click to get this free report AMGEN INC (AMGN): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report COLGATE PALMOLI (CL): Free Stock Analysis Report PHILLIPS 66 (PSX): 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.
|
• Shares of Amgen Inc. ( AMGN ) gained 3% after announcing fourth quarter earnings of $2.61 per share, outpacing the Zacks Consensus Estimate of $2.27 • American Airlines Group Inc.'s ( AAL ) shares rose 2.2% after declaring fourth quarter adjusted earnings per share of $2.0, beating the Zacks Consensus Estimate by 4 cents • Shares of Colgate-Palmolive Co. ( CL ) climbed 3.9% after reporting fourth quarter adjusted earnings of 73 cents per share that came a penny ahead of the Zacks Consensus Estimate • Phillips 66's ( PSX ) shares increased 1.8% after posting fourth quarter earnings from continuing operations came in at $1.31, above the Zacks Consensus Estimate of $1.30 Want the latest recommendations from Zacks Investment Research? Click to get this free report AMGEN INC (AMGN): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report COLGATE PALMOLI (CL): Free Stock Analysis Report PHILLIPS 66 (PSX): 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.
|
• Shares of Amgen Inc. ( AMGN ) gained 3% after announcing fourth quarter earnings of $2.61 per share, outpacing the Zacks Consensus Estimate of $2.27 • American Airlines Group Inc.'s ( AAL ) shares rose 2.2% after declaring fourth quarter adjusted earnings per share of $2.0, beating the Zacks Consensus Estimate by 4 cents • Shares of Colgate-Palmolive Co. ( CL ) climbed 3.9% after reporting fourth quarter adjusted earnings of 73 cents per share that came a penny ahead of the Zacks Consensus Estimate • Phillips 66's ( PSX ) shares increased 1.8% after posting fourth quarter earnings from continuing operations came in at $1.31, above the Zacks Consensus Estimate of $1.30 Want the latest recommendations from Zacks Investment Research? Click to get this free report AMGEN INC (AMGN): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report COLGATE PALMOLI (CL): Free Stock Analysis Report PHILLIPS 66 (PSX): Free Stock Analysis Report To read this article on Zacks.com click here. Today, you can download 7 Best Stocks for the Next 30 Days.
|
8085.0
|
2016-01-29 00:00:00 UTC
|
American Airlines Tops Q4 Earnings, PRASM Woes Persist
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-tops-q4-earnings-prasm-woes-persist-2016-01-29
|
nan
|
nan
|
American Airlines Group Inc.AAL reported higher-than-expected earnings in the fourth quarter of 2015. The company recorded adjusted earnings per share of $2.0, beating the Zacks Consensus Estimate by 4 cents.
American Airlines Group reported operating revenues of $9.63 billion in the fourth quarter, representing a 5.2% decrease over the comparable figure in the year-ago period. Quarterly revenues were marginally short of the Zacks Consensus Estimate of $9.67 billion.
Consolidated passenger revenue per available seat mile (PRASM) declined 6% to 12.69 cents in the reported quarter. Consolidated yield declined 8.9% to 15.34 cents. Traffic grew 3.8% on a 0.6% capacity expansion. Consolidated load factor (% of seats filled by passengers) naturally improved as traffic growth outpaced capacity expansion. Load factor climbed to 82.7% from the comparable year-ago figure of 80.1%.
American Airlines' results in the final quarter of 2015 benefited from low fuel costs. This is because fuel costs account for a major chunk of an airline's operating expenses. Total operating expenses declined 7.9% to $8.6 billion on the back of a 40.8% reduction in fuel costs.
Backed by a strong quarterly performance, the company looks to return more to its shareholders through dividends and share repurchases. During the fourth quarter, the company returned $1.2 billion to its shareholders through the payment of $72 million in dividends and buyback of shares worth $1.1 billion.
Furthermore, the carrier also declared a dividend of 10 cents per share to be paid on Feb 24, 2016, to shareholders on record as of Feb 10. We are impressed by the company's consistent efforts to reward shareholders through stock repurchases and dividend payments.
Annual Results
The company's earnings for full-year 2015 came in at $9.12 per share, ahead of the Zacks Consensus Estimate by 4 cents. Full year revenues reached $41 billion, in line with the Zacks Consensus Estimate. The year 2015 saw the company buying back 85.1 million shares for $3.6 billion.
American Airlines is constantly looking to introduce new aircraft and remove old ones from its fleet. Keeping with its aim to modernize its fleet, the carrier intends to take delivery of 55 new mainline aircraft and 49 regional ones, and remove 92 mainline and 29 regional aircraft in 2016.
Zacks Rank
Currently, American Airlines Group has a Zacks Rank #2 (Buy). Investors interested in the airline space may also consider stocks like Delta Air Lines Inc. DAL , Southwest Airlines Co. LUV and Hawaiian Holdings Inc. HA , all of which sport a Zacks Rank #1 (Strong Buy).
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 >>
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
AMER AIRLINES (AAL): Free Stock Analysis Report
SOUTHWEST AIR (LUV): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
HAWAIIAN HLDGS (HA): 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.
|
American Airlines Group Inc.AAL reported higher-than-expected earnings in the fourth quarter of 2015. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group reported operating revenues of $9.63 billion in the fourth quarter, representing a 5.2% decrease over the comparable figure in the year-ago period.
|
Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc.AAL reported higher-than-expected earnings in the fourth quarter of 2015. American Airlines Group reported operating revenues of $9.63 billion in the fourth quarter, representing a 5.2% decrease over the comparable figure in the year-ago period.
|
Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc.AAL reported higher-than-expected earnings in the fourth quarter of 2015. American Airlines Group reported operating revenues of $9.63 billion in the fourth quarter, representing a 5.2% decrease over the comparable figure in the year-ago period.
|
Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc.AAL reported higher-than-expected earnings in the fourth quarter of 2015. American Airlines Group reported operating revenues of $9.63 billion in the fourth quarter, representing a 5.2% decrease over the comparable figure in the year-ago period.
|
8086.0
|
2016-01-29 00:00:00 UTC
|
JetBlue (JBLU) Q4 Earnings & Revenues Beat Estimates
|
AAL
|
https://www.nasdaq.com/articles/jetblue-jblu-q4-earnings-revenues-beat-estimates-2016-01-29
|
nan
|
nan
|
Low cost carrier JetBlue Airways CorporationJBLU reported fourth-quarter 2015 net income of $190 million or 56 cents per share compared with $88 million or 26 cents in the year-ago quarter. The earnings figure also outpaced the Zacks Consensus Estimate of 51 cents.
JetBlue Airways Corporation (JBLU) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany
Total operating revenue climbed 10.2% year over year to $1,594 million, above the Zacks Consensus Estimate of $1,571 million. Passenger revenues in the quarter under review increased 8.3% year over year to $1,438 million.
Operating Statistics
Airline traffic, measured in revenue passenger miles, increased 12.4% year over year in the reported quarter along with 10.4% growth in capacity. Moreover, load factor (percentage of seats filled with passengers) inched up 150 basis points (bps) year over year to 83.6%.
Yield per passenger mile fell 3.6% year over year to 13.62 cents in the reported quarter. Passenger revenue per available seat mile (PRASM) dropped 1.9% on an annual basis to 11.39 cents while operating revenue per available seat mile decreased 0.2% to 12.62 cents in the same period.
Operating Income and Expenses
In the fourth quarter of 2015, total operating expenses decreased 1.1% year over year to $1,264 million, primarily owing to a 31.3% year-over-year decline in fuel expenses, offset by higher salaries and wages (up 21.2%). JetBlue's operating unit cost or cost per available seat mile (CASM) deteriorated 10.4% year over year while excluding fuel and profit sharing, CASM increased 0.7% from the year-ago quarter.
Operating income came in at $330 million, up 95.3% year over year. Operating margin increased 900 bps year over year to 20.7%.
Balance Sheet
JetBlue ended the fourth quarter with unrestricted cash and short-term investments of $876 million. Total debt, at the end of 2015, was $1,843 million compared with $2,233 million at the end of 2014.
Guidance
For the first quarter of 2016, the carrier expects fuel price, net of hedges, to be $1.12 per gallon. Capacity in the first quarter is projected to increase in the band of 14% to 16%. For full-year 2016, the metric is expected to increase in the range of 8.5% to 10.5%. Consolidated operating cost per available seat mile, excluding fuel and profit sharing, is expected to remain flat or decline 2% in first-quarter 2016. For full-year 2016, the metric is expected to remain flat or grow 2%.
Our Analysis
We believe JetBlue will continue to benefit from increasing travel demand, network expansion, fleet re-designing, capital expenditure management and lower fuel prices. Additionally, emphasis on enhancing presence in major growth regions along with various Caribbean and Latin American markets will likely spur growth.
