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
|
|---|---|---|---|---|---|---|---|---|---|---|---|
8100.0
|
2016-01-25 00:00:00 UTC
|
Precision Castparts (PCP) Q3 Earnings: Another Miss in Store?
|
AAL
|
https://www.nasdaq.com/articles/precision-castparts-pcp-q3-earnings%3A-another-miss-in-store-2016-01-25
|
nan
|
nan
|
Precision Castparts Corp.PCP is expected to report third-quarter fiscal 2016 results on Jan 28, 2016.
Last quarter, the company posted a negative surprise of 15.3%. It has missed estimates in three out of the trailing four quarters, delivering an average negative surprise of 5.5%.
Let's see how things are shaping up for this announcement.
Key Factors Influencing Q3 Results
Precision Castparts boasts a strong, diversified business line that helps it to counteract the operating risks associated with a single business.
The company is witnessing robust demand for its industrial gas turbines and futuristic aircraft engines, which translates into bright prospects and enhanced top-line growth for the company's Investment Cast Products segment. Also, the company's Forged Products segment has been undertaking cost-restructuring initiatives to help combat the challenging scenario in the oil & gas market and stabilize the unit's earnings.
Moreover, Precision Castparts' target aerospace markets and solid growth prospects in the commercial aerospace market are likely to act as vital growth drivers in the quarter under review.
Furthermore, Precision Castparts' recent successful acquisitions of Composite Horizons and Aramco will strengthen the performance of the company in the carbon & ceramic matrix as well as aeroengine components. This is likely to have a direct positive impact on the company's revenues.
However, despite these positives, volatility in the oil & gas market has been one of the biggest concerns for the company, which has affected its financial performance over the past few quarters and is likely to hurt third-quarter results as well. Moreover, rising fuel costs and currency volatility are other concerns before the company, which may become significant headwinds in the soon-to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Precision Castparts will beat earnings estimates in this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But that is not the case here as you will see below.
Zacks ESP: The Earnings ESP for the stock is -13.25%. This is because the Most Accurate estimate stands at $2.62, while the Zacks Consensus Estimate is pegged higher at $3.02.
Zacks Rank: Precision Castparts' Zacks Rank #3 (Hold), when combined with a negative ESP, makes a surprise prediction difficult.
Note that we caution against stocks with Zacks Rank #4 or #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.
InterDigital, Inc. IDCC has an Earnings ESP of +33.33% and holds a Zacks Rank #2. It is scheduled to report results on Feb 18.
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
INTERDIGITL INC (IDCC): Free Stock Analysis Report
PRECISION CASTP (PCP): 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 INTERDIGITL INC (IDCC): Free Stock Analysis Report PRECISION CASTP (PCP): 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. Also, the company's Forged Products segment has been undertaking cost-restructuring initiatives to help combat the challenging scenario in the oil & gas market and stabilize the unit's earnings.
|
Click to get this free report INTERDIGITL INC (IDCC): Free Stock Analysis Report PRECISION CASTP (PCP): 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 INTERDIGITL INC (IDCC): Free Stock Analysis Report PRECISION CASTP (PCP): 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. Note that we caution against stocks with Zacks Rank #4 or #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. Click to get this free report INTERDIGITL INC (IDCC): Free Stock Analysis Report PRECISION CASTP (PCP): 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. However, despite these positives, volatility in the oil & gas market has been one of the biggest concerns for the company, which has affected its financial performance over the past few quarters and is likely to hurt third-quarter results as well.
|
8101.0
|
2016-01-24 00:00:00 UTC
|
Brighter Skies at Spirit Airlines
|
AAL
|
https://www.nasdaq.com/articles/brighter-skies-spirit-airlines-2016-01-24
|
nan
|
nan
|
Spirit Airlines investors came into 2015 with high hopes as fuel prices plummeted and the carrier prepared to ramp up its growth rate. Spirit Airlines stock rose above $80 as its profit outlook for 2015 soared.
Indeed, in early February, Spirit projected that its full-year operating margin would be between 24% and 29.0%, up from the record 19.2% operating margin it produced in 2014. Unfortunately, management had to cut its margin guidance twice in the next six months. This helped drive the stock down by 60% from its highs.