Moreover, JetBlue's Mint service which is available at an affordable cost is not very popular but is likely to safeguard its position against legacy carriers like Delta Air Lines Inc. DAL , United Continental Holdings Inc. UAL and American Airlines Group Inc. AAL .
JetBlue currently carries a Zacks Rank #2 (Buy).
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 >>
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 (JBLU): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
AMER AIRLINES (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.
|
Moreover, JetBlue's Mint service which is available at an affordable cost is not very popular but is likely to safeguard its position against legacy carriers like Delta Air Lines Inc. DAL , United Continental Holdings Inc. UAL and American Airlines Group Inc. AAL . Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Consolidated operating cost per available seat mile, excluding fuel and profit sharing, is expected to remain flat or decline 2% in first-quarter 2016.
|
Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Moreover, JetBlue's Mint service which is available at an affordable cost is not very popular but is likely to safeguard its position against legacy carriers like Delta Air Lines Inc. DAL , United Continental Holdings Inc. UAL and American Airlines Group Inc. AAL . Low cost carrier JetBlue Airways CorporationJBLU reported fourth-quarter 2015 net income of $190 million or 56 cents per share compared with $88 million or 26 cents in the year-ago quarter.
|
Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Moreover, JetBlue's Mint service which is available at an affordable cost is not very popular but is likely to safeguard its position against legacy carriers like Delta Air Lines Inc. DAL , United Continental Holdings Inc. UAL and American Airlines Group Inc. AAL . JetBlue Airways Corporation (JBLU) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany Total operating revenue climbed 10.2% year over year to $1,594 million, above the Zacks Consensus Estimate of $1,571 million.
|
Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Moreover, JetBlue's Mint service which is available at an affordable cost is not very popular but is likely to safeguard its position against legacy carriers like Delta Air Lines Inc. DAL , United Continental Holdings Inc. UAL and American Airlines Group Inc. AAL . Passenger revenues in the quarter under review increased 8.3% year over year to $1,438 million.
|
8087.0
|
2016-01-29 00:00:00 UTC
|
American Airlines Group (AAL) Beats on Q4 Earnings
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-group-aal-beats-on-q4-earnings-2016-01-29
|
nan
|
nan
|
American Airlines Group AAL came into existence following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways. The 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 each of the last four quarters, with an average beat of 1.36%.
Zacks Rank : Currently, American Airlines Group has a Zacks Rank #2 (Buy), but that could change following the company's earnings report which was just released. 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 $2.0, beating the Zacks Consensus Estimate of $1.96. The company's earnings for full-year 2015 came in at $9.12 per share, which beat the Zacks Consensus Estimate by $0.04.
Revenue : Revenues of $9.63 billion were 5.2% below the year-ago figure. Quarterly revenues were marginally short of the Zacks Consensus Estimate of $9.67 billion. The carrier's revenues for full-year 2015 came in at $41 billion, in line with the Zacks Consensus Estimate.
Key Stats : American Airlines Group's results in the quarter benefited from low fuel costs. This is because fuel costs account for a major chunk of an airline's operating expenses. During the quarter, the company returned $1.2 billion to its shareholders through the payment of $72 million in dividends and buyback of shares worth of $1.1 billion. Furthermore, the carrier The Company also declared a dividend of $0.10 per share. The dividend will be paid on Feb. 24, 2016, to the shareholders on Feb. 10. We are impressed by the company's efforts to reward shareholders through stock repurchases and dividend payments.
Stock Price : The earnings beat pleased the investors. Shares of the company gained 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!
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 >>
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
AMER AIRLINES (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.
|
American Airlines Group AAL came into existence following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The Fort Worth, Texas based company serves customers with more than 6,700 daily flights in more than 50 nations across the globe.
|
Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group AAL came into existence following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways. We have highlighted some of the key stats from this just-revealed announcement below: Earnings : American Airlines Group beat on earnings.
|
American Airlines Group AAL came into existence following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Rank : Currently, American Airlines Group has a Zacks Rank #2 (Buy), but that could change following the company's earnings report which was just released.
|
American Airlines Group AAL came into existence following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The company's earnings for full-year 2015 came in at $9.12 per share, which beat the Zacks Consensus Estimate by $0.04.
|
8088.0
|
2016-01-28 00:00:00 UTC
|
5 Mouthwatering Stocks on Sale Now
|
AAL
|
https://www.nasdaq.com/articles/5-mouthwatering-stocks-sale-now-2016-01-28
|
nan
|
nan
|
InvestorPlaceInvestorPlace - Stock Market News, Stock Advice & Trading Tips
Volatility? Yes, please! This is your golden opportunity to serve yourself some great companies and stocks on sale…
Is the worst of the storm over? U-bet.
Can Jane the investor and John the trader come out and play?
As they say in my birthplace, Brooklyn, u-bet (which is also the name of a legendary , Brooklyn-born chocolate sauce).
Speaking of chocolate sauce, investors just got a big dollop of it. So did traders.
Investors are seeing some great companies and stocks on sale. Valuations have come down to be borderline ridiculous for some of them. More on that in a minute.
Market volatility is creating some great premiums for traders selling options -please don't buy them, sell them.
Double chocolate for all who think like investors and trade like traders. Well, traders smart enough to sell options. Remember, 80-85% of all options expire worthless.
Someone makes money off of speculators, and that someone should be you.
What looks cheap?
The 10 Best Stocks for 2016
Here's a list. I own them all because guys from Brooklyn eat their own dog food.
Make that chocolate sauce.
Let's take a look at five fantastic stocks on sale that you'll want to grab now…
Consistently Beat Wall Street to the Stocks They Want to Buy Using Just One Number Once you master this strategy you'll never again be dependent on others for trade ideas, AND you'll know how to manage your PE Gap Trades for maximum profits.Get The One Number Here
Blackstone ( BX )
Blackstone ( BX ) is the best private equity firm in the world, with a roughly 8% yield…
… and the stock has almost been cut in half.
Three words: get in now.
Apple ( AAPL )
Ignore the noise; China isn't going medieval on us.
Apple ( AAPL ) is the only company in the world that makes money on (a.) laptops, (b.) smart phones, and (c.) tablets.
Enough said.
American Airlines( AAL )
American Airlines ( AAL ) has a P/E under 5 and earnings coming up.
Consumers now avoid cashmere sweaters and new furniture, instead choosing to travel on jets that use fuel at less than half the cost of fuel just one year ago
Halliburton( HAL )
Yes, people from Brooklyn are contrarians.
Halliburton ( HAL ) won't stay below $30 forever, so get in cheap.
Competitor Schlumberger ( SLB ) just beat on earnings; HAL could do the same.
Gilead Sciences( GILD )
Selling at less than half the valuation of the S&P 500 , Gilead ( GILD ) is the best biopharma company on the planet.
There isn't much more to say except that the doomsayers on Wall Street are so wrong about Gilead that it's laughable.
The doom? Not enough potential hepatitis C sufferers.
My answer? The World Health Organization says there are 125-165 million of them around the world… that's a 500-year supply.
Don't Stop There!
One more thing about those five company/stock names that I just shared with you…
If you agree with me and you buy them, sell some calls and generate cash -right now.
You can even use the cash to buy some puts if you think the rally can't last.
This is called hedging, and it's something no longer done by hedge funds. Since most hedge funds lost money last year, you don't want to do what they're doing anyway.
Enjoy the chocolate sauce while the geniuses and lemmings on Wall Street are still looking for the ice cream parlor.
This post originally appeared in mainstreetinvestor.com .
More From InvestorPlace
Top 10 S&P 500 Dividend Stocks for JanuaryThe 10 Best Stocks to Buy for the Turnaround6 Energy Stocks That Might Not Survive Much Longer Consistently Beat Wall Street to the Stocks They Want to Buy Using Just One Number Once you master this strategy you'll never again be dependent on others for trade ideas, AND you'll know how to manage your PE Gap Trades for maximum profits.Get The One Number Here
The post 5 Mouthwatering Stocks on Sale Now 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.
|
American Airlines( AAL ) American Airlines ( AAL ) has a P/E under 5 and earnings coming up. Let's take a look at five fantastic stocks on sale that you'll want to grab now… Consistently Beat Wall Street to the Stocks They Want to Buy Using Just One Number Once you master this strategy you'll never again be dependent on others for trade ideas, AND you'll know how to manage your PE Gap Trades for maximum profits.Get The One Number Here Blackstone ( BX ) Blackstone ( BX ) is the best private equity firm in the world, with a roughly 8% yield… … and the stock has almost been cut in half. One more thing about those five company/stock names that I just shared with you… If you agree with me and you buy them, sell some calls and generate cash -right now.
|
American Airlines( AAL ) American Airlines ( AAL ) has a P/E under 5 and earnings coming up. Let's take a look at five fantastic stocks on sale that you'll want to grab now… Consistently Beat Wall Street to the Stocks They Want to Buy Using Just One Number Once you master this strategy you'll never again be dependent on others for trade ideas, AND you'll know how to manage your PE Gap Trades for maximum profits.Get The One Number Here Blackstone ( BX ) Blackstone ( BX ) is the best private equity firm in the world, with a roughly 8% yield… … and the stock has almost been cut in half. More From InvestorPlace Top 10 S&P 500 Dividend Stocks for JanuaryThe 10 Best Stocks to Buy for the Turnaround6 Energy Stocks That Might Not Survive Much Longer Consistently Beat Wall Street to the Stocks They Want to Buy Using Just One Number Once you master this strategy you'll never again be dependent on others for trade ideas, AND you'll know how to manage your PE Gap Trades for maximum profits.Get The One Number Here The post 5 Mouthwatering Stocks on Sale Now appeared first on InvestorPlace .
|
American Airlines( AAL ) American Airlines ( AAL ) has a P/E under 5 and earnings coming up. Market volatility is creating some great premiums for traders selling options -please don't buy them, sell them. Let's take a look at five fantastic stocks on sale that you'll want to grab now… Consistently Beat Wall Street to the Stocks They Want to Buy Using Just One Number Once you master this strategy you'll never again be dependent on others for trade ideas, AND you'll know how to manage your PE Gap Trades for maximum profits.Get The One Number Here Blackstone ( BX ) Blackstone ( BX ) is the best private equity firm in the world, with a roughly 8% yield… … and the stock has almost been cut in half.
|
American Airlines( AAL ) American Airlines ( AAL ) has a P/E under 5 and earnings coming up. Well, traders smart enough to sell options. Apple ( AAPL ) is the only company in the world that makes money on (a.)
|
8089.0
|
2016-01-28 00:00:00 UTC
|
Pre-Market Earnings Report for January 29, 2016 : CVX, MA, HON, SPG, PSX, PX, APD, AAL, PCAR, TYC, WHR, NWL
|
AAL
|
https://www.nasdaq.com/articles/pre-market-earnings-report-january-29-2016-cvx-ma-hon-spg-psx-px-apd-aal-pcar-tyc-whr-nwl
|
nan
|
nan
|
The following companies are expected to report earnings prior to market open on 01/29/2016. Visit our Earnings Calendar for a full list of expected earnings releases.
Chevron Corporation ( CVX ) is reporting for the quarter ending December 31, 2015. The oil company's consensus earnings per share forecast from the 9 analysts that follow the stock is $0.48. This value represents a 74.05% decrease compared to the same quarter last year. CVX missed the consensus earnings per share in the 2nd calendar quarter of 2015 by -73.45%. Zacks Investment Research reports that the 2015 Price to Earnings ratio for CVX is 23.33 vs. an industry ratio of 13.00, implying that they will have a higher earnings growth than their competitors in the same industry.
Mastercard Incorporated ( MA ) is reporting for the quarter ending December 31, 2015. The financial transactions company's consensus earnings per share forecast from the 19 analysts that follow the stock is $0.69. This value represents a 4.17% decrease compared to the same quarter last year. In the past year MA has met analyst expectations once and beat the expectations the other three quarters. Zacks Investment Research reports that the 2015 Price to Earnings ratio for MA is 25.39 vs. an industry ratio of 16.80, implying that they will have a higher earnings growth than their competitors in the same industry.
Honeywell International Inc. ( HON ) is reporting for the quarter ending December 31, 2015. The diversified operations company's consensus earnings per share forecast from the 10 analysts that follow the stock is $1.59. This value represents a 11.19% increase compared to the same quarter last year. In the past year HON has beat the expectations every quarter. The highest one was in the 3rd calendar quarter where they beat the consensus by 1.29%. Zacks Investment Research reports that the 2015 Price to Earnings ratio for HON is 15.90 vs. an industry ratio of 11.60, implying that they will have a higher earnings growth than their competitors in the same industry.
Simon Property Group, Inc. ( SPG ) is reporting for the quarter ending December 31, 2015. The reit company's consensus earnings per share forecast from the 11 analysts that follow the stock is $2.44. This value represents a 1.21% decrease compared to the same quarter last year. In the past year SPG has met analyst expectations once and beat the expectations the other three quarters. Zacks Investment Research reports that the 2015 Price to Earnings ratio for SPG is 18.72 vs. an industry ratio of 15.60, implying that they will have a higher earnings growth than their competitors in the same industry.
Phillips 66 ( PSX ) is reporting for the quarter ending December 31, 2015. The oil refining company's consensus earnings per share forecast from the 7 analysts that follow the stock is $1.30. This value represents a 20.25% decrease compared to the same quarter last year. In the past year PSX has beat the expectations every quarter. The highest one was in the 3rd calendar quarter where they beat the consensus by 33.04%. Zacks Investment Research reports that the 2015 Price to Earnings ratio for PSX is 10.16 vs. an industry ratio of 12.80.
Praxair, Inc. ( PX ) is reporting for the quarter ending December 31, 2015. The chemical company's consensus earnings per share forecast from the 11 analysts that follow the stock is $1.47. This value represents a 6.37% decrease compared to the same quarter last year. In the past year PX has met analyst expectations three times and beat the expectations the other quarter. Zacks Investment Research reports that the 2015 Price to Earnings ratio for PX is 16.91 vs. an industry ratio of 14.00, implying that they will have a higher earnings growth than their competitors in the same industry.
Air Products and Chemicals, Inc. ( APD ) is reporting for the quarter ending December 31, 2015. The chemical company's consensus earnings per share forecast from the 8 analysts that follow the stock is $1.70. This value represents a 9.68% increase compared to the same quarter last year. In the past year APD has beat the expectations every quarter. The highest one was in the 3rd calendar quarter where they beat the consensus by 1.11%. Zacks Investment Research reports that the 2016 Price to Earnings ratio for APD is 16.02 vs. an industry ratio of 14.00, implying that they will have a higher earnings growth than their competitors in the same industry.
American Airlines Group, Inc. ( AAL ) is reporting for the quarter ending December 31, 2015. The airline company's consensus earnings per share forecast from the 9 analysts that follow the stock is $1.96. This value represents a 28.95% increase compared to the same quarter last year. In the past year AAL has beat the expectations every quarter. The highest one was in the 3rd calendar quarter where they beat the consensus by 1.84%. Zacks Investment Research reports that the 2015 Price to Earnings ratio for AAL is 4.37 vs. an industry ratio of 7.40.
PACCAR Inc. ( PCAR ) is reporting for the quarter ending December 31, 2015. The auto (domestic) company's consensus earnings per share forecast from the 13 analysts that follow the stock is $1.03. This value represents a 7.21% decrease compared to the same quarter last year. In the past year PCAR has beat the expectations every quarter. The highest one was in the 3rd calendar quarter where they beat the consensus by 4.31%. Zacks Investment Research reports that the 2015 Price to Earnings ratio for PCAR is 10.24 vs. an industry ratio of -2.00, implying that they will have a higher earnings growth than their competitors in the same industry.
Tyco International plc ( TYC ) is reporting for the quarter ending December 31, 2015. The protection safety company's consensus earnings per share forecast from the 6 analysts that follow the stock is $0.41. This value represents a 16.33% decrease compared to the same quarter last year. In the past year TYC has met analyst expectations twice and beat the expectations the other two quarters. Zacks Investment Research reports that the 2016 Price to Earnings ratio for TYC is 15.93 vs. an industry ratio of 4.00, implying that they will have a higher earnings growth than their competitors in the same industry.
Whirlpool Corporation ( WHR ) is reporting for the quarter ending December 31, 2015. The household appliance company's consensus earnings per share forecast from the 4 analysts that follow the stock is $3.90. This value represents a 10.80% increase compared to the same quarter last year. WHR missed the consensus earnings per share in the 1st calendar quarter of 2015 by -14.06%. Zacks Investment Research reports that the 2015 Price to Earnings ratio for WHR is 10.88 vs. an industry ratio of 11.60.
Newell Rubbermaid Inc. ( NWL ) is reporting for the quarter ending December 31, 2015. The consumer company's consensus earnings per share forecast from the 12 analysts that follow the stock is $0.56. This value represents a 14.29% increase compared to the same quarter last year. In the past year NWL has beat the expectations every quarter. The highest one was in the 3rd calendar quarter where they beat the consensus by 1.64%. The days to cover, as reported in the 12/31/2015 short interest update, increased 463.49% from previous report on 12/15/2015. Zacks Investment Research reports that the 2015 Price to Earnings ratio for NWL is 17.04 vs. an industry ratio of 16.70, implying that they will have a higher earnings growth than their competitors in the same industry.