Spirit Airlines Stock Performance, 2014-present. Data by YCharts .
However, while 2015 wasn't quite as good a year as Spirit's management originally expected, it also wasn't as bad as management (or investors) have feared in recent months. The company's recent guidance update made that crystal clear -- sending Spirit Airlines stock up 11% on Wednesday and up another 6% on Thursday.
Guidance comes down
Spirit Airlines' original margin guidance for 2015 assumed that domestic airfares would remain fairly stable despite the steep drop in oil prices . Instead, various airlines used their fuel cost savings to lower prices on routes where they compete with Spirit.
American Airlines Group was most aggressive in this regard. More than half of the carrier's revenue comes from customers who fly American just once a year. Thus, American Airlines decided that it needs to compete on price -- even with budget carriers like Spirit -- to avoid losing customers.
American Airlines has started aggressively matching Spirit's prices. Image source: American Airlines.
This policy may have contributed to American Airlines' mid- to high-single-digit unit revenue declines in recent quarters. But the impact was even greater for Spirit Airlines. In Q3, its total unit revenue fell by a stunning 17.5% year over year.
As this situation developed, Spirit Airlines cut its full-year operating margin guidance range: first to 24% to 27% in April, then to 21.5% to 23.0% in July.
Guidance goes back up
However, since July, Spirit has been able to not just maintain but actually improve its 2015 margin guidance. In July, Spirit forecast that it would produce a 22% to 25% operating margin in Q3. Spirit's adjusted operating margin for the quarter ultimately reached 27.4%, despite the sharp unit revenue decline noted earlier.
As of October, the company still expected a 21.5% to 23% full-year operating margin. As it turns out, this forecast was too conservative. In Spirit's investor update released last week, it raised its Q4 operating margin guidance by 5 percentage points: from 17.5% to 22.5%. Both fuel and non-fuel costs were lower than expected, while revenue came in higher than expected.
Both revenue and costs came in better than expected for Spirit in Q4. Image source: Spirit Airlines.
This updated guidance implies that Spirit's 2015 operating margin was 23.6%. That's better than the updated guidance introduced six months ago, and it isn't far below Spirit's original guidance range for a 24%-29% full-year operating margin.
Plenty of upside left
Looking back at 2015, it's pretty clear that investors overreacted to Spirit Airlines' guidance revisions. The company reached new record highs for revenue, earnings, and operating margin in 2015. And despite facing significant pricing pressure from American Airlines and other rivals, Spirit's operating margin didn't fall very far below management's original bullish guidance.
For 2016, Spirit Airlines plans to boost capacity by 20%, which could lead to another year of double-digit revenue growth. Meanwhile, with jet fuel prices falling to levels not seen in more than a decade, Spirit's profit margin could reach another record this year.
Longer-term, Spirit Airlines' industry-leading cost structure and large market opportunity should allow it to produce many more years of double-digit profit growth. With the stock still trading for just over 10 times Spirit's 2015 earnings per share, long-term investors should stay the course.
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 Brighter Skies at Spirit Airlines 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.
|
The company's recent guidance update made that crystal clear -- sending Spirit Airlines stock up 11% on Wednesday and up another 6% on Thursday. And despite facing significant pricing pressure from American Airlines and other rivals, Spirit's operating margin didn't fall very far below management's original bullish guidance. Longer-term, Spirit Airlines' industry-leading cost structure and large market opportunity should allow it to produce many more years of double-digit profit growth.
|
As this situation developed, Spirit Airlines cut its full-year operating margin guidance range: first to 24% to 27% in April, then to 21.5% to 23.0% in July. 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.
|
As this situation developed, Spirit Airlines cut its full-year operating margin guidance range: first to 24% to 27% in April, then to 21.5% to 23.0% in July. And despite facing significant pricing pressure from American Airlines and other rivals, Spirit's operating margin didn't fall very far below management's original bullish guidance. 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.
|
In July, Spirit forecast that it would produce a 22% to 25% operating margin in Q3. The company reached new record highs for revenue, earnings, and operating margin in 2015. The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
8102.0
|
2016-01-24 00:00:00 UTC
|
Will Canadian National Railway (CNI) Q4 Earnings Let Down?
|
AAL
|
https://www.nasdaq.com/articles/will-canadian-national-railway-cni-q4-earnings-let-down-2016-01-24
|
nan
|
nan
|
Canadian National Railway CompanyCNI is slated to release its fourth quarter and full-year 2015 financial numbers on Jan 26, 2016, after market closes.