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.
|
American Airlines Group, Inc. ( AAL ) is reporting for the quarter ending December 31, 2015. In the past year AAL has beat the expectations every quarter. Zacks Investment Research reports that the 2015 Price to Earnings ratio for AAL is 4.37 vs. an industry ratio of 7.40.
|
American Airlines Group, Inc. ( AAL ) is reporting for the quarter ending December 31, 2015. In the past year AAL has beat the expectations every quarter. Zacks Investment Research reports that the 2015 Price to Earnings ratio for AAL is 4.37 vs. an industry ratio of 7.40.
|
American Airlines Group, Inc. ( AAL ) is reporting for the quarter ending December 31, 2015. In the past year AAL has beat the expectations every quarter. Zacks Investment Research reports that the 2015 Price to Earnings ratio for AAL is 4.37 vs. an industry ratio of 7.40.
|
American Airlines Group, Inc. ( AAL ) is reporting for the quarter ending December 31, 2015. In the past year AAL has beat the expectations every quarter. Zacks Investment Research reports that the 2015 Price to Earnings ratio for AAL is 4.37 vs. an industry ratio of 7.40.
|
8090.0
|
2016-01-28 00:00:00 UTC
|
Why Earnings Season Could Be Great for American Airlines (AAL)
|
AAL
|
https://www.nasdaq.com/articles/why-earnings-season-could-be-great-for-american-airlines-aal-2016-01-28
|
nan
|
nan
|
Investors are always looking for stocks that are poised to beat at earnings season and American Airlines Group Inc.AAL may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.
That is because American Airlines is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings-with the most up-to-date information possible-is a pretty good indicator of some favorable trends underneath the surface for AAL in this report.
In fact, the Most Accurate Estimate for the current quarter is currently at $1.99 per share for AAL, compared to a broader Zacks Consensus Estimate of $1.96 per share. This suggests that analysts have very recently bumped up their estimates for AAL, giving the stock a Zacks Earnings ESP of 1.53% heading into earnings season.
Why Is This Important?
A positive reading for the Zacks Earnings ESP has proven to be very powerful in producing both positive surprises, and outperforming the market. Our recent 10 year backtest shows that stocks that have a positive Earnings ESP and a Zacks Rank #3 (Hold) or better show a positive surprise nearly 70% of the time, and have returned over 28% on average in annual returns (see more Top Earnings ESP stocks here ).
Given that AAL has a Zacks Rank #2 (Buy) and an ESP in positive territory, investors might want to consider this stock ahead of earnings. Clearly, recent earnings estimate revisions suggest that good things are ahead for American Airlines, and that a beat might be in the cards for the upcoming report.
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 >>
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
AMER AIRLINES (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.
|
After all, analysts raising estimates right before earnings-with the most up-to-date information possible-is a pretty good indicator of some favorable trends underneath the surface for AAL in this report. Given that AAL has a Zacks Rank #2 (Buy) and an ESP in positive territory, investors might want to consider this stock ahead of earnings. Investors are always looking for stocks that are poised to beat at earnings season and American Airlines Group Inc.AAL may be one such company.
|
Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Investors are always looking for stocks that are poised to beat at earnings season and American Airlines Group Inc.AAL may be one such company. After all, analysts raising estimates right before earnings-with the most up-to-date information possible-is a pretty good indicator of some favorable trends underneath the surface for AAL in this report.
|
This suggests that analysts have very recently bumped up their estimates for AAL, giving the stock a Zacks Earnings ESP of 1.53% heading into earnings season. Given that AAL has a Zacks Rank #2 (Buy) and an ESP in positive territory, investors might want to consider this stock ahead of earnings. Investors are always looking for stocks that are poised to beat at earnings season and American Airlines Group Inc.AAL may be one such company.
|
Given that AAL has a Zacks Rank #2 (Buy) and an ESP in positive territory, investors might want to consider this stock ahead of earnings. Investors are always looking for stocks that are poised to beat at earnings season and American Airlines Group Inc.AAL may be one such company. After all, analysts raising estimates right before earnings-with the most up-to-date information possible-is a pretty good indicator of some favorable trends underneath the surface for AAL in this report.
|
8091.0
|
2016-01-27 00:00:00 UTC
|
What's in Store for Xerox (XRX) This Earnings Season?
|
AAL
|
https://www.nasdaq.com/articles/whats-in-store-for-xerox-xrx-this-earnings-season-2016-01-27
|
nan
|
nan
|
Xerox CorporationXRX is scheduled to report fourth-quarter 2015 results before the opening bell on Jan 29. Over the trailing four quarters, the company posted a positive average earnings surprise of 3.86%, beating estimates twice.
Let's see how things are shaping up prior to this announcement.
Factors at Play
Xerox recently won a 7-year contract from the Florida Department of Transportation ("FDOT") for the implementation of a state-of-the-art customer service system to process toll transactions across the state. The deal involves processing more than one billion transactions per year and managing over five million accounts. This deal should boost fourth-quarter results for the company.
Also, CPAS, a Xerox company in Los Angeles, has entered into a 3-year partnership with the Los Angeles Fire and Police Pension System to improve its administration and record keeping operations.
Additionally, Xerox has decided to extend the multimillion dollar contract with the Defense Advanced Research Projects Agency ("DARPA") to develop its Disintegration upon Stress Release Trigger ("DUST") technology under the latter's Vanishing Programmable Resources (VAPR) program. This technology will help commercial organizations and individuals protect personal data. The deal extension is likely to be a positive for the to-be-reported quarter.
During fourth-quarter 2015, the premium information technology services company launched the Xerox Digital Alternatives and Xerox DocuShare personal productivity solutions to improve office efficiency by automating document processing and thereby cut costs. These, in addition to a couple of long-term contracts that Xerox signed recently, should drive profits in the fourth quarter.
However, continuing appreciation of the U.S. dollar with respect to other currencies might weigh on Xerox's international revenues and margins. The company garners a major portion of its aggregate revenues from Japan, and thus the currency headwind is likely to have a significant impact on the upcoming results.
Given the current market scenario, Xerox anticipates diluted earnings within 23-25 cents per share for fourth-quarter 2015. For full-year 2015, GAAP earnings per share are expected in the range of 46-52 cents. Full-year cash flow from operations is projected within $1.6 billion to $1.7 billion, while free cash flow from operations in the $1.3 billion to $1.4 billion range.
Earnings Whispers
Our proven model does not conclusively show that Xerox is likely to beat earnings 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. Unfortunately, this is not the case here.
Zacks ESP : Xerox has an Earnings ESP of 0.00%, as the Most Accurate estimate is in line with the Zacks Consensus Estimate of 29 cents.
Zacks Rank : Xerox's Zacks Rank #3, when combined with a 0.00% ESP, makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.
Stocks to Consider
Here are some stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Amer Airlines AAL has an Earnings ESP of +1.53% and carries a Zacks Rank #2. The company is expected to report fourth-quarter and full-year 2015 results on Jan 29.
Autoliv Inc. ALV has an Earnings ESP of +8.02% and a Zacks Rank #2. The company is set to release fourth-quarter and full-year 2015 results on Jan 29.
Old National Bancorp. ONB carries an Earnings ESP of +17.86% and a Zacks Rank #2. The company is scheduled to release fourth-quarter 2015 results on Feb 1.
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 >>
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
AUTOLIV INC (ALV): Free Stock Analysis Report
OLD NATL BCP (ONB): Free Stock Analysis Report
XEROX CORP (XRX): Free Stock Analysis Report
AMER AIRLINES (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.
|
Stocks to Consider Here are some stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter: Amer Airlines AAL has an Earnings ESP of +1.53% and carries a Zacks Rank #2. Click to get this free report AUTOLIV INC (ALV): Free Stock Analysis Report OLD NATL BCP (ONB): Free Stock Analysis Report XEROX CORP (XRX): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Factors at Play Xerox recently won a 7-year contract from the Florida Department of Transportation ("FDOT") for the implementation of a state-of-the-art customer service system to process toll transactions across the state.
|
Stocks to Consider Here are some stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter: Amer Airlines AAL has an Earnings ESP of +1.53% and carries a Zacks Rank #2. Click to get this free report AUTOLIV INC (ALV): Free Stock Analysis Report OLD NATL BCP (ONB): Free Stock Analysis Report XEROX CORP (XRX): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Full-year cash flow from operations is projected within $1.6 billion to $1.7 billion, while free cash flow from operations in the $1.3 billion to $1.4 billion range.
|
Stocks to Consider Here are some stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter: Amer Airlines AAL has an Earnings ESP of +1.53% and carries a Zacks Rank #2. Click to get this free report AUTOLIV INC (ALV): Free Stock Analysis Report OLD NATL BCP (ONB): Free Stock Analysis Report XEROX CORP (XRX): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks ESP : Xerox has an Earnings ESP of 0.00%, as the Most Accurate estimate is in line with the Zacks Consensus Estimate of 29 cents.
|
Stocks to Consider Here are some stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter: Amer Airlines AAL has an Earnings ESP of +1.53% and carries a Zacks Rank #2. Click to get this free report AUTOLIV INC (ALV): Free Stock Analysis Report OLD NATL BCP (ONB): Free Stock Analysis Report XEROX CORP (XRX): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. This deal should boost fourth-quarter results for the company.
|
8092.0
|
2016-01-26 00:00:00 UTC
|
Will Tyco (TYC) Beat Q1 Earnings on Portfolio Reshuffle?
|
AAL
|
https://www.nasdaq.com/articles/will-tyco-tyc-beat-q1-earnings-on-portfolio-reshuffle-2016-01-26
|
nan
|
nan
|
Security and protection services provider Tyco International Ltd.TYC is scheduled to report first-quarter fiscal 2016 results before the opening bell on Jan 29. In the last reported quarter, earnings were in sync with the Zacks Consensus Estimate. Let's see how things are shaping up for this announcement.
Key Factors in the First Quarter
Tyco is repositioning its portfolio to ensure the right mix of businesses and maximize long-term value for its shareholders. At the same time, Tyco is building on its Internet of Things capabilities with proven expertise in its Installation and Services businesses. It has installed more than one billion fire security and retail sensors and devices globally. These capabilities will enable Tyco to offer new intelligent services for customers ranging from Fortune 500 companies to small businesses.
In addition, Tyco is focusing more on its Global Center of Excellence Network (GCOE), which helps diverse companies to streamline and standardize their fire and security systems globally. GCOE develops technical specifications and work-plans to minimize risks and automate efficiencies, thus helping customers to focus on innovative solutions. The network's global business management system helps it to work seamlessly, sharing talents and workloads across locations for enhanced customer experience. This is likely to generate incremental revenues for the company and boost its bottom line.
There is a potential catalyst in the company's solid balance sheet and healthy liquidity position. The company returns significant cash to shareholders through share buybacks and dividends. Tyco also continues to invest in its businesses to strengthen long-term competitive capabilities for both products and services. Given the integration of Fire and Security businesses, the company is uniquely positioned to bring differentiated solutions to its combined customer base. All these factors are likely to increase its revenues and improve the bottom line in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Tyco is likely to beat earnings this quarter as it lacks the key components. 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. This is not the case here as you will see below:
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently at 0.00%.
Zacks Rank: Tyco's Zacks Rank #3 when combined with 0.00% ESP makes an earnings beat prediction uncertain. On the other hand, the Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
American Airlines Group Inc. AAL , earnings ESP of +1.53% and a Zacks Rank #2.
Ethan Allen Interiors Inc. ETH , earnings ESP of +9.30% and a Zacks Rank #1.
Valero Energy Corporation VLO , earnings ESP of +1.37% and a Zacks Rank #2.
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 >>
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
TYCO INTL PLC (TYC): Free Stock Analysis Report
VALERO ENERGY (VLO): Free Stock Analysis Report
ETHAN ALLEN INT (ETH): Free Stock Analysis Report
AMER AIRLINES (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.
|
Stocks to Consider Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL , earnings ESP of +1.53% and a Zacks Rank #2. Click to get this free report TYCO INTL PLC (TYC): Free Stock Analysis Report VALERO ENERGY (VLO): Free Stock Analysis Report ETHAN ALLEN INT (ETH): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Security and protection services provider Tyco International Ltd.TYC is scheduled to report first-quarter fiscal 2016 results before the opening bell on Jan 29.
|
Click to get this free report TYCO INTL PLC (TYC): Free Stock Analysis Report VALERO ENERGY (VLO): Free Stock Analysis Report ETHAN ALLEN INT (ETH): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks to Consider Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL , earnings ESP of +1.53% and a Zacks Rank #2. Zacks Rank: Tyco's Zacks Rank #3 when combined with 0.00% ESP makes an earnings beat prediction uncertain.
|
Stocks to Consider Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL , earnings ESP of +1.53% and a Zacks Rank #2. Click to get this free report TYCO INTL PLC (TYC): Free Stock Analysis Report VALERO ENERGY (VLO): Free Stock Analysis Report ETHAN ALLEN INT (ETH): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Rank: Tyco's Zacks Rank #3 when combined with 0.00% ESP makes an earnings beat prediction uncertain.
|
Stocks to Consider Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL , earnings ESP of +1.53% and a Zacks Rank #2. Click to get this free report TYCO INTL PLC (TYC): Free Stock Analysis Report VALERO ENERGY (VLO): Free Stock Analysis Report ETHAN ALLEN INT (ETH): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. At the same time, Tyco is building on its Internet of Things capabilities with proven expertise in its Installation and Services businesses.
|
8093.0
|
2016-01-26 00:00:00 UTC
|
JetBlue (JBLU) to Report Q4 Earnings: What's in the Cards?
|
AAL
|
https://www.nasdaq.com/articles/jetblue-jblu-to-report-q4-earnings%3A-whats-in-the-cards-2016-01-26
|
nan
|
nan
|
Low-cost carrier, JetBlue Airways Corp.JBLU is scheduled to unveil its fourth quarter and full year 2015 results on Jan 28, before market opens.
In the third quarter of 2015, the Long Island City, NY-based carrier had delivered a positive earnings surprise of 1.75%. The company has a decent track record with respect to earnings, having outpaced the Zacks Consensus Estimate in three of the last four quarters. Only in the second quarter of 2015, JetBlue had reported in line earnings.
Let's see how things are shaping up for this announcement.
Factors to Consider
As has been the case in the other quarters of 2015, JetBlue's bottom line in the final quarter of 2015 too will gain from plunging oil prices . The carrier expects fuel price (net of hedges) to be $1.77 per gallon in the quarter, down significantly from the year-ago figure of $2.70. Capacity is expected to rise 8.5%-10.5% in the fourth quarter.
While it is a no brainer that the bottom line will be positively impacted by low fuel costs, the picture is not so rosy as far as the top line is concerned. Stocks in the airline space have been hurt by the continuous decline in PRASM, a measure of sales relative to capacity for a carrier. JetBlue expects PRASM in the fourth quarter to decline in the band of 2% to 3%.
JetBlue has been constantly making efforts to expand its operations. We expect an update on the company's capacity expansion plans on the fourth quarter conference call. Moreover, investors would keenly await a commentary on PRASM on the earnings call. Moreover, focus will also be on the company's approach toward flying to Cuba following the inking of an aviation deal with the country to allow 110 scheduled flights on a daily basis to the island. We remind investors that diplomatic ties between the two countries had been severed by the U.S. in 1961.
Earnings Whispers
Our proven model does not conclusively show that JetBlue is likely to beat earnings 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. That is not the case here as you will see below.
Zacks ESP : JetBlue has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 51 cents.
Zacks Rank : JetBlue currently has a Zacks Rank #2 which increases the predictive power of ESP. However, a 0.00% ESP makes surprise prediction problematic.
Upcoming Release
Apart from JetBlue, American Airlines Group AAL - another key player in the airline space - is slated to unveil its fourth quarter results soon, on Jan 29. We believe that while soft oil prices will benefit the bottom line of this Fort Worth, TX-based carrier, PRASM woes will remain, hurting the top line.
Stocks to Consider
Here are some transportation stocks you may want to consider, as our model shows these have the right combination of elements to post an earnings beat:
Spirit Airlines SAVE , which has an earnings ESP of +2.15% apart from a Zacks Rank #2, is expected to reveal results on Feb 9.
Radiant Logistics, Inc. RLGT , with an earnings ESP of +33.33% and a Zacks Rank #3, is expected to reveal results on Feb 11.