Last quarter, Canadian National Railway recorded a positive earnings surprise of 7.95%. Even though the company's earnings have surpassed the Zacks Consensus Estimate in each of the prior four quarters, with an average beat of 7.19%, things are not all that bright going into the fourth-quarter earnings announcement
Our quantitative model too doesn't hint at an earnings beat in the upcoming fourth quarter.
Here is what our model indicates:
The possibility of Canadian National Railway beating the Zacks Consensus Estimate in the fourth quarter is rather low. This is because it lacks the right combination of the two key ingredients - a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) - that reflects the possibility of a positive earnings surprise.
Zacks ESP : Earnings ESP for Canadian National Railway is -2.47%. This is because the Most Accurate estimate is 79 cents while the Zacks Consensus Estimate is pegged higher at 81 cents.
Zacks Rank : Canadian National Railway has a Zacks Rank #4 (Sell).
Note that stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions as is the case with Canadian National Railway. Fourth-quarter earnings per share estimate for the company has gone down by 5 cents to 81 cents over the last 90 days.
Factors at Play
Headwinds related to coal are expected to mar Canadian National Railway's fourth quarter results. We believe that the decline in coal shipments will mitigate the positive impact of other products lines like Automotive, thus adversely impacting the company's revenues. Soft oil prices will also impact freight volumes in the final quarter of 2015.
A recent Reuters report stated that Canadian National Railway, along with Canadian Pacific Railway CP , have been fined by the government of Canada for generating excessive revenues from hauling western grain in 2014-15. We expect an update on the issue at the fourth quarter conference call. We also await an update on the company's share buyback/ dividend payment activity on the conference call.
Upcoming Railroad Release
Apart from Canadian National Railway, Norfolk Southern Corp. NSC - another key player in the railroad space - is slated to unveil its fourth quarter results soon, on Jan 27. We believe results of Norfolk Southern will also tend to be impacted by coal-related headwinds.
A Transportation Gem
With railroads struggling big time, we believe investors interested in the broader transportation space should look elsewhere for companies likely to beat the Zacks Consensus Estimate in the fourth quarter. One such company is American Airlines Group AAL which sports an earnings ESP of +1.53% and a Zacks Rank #1. The carrier is slated to release its fourth quarter results on Jan 29, before market opens.
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
CDN NATL RY CO (CNI): Free Stock Analysis Report
NORFOLK SOUTHRN (NSC): Free Stock Analysis Report
CDN PAC RLWY (CP): 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.
|
One such company is American Airlines Group AAL which sports an earnings ESP of +1.53% and a Zacks Rank #1. Click to get this free report CDN NATL RY CO (CNI): Free Stock Analysis Report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Canadian National Railway CompanyCNI is slated to release its fourth quarter and full-year 2015 financial numbers on Jan 26, 2016, after market closes.
|
Click to get this free report CDN NATL RY CO (CNI): Free Stock Analysis Report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. One such company is American Airlines Group AAL which sports an earnings ESP of +1.53% and a Zacks Rank #1. Here is what our model indicates: The possibility of Canadian National Railway beating the Zacks Consensus Estimate in the fourth quarter is rather low.
|
Click to get this free report CDN NATL RY CO (CNI): Free Stock Analysis Report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. One such company is American Airlines Group AAL which sports an earnings ESP of +1.53% and a Zacks Rank #1. Even though the company's earnings have surpassed the Zacks Consensus Estimate in each of the prior four quarters, with an average beat of 7.19%, things are not all that bright going into the fourth-quarter earnings announcement Our quantitative model too doesn't hint at an earnings beat in the upcoming fourth quarter.
|
One such company is American Airlines Group AAL which sports an earnings ESP of +1.53% and a Zacks Rank #1. Click to get this free report CDN NATL RY CO (CNI): Free Stock Analysis Report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Last quarter, Canadian National Railway recorded a positive earnings surprise of 7.95%.
|
8103.0
|
2016-01-23 00:00:00 UTC
|
Better Buy: Delta Air Lines, Inc. or American Airlines Group Inc.?
|
AAL
|
https://www.nasdaq.com/articles/better-buy-delta-air-lines-inc-or-american-airlines-group-inc-2016-01-23
|
nan
|
nan
|
Image: Delta Air Lines.