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 >>
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 >> - See more at: http://www.zacks.com/commentary/69267/auto-industry-stock-outlook---jan-2016#sthash.7JtyDcRr.dpuf
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 >> - See more at: http://www.zacks.com/commentary/69267/auto-industry-stock-outlook---jan-2016#sthash.7JtyDcRr.dpuf
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 >> - See more at: http://www.zacks.com/commentary/69267/auto-industry-stock-outlook---jan-2016#sthash.7JtyDcRr.dpuf
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 >> - See more at: http://www.zacks.com/commentary/69267/auto-industry-stock-outlook---jan-2016#sthash.7JtyDcRr.dpuf
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 (JBLU): Free Stock Analysis Report
RADIANT LOGIST (RLGT): Free Stock Analysis Report
SPIRIT AIRLINES (SAVE): Free Stock Analysis Report
AMER AIRLINES (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.
|
Upcoming Release Apart from JetBlue, American Airlines Group AAL - another key player in the airline space - is slated to unveil its fourth quarter results soon, on Jan 29. Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report RADIANT LOGIST (RLGT): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Low-cost carrier, JetBlue Airways Corp.JBLU is scheduled to unveil its fourth quarter and full year 2015 results on Jan 28, before market opens.
|
Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report RADIANT LOGIST (RLGT): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Upcoming Release Apart from JetBlue, American Airlines Group AAL - another key player in the airline space - is slated to unveil its fourth quarter results soon, on Jan 29. Radiant Logistics, Inc. RLGT , with an earnings ESP of +33.33% and a Zacks Rank #3, is expected to reveal results on Feb 11.
|
Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report RADIANT LOGIST (RLGT): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Upcoming Release Apart from JetBlue, American Airlines Group AAL - another key player in the airline space - is slated to unveil its fourth quarter results soon, on Jan 29. Zacks ESP : JetBlue has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 51 cents.
|
Upcoming Release Apart from JetBlue, American Airlines Group AAL - another key player in the airline space - is slated to unveil its fourth quarter results soon, on Jan 29. Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report RADIANT LOGIST (RLGT): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Only in the second quarter of 2015, JetBlue had reported in line earnings.
|
8094.0
|
2016-01-26 00:00:00 UTC
|
Will Sony (SNE) Surprise Earnings Estimates in Q3 2015?
|
AAL
|
https://www.nasdaq.com/articles/will-sony-sne-surprise-earnings-estimates-in-q3-2015-2016-01-26
|
nan
|
nan
|
Sony CorporationSNE is set to report earnings results for the third-quarter fiscal 2015 on Jan 29.
In the last two quarters, Sony has jumped back to the growth track, after posting a series of earnings misses. This leading electronics manufacturer reported strong earnings in the last quarter, with impressive gains from sales of image sensors units being the major driver.
Let's see how things are shaping up for this announcement.
Key Factors Influencing Q3 Results
Early in the quarter under review, Sony disclosed the buyout of Softkinetic Systems S.A. to expand its footprint in next-generation range image sensors and solutions. Softkinetic is involved in making 3D sensing computer vision technologies, which include time-of-flight range image sensor and gesture-tracking middleware. The acquisition is likely to boost Sony's already strong performance in the image sensors business.
Sony has also implemented a new operation structure to streamline its Devices segment. The restructuring will boost the competence of the three main businesses - semiconductor, battery and storage media - under the segment. This integration is likely to reinforce the company's sales operations across the globe, thus enhancing revenues.
Sony also made an agreement with PT Telkomunikasi Indonesia to collaborate on the development of the NFC common platform, which will be used as a secure all-in-one solution platform for service providers. This collaboration is targeted at the Indonesian market, and will boost the company's top line.
Other deals signed earlier on, like the logistics joint venture with MITSUI-SOKO HOLDINGS Co., Ltd will further benefit the company's financials in the quarter under review. Sony projects to reap operating income of about ¥13 billion in the quarter ending Mar 31, 2016 from this collaboration.
Apart from this, Sony's PlayStation has been its flagship gaming product and one of its biggest growth drivers over the years. Sony's PlayStation 4 ('PS4') is experiencing the fastest and strongest demand generation in the PS hardware history. The company anticipates continued strong revenues from the sale of PS4 hardware unit and software in the third quarter of fiscal 2015 as well. As a matter of fact, Sony's latest PlayStation video game console had a thriving holiday season, selling a whopping 5.7 million PlayStation 4 consoles.
However, foreign currency fluctuations continued to be a concern and affected the overall revenues and operating income of Sony in the last reported quarter. As many segments of Sony have concentrated operations in specific regions, the currency impact differs from segment to segment. Additionally, weak economic conditions in countries like Japan and China remain an overhang. Sony's third-quarter fiscal 2015 earnings may be impacted by these factors.
Earnings Whispers?
Our proven model does not conclusively show that Sony will beat earnings in its fiscal third 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 you will see below.
Zacks ESP: The difference between the Most Accurate estimate and the Zacks Consensus Estimate is 0.00%.
Zacks Rank: Though Sony has a Zacks Rank #3, its 0.00% ESP makes surprise prediction difficult. Note that stocks with a Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
American Airlines Group Inc. AAL has an Earnings ESP of +1.53% and carries a Zacks Rank #2. It is scheduled to report results on Jan 29.
Tenneco Inc. TEN has an Earnings ESP of +4.39% and a Zacks Rank #3. The company is expected to release earnings results on Feb 9.
Valero Energy Corporation VLO has an Earnings ESP of +1.37% and holds a Zacks Rank #2. It is scheduled to report results on Jan 28.
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 >>
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
SONY CORP ADR (SNE): Free Stock Analysis Report
TENNECO INC (TEN): Free Stock Analysis Report
VALERO ENERGY (VLO): Free Stock Analysis Report
AMER AIRLINES (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.
|
Stocks That Warrant a Look Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL has an Earnings ESP of +1.53% and carries a Zacks Rank #2. Click to get this free report SONY CORP ADR (SNE): Free Stock Analysis Report TENNECO INC (TEN): Free Stock Analysis Report VALERO ENERGY (VLO): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. This leading electronics manufacturer reported strong earnings in the last quarter, with impressive gains from sales of image sensors units being the major driver.
|
Click to get this free report SONY CORP ADR (SNE): Free Stock Analysis Report TENNECO INC (TEN): Free Stock Analysis Report VALERO ENERGY (VLO): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks That Warrant a Look Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL has an Earnings ESP of +1.53% and carries a Zacks Rank #2. 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.
|
Stocks That Warrant a Look Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL has an Earnings ESP of +1.53% and carries a Zacks Rank #2. Click to get this free report SONY CORP ADR (SNE): Free Stock Analysis Report TENNECO INC (TEN): Free Stock Analysis Report VALERO ENERGY (VLO): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
|
Click to get this free report SONY CORP ADR (SNE): Free Stock Analysis Report TENNECO INC (TEN): Free Stock Analysis Report VALERO ENERGY (VLO): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks That Warrant a Look Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL has an Earnings ESP of +1.53% and carries a Zacks Rank #2. The acquisition is likely to boost Sony's already strong performance in the image sensors business.
|
8095.0
|
2016-01-26 00:00:00 UTC
|
3 Great Stocks to Buy When Oil Prices are Low
|
AAL
|
https://www.nasdaq.com/articles/3-great-stocks-buy-when-oil-prices-are-low-2016-01-26
|
nan
|
nan
|
Oil prices have taken a dive over the last 18 months. Many speculate that the price of oil is so low that it could have negative effects on the economy. When oil is this cheap, many employers start to lay off workers and cut back on production, as BP has done . This is a big reason why low oil prices cause fears of slower economic growth.
Oil prices are so low right now because there is simply too much oil in the market. OPEC members are producing the commodity at high levels, and 2016 doesn't look like a year that will see oil surge.
Many companies depend on oil. Take BP Plc BP , for example. Producing and selling oil is the lifeblood of this company's business model, and BP stock hasn't been fairing too well though. When suppliers lose, demanders win.
What we want to find right now are companies on the other side of the bargaining table, namely the companies who consume oil to carry out their business. These companies are buying oil on the cheap and are saving big. This drives up profits for companies, which leads to better earnings numbers.
American Airlines AAL
American Airlines operates an average of 6700 flights per day to over 339 destinations in 54 countries. The airliner is a Zacks Rank #2 (Buy). It also has a sizable market cap of $25.5 billion, making it one of the world's largest airliners.
Something which distinguishes American Airlines from many other airliners is the fact that it does not hedge its exposure to oil. This means that American is benefitting as much as an airline can from lower fuel costs.
There is considerable value in AAL. The stock's forward PE of 5.8 is well below the industry average of 8.71. Its PEG and price-to-sales are 0.7 and 0.62, respectively. Both of those ratios are well below 1, which suggests that there may be value present.
American Airlines has seen impressive EPS growth over the last year. It has also beaten our consensus EPS estimate in each of the last four quarters. Quarterly estimates have been trending upwards, which is a good sign for AAL going into the next earnings season. The airliner is expected to report its earnings at the end of January.
Carnival Corporation CCL )
Carnival Corporation is a strong cruise liner within a solid industry. Leisure & Recreational Services ranks among the top 35% of all industries covered by the Zacks Rank. CCL is a Zacks Rank #2 (Buy).
Cruise liners incur different kinds of operating expenses. One significant operating expense for running cruise ships are fuel costs. Last quarter, according to Motley Fool , Carnival saved 33% on fuel costs annually. Large oil suppliers in OPEC aren't slowing down production yet, so expect Carnival to continue to reap benefits going forward from having lower fuel costs.
Carnival has some nice growth prospects. The corporation already has about half of the market share in the vacation cruise lining industry, yet its PEG of 0.93 is still well below the industry average of 1.51. This is a great sign for future growth. Carnival also has a profit margin of 11.18%, which is significantly higher than the industry's 6.68%.