Over the past several years, the airline industry has had its best performance in decades, and Delta Air Lines and American Airlines Group have both played monumental roles in driving the industry forward. Yet both stocks have seen declines over the past year, and investors want to know which airline stock is the better choice for their portfolios. Let's compare Delta Air Lines and American Airlines Group on several key metrics to see which looks more attractive currently.
Valuation
Both Delta and American have seen their shares lose altitude over the past year, but Delta has done a better job of keeping its declines in check. Delta shares have fallen 6% since early 2015, compared to a much more dramatic 27% drop for American over the same time period.
From a typical earnings-based valuation perspective, both American and Delta look dirt cheap. Looking at its income over the past 12 months, Delta stock trades at just eight times its trailing earnings. American is even cheaper, with its stock fetching a trailing earnings multiple of less than six.
Much of the disparity between the two stocks goes away when you look at forward estimates. American has already gotten the lion's share of benefits from falling fuel costs, and so its forward earnings multiple isn't much different from its trailing valuation. Delta, on the other hand, expects further earnings gains due to fuel cost reductions. Delta's forward earnings multiple is just over six.
Based on valuation, American arguably has a slight edge over Delta. The difference, though, is relatively small.
Dividends
Airlines have never been strong dividend payers, but both American and Delta reward their shareholders to some extent. Delta's current dividend yield is about 1.2%, and that just edges out American and its 1% yield.
Neither company has an extremely long history of paying dividends. American just emerged from bankruptcy just over two years ago, and it hasn't made any changes to the $0.10 per share quarterly dividend it started paying in mid-2014. By contrast, Delta has shown a willingness to grow its dividend payout over time, making two dividend increases over the past two years and more than doubling its payout since starting it in 2013.
By the dividend standard, Delta has an edge over American. If American thinks about a dividend increase in the near future, though, that could change quickly.
Growth
The airline industry has never seen stronger earnings growth, and both Delta and American have worked hard to take full advantage. In Delta's most recent earnings report from earlier this week, the airline reported a 50% jump in adjusted earnings per share, even though it included some charges related to closing out fuel hedges. A $700 million drop in fuel expenses year-over-year helped offset downward pressure from slight declines on the revenue side. Passenger unit revenue fell 1.6%, but many expected a larger drop. Moves to cut capacity in overserved markets helped limit declines, especially in key areas like the Pacific.
American wont reportits fourth-quarter results until next week, but its most recent performance included its eighth straight quarter of record profits. A 3.9% drop in revenue didn't keep the company from posting a 55% increase in its adjusted pre-tax income that sent American's earnings per share up by two-thirds from year-earlier levels. The integration of US Airways has gone relatively well. The one disadvantage going forward is that future fuel-cost savings will rely on further drops in energy prices, because unlike Delta, American got most of its benefit from lower fuel expenses quickly because of its unhedged position.
In terms of future growth, both companies are poised to capitalize on key opportunities in their respective markets. In the near-term, Delta might grow slightly more, but American fully expects to catch up and surpass its rival in the long run.
Airlines have seen huge growth over the past several years, but changing conditions pose a threat to their upside potential. Based on these factors, American Airlines Group looks like a slightly better buy based on valuation, but Delta Air Lines also has plenty of ability to climb in the years ahead as well.