This corporation has beaten our EPS estimate in each of the last four quarters. Within that time frame, Carnival has topped our consensus estimate by an average of 51.9% per quarter. CCL is expected to report its earnings in late March.
Valero Energy Corporation VLO )
Refiners like Valero Energy saw great earnings results last year. This is because lower fuel prices spurred more demand at a consumer level.
Valero is a Zacks Rank #2 (Buy). With a $32 billion market cap, Valero is one of the largest refiners in the nation. The company has an "A" in each of our Style Score categories (Growth, Value, and Momentum).
Valero's profit margin of 5% is significantly higher than the industry average of 3.85%. Its forward PE of 8.82 is much lower than the industry's 12.8. This is a promising sign going forward.
Over the past 90 days, quarterly EPS estimates have been moving up. Three months ago, our EPS consensus estimated earnings of $1.26 per share this quarter. Now, our EPS estimate for the quarter stands at $1.46. VLO has topped our estimates in each of the last four quarters. The refiner is expected to report its earnings later this week.
Bottom Line
Don't put all your eggs in one basket. Placing bets on the price of oil staying low comes with some risk, so you want to diversify this bet by investing in oil consuming companies from different industries. This is a way to hedge your bet on the commodity so that even if the price of oil rises, you can be supported by each of the different industries' individual strengths.
The Zacks Rank is a truly marvelous trading tool. Our ranking system has beaten the S&P 500, yielding an average return of 25% per year for the last 29 years! 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 >>
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
CARNIVAL CORP (CCL): Free Stock Analysis Report
VALERO ENERGY (VLO): Free Stock Analysis Report
BP PLC (BP): Free Stock Analysis Report
AMER AIRLINES (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.
|
American Airlines AAL American Airlines operates an average of 6700 flights per day to over 339 destinations in 54 countries. There is considerable value in AAL. Quarterly estimates have been trending upwards, which is a good sign for AAL going into the next earnings season.
|
Click to get this free report CARNIVAL CORP (CCL): Free Stock Analysis Report VALERO ENERGY (VLO): Free Stock Analysis Report BP PLC (BP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines AAL American Airlines operates an average of 6700 flights per day to over 339 destinations in 54 countries. There is considerable value in AAL.
|
Click to get this free report CARNIVAL CORP (CCL): Free Stock Analysis Report VALERO ENERGY (VLO): Free Stock Analysis Report BP PLC (BP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines AAL American Airlines operates an average of 6700 flights per day to over 339 destinations in 54 countries. There is considerable value in AAL.
|
American Airlines AAL American Airlines operates an average of 6700 flights per day to over 339 destinations in 54 countries. There is considerable value in AAL. Quarterly estimates have been trending upwards, which is a good sign for AAL going into the next earnings season.
|
8096.0
|
2016-01-26 00:00:00 UTC
|
Will Allegiant Travel Company (ALGT) Surprise Q4 Earnings?
|
AAL
|
https://www.nasdaq.com/articles/will-allegiant-travel-company-algt-surprise-q4-earnings-2016-01-26
|
nan
|
nan
|
Allegiant Travel CompanyALGT is set to release fourth-quarter 2015 results, after the market closes on Jan 27.
In the last quarter, the company posted a positive 1.16% earnings surprise. Let's see how things are shaping up for this announcement.
Factors at Play this Quarter
Allegiant Travel continues to gain from the recent increase in travel demand. Moreover, low ticket prices coupled with fleet expansion strategies are likely to boost the top and bottom line of the company. In addition, declining fuel prices and continuous route expansion are expected to contribute to the carrier's profits.
Allegiant Travel reported strong air traffic growth in the fourth quarter of 2015 as compared to the year-earlier quarter. Further, both passenger count and revenue passenger miles improved 20.8% and 20.1%, respectively.
However, load factor for the period fell 360 basis points from the last-year quarter. Moreover, stiff competition from other legacy carriers coupled with promotional air fares may impact the unit revenue growth in the reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Allegiant Travel is likely to beat the Zacks Consensus Estimate 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 at least 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: The Most Accurate estimate and the Zacks Consensus Estimate are poised at $3.17. Hence, the ESP is 0.00%.
Zacks Rank: Allegiant Travel carries a Zacks Rank #3 (Hold). While this increases the predictive power, we also need to have a positive ESP to be confident of an earnings beat.
Meanwhile, we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.
American Airlines Group AAL has an earnings ESP of +1.53% and a Zacks Rank #2.
Sprint Corporation S has an earnings ESP of +11.11% and a Zacks Rank #3.
InterDigital, Inc. IDCC has an earnings ESP of +33.33% and a Zacks Rank #2.
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 >>
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 TRAVL (ALGT): Free Stock Analysis Report
INTERDIGITL INC (IDCC): Free Stock Analysis Report
SPRINT CORP (S): Free Stock Analysis Report
AMER AIRLINES (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.
|
American Airlines Group AAL has an earnings ESP of +1.53% and a Zacks Rank #2. Click to get this free report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report INTERDIGITL INC (IDCC): Free Stock Analysis Report SPRINT CORP (S): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Moreover, low ticket prices coupled with fleet expansion strategies are likely to boost the top and bottom line of the company.
|
Click to get this free report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report INTERDIGITL INC (IDCC): Free Stock Analysis Report SPRINT CORP (S): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group AAL has an earnings ESP of +1.53% and a Zacks Rank #2. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen.
|
Click to get this free report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report INTERDIGITL INC (IDCC): Free Stock Analysis Report SPRINT CORP (S): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group AAL has an earnings ESP of +1.53% and a Zacks Rank #2. Zacks Rank: Allegiant Travel carries a Zacks Rank #3 (Hold).
|
American Airlines Group AAL has an earnings ESP of +1.53% and a Zacks Rank #2. Click to get this free report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report INTERDIGITL INC (IDCC): Free Stock Analysis Report SPRINT CORP (S): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Factors at Play this Quarter Allegiant Travel continues to gain from the recent increase in travel demand.
|
8097.0
|
2016-01-26 00:00:00 UTC
|
Is the Crowd Right About American Airlines Group (AAL) Stock?
|
AAL
|
https://www.nasdaq.com/articles/is-the-crowd-right-about-american-airlines-group-aal-stock-2016-01-26
|
nan
|
nan
|
If you are looking for a stock in the Transportation-Airline industry, American Airlines Group IncAAL could be one to watch closely. Right now the company has a Zacks Rank #2 (Buy) and it has been seeing rising earnings estimate revisions as of late.
In fact, the full year consensus estimate has risen from $9.02/share to $9.08/share in the past 30 days, while seven estimates have gone higher for the time frame and zero have gone lower. If that wasn't enough, AAL also has Style Score grade of 'A' on value front and 'B' on growth front so it could be worth considering from that perspective too.
But what is the Crowd saying about this stock?
Many times, broad investor perception of a security can have a large bearing on a stock's outlook. And thanks to social media sites like Twitter, we now have an easy way to see what the masses are thinking about stocks and how they might perform in the future.
According to MarketProphit.com , a financial Big Data social media analytics company, the moving average of the Crowd Sentiment Z-Score for AAL is 0.28, which shows social media momentum trending upward for this stock.
Generally speaking, moving averages of Crowd Sentiment Z-Scores with values above 0.2 is significant, so the rating for AAL today is indicative of broad positive Crowd opinion towards this stock in the near term. And when you add in the positive earnings estimate revisions to this story it definitely suggests that American Airlines Group is a stock to put on your radar right now.
And for more data and insights on trending sentiment and buzz in social media for stocks you care about, make sure to check out marketprophit.com and their Z-Score system .
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
AMER AIRLINES (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.
|
If you are looking for a stock in the Transportation-Airline industry, American Airlines Group IncAAL could be one to watch closely. If that wasn't enough, AAL also has Style Score grade of 'A' on value front and 'B' on growth front so it could be worth considering from that perspective too. According to MarketProphit.com , a financial Big Data social media analytics company, the moving average of the Crowd Sentiment Z-Score for AAL is 0.28, which shows social media momentum trending upward for this stock.
|
According to MarketProphit.com , a financial Big Data social media analytics company, the moving average of the Crowd Sentiment Z-Score for AAL is 0.28, which shows social media momentum trending upward for this stock. Generally speaking, moving averages of Crowd Sentiment Z-Scores with values above 0.2 is significant, so the rating for AAL today is indicative of broad positive Crowd opinion towards this stock in the near term. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
According to MarketProphit.com , a financial Big Data social media analytics company, the moving average of the Crowd Sentiment Z-Score for AAL is 0.28, which shows social media momentum trending upward for this stock. Generally speaking, moving averages of Crowd Sentiment Z-Scores with values above 0.2 is significant, so the rating for AAL today is indicative of broad positive Crowd opinion towards this stock in the near term. If you are looking for a stock in the Transportation-Airline industry, American Airlines Group IncAAL could be one to watch closely.
|
According to MarketProphit.com , a financial Big Data social media analytics company, the moving average of the Crowd Sentiment Z-Score for AAL is 0.28, which shows social media momentum trending upward for this stock. If you are looking for a stock in the Transportation-Airline industry, American Airlines Group IncAAL could be one to watch closely. If that wasn't enough, AAL also has Style Score grade of 'A' on value front and 'B' on growth front so it could be worth considering from that perspective too.
|
8098.0
|
2016-01-25 00:00:00 UTC
|
Will Norfolk Southern (NSC) Q4 Earnings Disappoint?
|
AAL
|
https://www.nasdaq.com/articles/will-norfolk-southern-nsc-q4-earnings-disappoint-2016-01-25
|
nan
|
nan
|
Norfolk Southern Corp. NSC is set to release fourth-quarter 2015 financial results before the market opens on Jan 27.
In the last quarter, the company posted a positive 11.35% earnings surprise. Let's see how things are shaping up for this announcement.
Factors at Play
Norfolk Southern continues to face the brunt of declining domestic coal shipments. As coal forms the leading revenue generating unit for the carrier, adverse foreign currency movements owing to a strong dollar and soft coal prices will certainly impact the top line of CSX Corp. in the fourth quarter.
Further, the tightening of railroad regulations and intensifying competitive pressure are significant headwinds. We also note that low oil prices coupled with reduced electricity generation from coal will continue to affect the company's business.
Earnings Whispers
Our proven model does not conclusively show that Norfolk Southern is likely to beat the Zacks Consensus Estimate 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 at least #3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: The Earnings ESP for the company currently stands at -1.58% as the Most Accurate estimate is pegged at $1.25 while the Zacks Consensus Estimate is higher at $1.27.
Zacks Rank: Norfolk Southern carries a Zacks Rank #4 (Sell).
Please note that Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
Stocks to Consider
Here are some companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.
American Airlines Group AAL has an earnings ESP of +1.53% and a Zacks Rank #2.
Sprint Corporation S has an earnings ESP of +11.11% and a Zacks Rank #3.
InterDigital, Inc. IDCC has an earnings ESP of +33.33% and a Zacks Rank #2.
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 >>
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
NORFOLK SOUTHRN (NSC): Free Stock Analysis Report
INTERDIGITL INC (IDCC): Free Stock Analysis Report
SPRINT CORP (S): Free Stock Analysis Report
AMER AIRLINES (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.
|
American Airlines Group AAL has an earnings ESP of +1.53% and a Zacks Rank #2. Click to get this free report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report INTERDIGITL INC (IDCC): Free Stock Analysis Report SPRINT CORP (S): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Factors at Play Norfolk Southern continues to face the brunt of declining domestic coal shipments.
|
Click to get this free report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report INTERDIGITL INC (IDCC): Free Stock Analysis Report SPRINT CORP (S): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group AAL has an earnings ESP of +1.53% and a Zacks Rank #2. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or at least #3 (Hold) for this to happen.
|
Click to get this free report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report INTERDIGITL INC (IDCC): Free Stock Analysis Report SPRINT CORP (S): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group AAL has an earnings ESP of +1.53% and a Zacks Rank #2. Zacks ESP: The Earnings ESP for the company currently stands at -1.58% as the Most Accurate estimate is pegged at $1.25 while the Zacks Consensus Estimate is higher at $1.27.
|
American Airlines Group AAL has an earnings ESP of +1.53% and a Zacks Rank #2. Click to get this free report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report INTERDIGITL INC (IDCC): Free Stock Analysis Report SPRINT CORP (S): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. We also note that low oil prices coupled with reduced electricity generation from coal will continue to affect the company's business.
|
8099.0
|
2016-01-25 00:00:00 UTC
|
What Awaits Skyworks Solutions (SWKS) in Q1 Earnings?
|
AAL
|
https://www.nasdaq.com/articles/what-awaits-skyworks-solutions-swks-q1-earnings-2016-01-25
|
nan
|
nan
|
Semiconductor manufacturer Skyworks Solutions Inc.SWKS is scheduled to report first-quarter fiscal 2016 results after the closing bell on Jan 28. In the last reported quarter, earnings were in sync with the Zacks Consensus Estimate. Let's see how things are shaping up for this announcement.
Factors to Consider
During first-quarter fiscal 2016, Skyworks terminated the merger agreement with rival PMC-Sierra Inc., citing irreconcilable differences arising from a raised takeover bid by Microsemi Corporation. With the termination of the proposed deal, Skyworks was entitled to receive a fee of $88.5 million from PMC-Sierra.
However, as the deal fell flat, negative investor sentiment crept in and most of the earnings estimates for the company were revised downward. The acquisition could have expanded Skyworks' product portfolio to better serve some of the fastest growing segments in the technology market, including cloud storage and optical networking. In addition to incremental revenues, the acquisition was likely to reap synergistic benefits to the tune of $75 million and could have resulted in accretive non-GAAP earnings of 75 cents per share on an annual basis for Skyworks.
In order to fend off competition, Skyworks has to continually introduce innovative products and remain updated on technological advancements. Heavy investments in R&D are escalating operating expenses and contracting margins. As other players in the market gear up to capitalize on the increasing demand for smartphones, pricing pressure is expected to intensify further.
The semiconductor industry is also witnessing a massive consolidation with several mergers and acquisitions across the board. As such, it would be prudent for investors to wait for some more time until the uncertainty is lifted. Significant concentration risk and macroeconomic uncertainty are the other headwinds for the company.
However, Skyworks is striving to mitigate operating risks through diversification of business verticals. The company is aggressively expanding into new vertical markets. It is investing heavily in traditional analog segments like automotive, medical and industrial. These are highly attractive markets with longer product life cycles, fewer competitors and higher margins. Skyworks participates in these markets by leveraging core analog and mixed-signal design capabilities and a broad-based product catalog. All these factors bode well for the long-term growth of the company.
Earnings Whispers
Our proven model does not conclusively show that Skyworks is likely to beat earnings this quarter as it lacks the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) and #3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and Zacks Consensus Estimate, is currently pegged at -1.37%.
Zacks Rank: Skyworks' Zacks Rank #5 (Strong Sell) when combined with a negative ESP makes an earnings beat unlikely this quarter. Note that stocks with a Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
American Airlines Group Inc. AAL , earnings ESP of +1.53% and a Zacks Rank #2.
Ethan Allen Interiors Inc. ETH , earnings ESP of +9.30% and a Zacks Rank #1.
Valero Energy Corp. VLO , earnings ESP of +1.37% and a Zacks Rank #2.
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 >>
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
SKYWORKS SOLUTN (SWKS): Free Stock Analysis Report
VALERO ENERGY (VLO): Free Stock Analysis Report
ETHAN ALLEN INT (ETH): Free Stock Analysis Report
AMER AIRLINES (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.
|
Stocks to Consider Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL , earnings ESP of +1.53% and a Zacks Rank #2. Click to get this free report SKYWORKS SOLUTN (SWKS): Free Stock Analysis Report VALERO ENERGY (VLO): Free Stock Analysis Report ETHAN ALLEN INT (ETH): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Factors to Consider During first-quarter fiscal 2016, Skyworks terminated the merger agreement with rival PMC-Sierra Inc., citing irreconcilable differences arising from a raised takeover bid by Microsemi Corporation.
|
Click to get this free report SKYWORKS SOLUTN (SWKS): Free Stock Analysis Report VALERO ENERGY (VLO): Free Stock Analysis Report ETHAN ALLEN INT (ETH): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks to Consider Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL , earnings ESP of +1.53% and a Zacks Rank #2. Zacks Rank: Skyworks' Zacks Rank #5 (Strong Sell) when combined with a negative ESP makes an earnings beat unlikely this quarter.
|
Stocks to Consider Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL , earnings ESP of +1.53% and a Zacks Rank #2. Click to get this free report SKYWORKS SOLUTN (SWKS): Free Stock Analysis Report VALERO ENERGY (VLO): Free Stock Analysis Report ETHAN ALLEN INT (ETH): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Rank: Skyworks' Zacks Rank #5 (Strong Sell) when combined with a negative ESP makes an earnings beat unlikely this quarter.
|
Stocks to Consider Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL , earnings ESP of +1.53% and a Zacks Rank #2. Click to get this free report SKYWORKS SOLUTN (SWKS): Free Stock Analysis Report VALERO ENERGY (VLO): Free Stock Analysis Report ETHAN ALLEN INT (ETH): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Factors to Consider During first-quarter fiscal 2016, Skyworks terminated the merger agreement with rival PMC-Sierra Inc., citing irreconcilable differences arising from a raised takeover bid by Microsemi Corporation.
|
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.