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. or American Airlines Group Inc.? 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.
|
American has already gotten the lion's share of benefits from falling fuel costs, and so its forward earnings multiple isn't much different from its trailing valuation. A 3.9% drop in revenue didn't keep the company from posting a 55% increase in its adjusted pre-tax income that sent American's earnings per share up by two-thirds from year-earlier levels. The one disadvantage going forward is that future fuel-cost savings will rely on further drops in energy prices, because unlike Delta, American got most of its benefit from lower fuel expenses quickly because of its unhedged position.
|
Let's compare Delta Air Lines and American Airlines Group on several key metrics to see which looks more attractive currently. Based on these factors, American Airlines Group looks like a slightly better buy based on valuation, but Delta Air Lines also has plenty of ability to climb in the years ahead as well. The article Better Buy: Delta Air Lines, Inc. or American Airlines Group Inc.?
|
Over the past several years, the airline industry has had its best performance in decades, and Delta Air Lines and American Airlines Group have both played monumental roles in driving the industry forward. Valuation Both Delta and American have seen their shares lose altitude over the past year, but Delta has done a better job of keeping its declines in check. Based on these factors, American Airlines Group looks like a slightly better buy based on valuation, but Delta Air Lines also has plenty of ability to climb in the years ahead as well.
|
Yet both stocks have seen declines over the past year, and investors want to know which airline stock is the better choice for their portfolios. A 3.9% drop in revenue didn't keep the company from posting a 55% increase in its adjusted pre-tax income that sent American's earnings per share up by two-thirds from year-earlier levels. The Motley Fool has the following options: long January 2017 $35 calls on American Airlines Group.
|
8104.0
|
2016-01-23 00:00:00 UTC
|
Will American Airlines Raise Its Dividend in 2016?
|
AAL
|
https://www.nasdaq.com/articles/will-american-airlines-raise-its-dividend-2016-2016-01-23
|
nan
|
nan
|
Image source: American Airlines.
It's hard to believe how much has happened with American Airlines Group over the past few years. In 2011, former parent company AMR filed for bankruptcy protection along with its operating subsidiaries, seeking to maintain its business operations while restructuring its cost and debt structure in order to assure its long-term viability. In late 2013, American emerged from bankruptcy and merged with US Airways to create the airline with the largest fleet of aircraft in the world. Thanks to the unprecedented strength of the airline industry, American prospered and started paying a modest dividend in mid-2014, joining Delta Air Lines and Southwest Airlines among the ranks of dividend payers in the business. Yet some wonder if American should pay even more. Let's look more closely at American Airlines to see whether a dividend hike is in the cards for 2016.
Dividend stats on American Airlines Group
Data source: Yahoo! Finance. Last increase refers to ex-dividend date.
Quickly joining the dividend-paying ranks
American Airlines is an unlikely dividend stock, if only because its bankruptcy is the most recent among major airlines. You'd think that the company might have delayed initiating a dividend until putting together more than a few months of a track record after its merger, especially because US Airways didn't pay a dividend, either. Indeed, rival Delta Air Lines didn't pay a dividend until mid-2013, and within the industry, Southwest is the biggest player to have a consistent long-term history of dividend payments to shareholders.
Nevertheless, American didn't hesitate to make its move, and the $0.10 per share quarterly dividend came as part of a huge capital deployment program. The airline paid down more than $2.8 billion in debt and aircraft lease obligations, created a $1 billion share repurchase program, and contributed $600 million in additional pension contributions. American noted that it was the first time the airline had paid a cash dividend since 1980, reminding investors of just how tough the past few decades have been for the industry overall.
Since then, the situation for American has become even more favorable. Unlike Delta and Southwest, American chose not to hedge its fuel costs, and that has resulted in the airline getting the full benefit of the plunge in energy prices that the market has seen over the past year and a half. That in turn will give the company some flexibility in structuring its dividends for the future.
Still, shareholders shouldn't get too excited about the prospects for a higher payout. American still has substantial amounts of debt outstanding, and continuing to pay those obligations down would put the airline in a much better position to weather the next cyclical downturn in the industry whenever it comes. In addition, American is working to upgrade its fleet in order to make it more efficient, reducing operating and maintenance costs, and the company hopes to use some of its fuel-cost savings toward accelerating its fleet improvements.
Will American's dividends gain altitude?
Even by industry standards, American's dividend is about as stingy as it gets. The company pays only about 6% of its earnings out to investors in the form of dividends, and even if the climb in earnings from lower fuel costs turns out to be temporary, American is still in a prime position to increase its dividend payments if it chooses. With a yield that already exceeds what Delta and Southwest pay, there's little pressure for American to do so.
American hasn't found it necessary to increase its dividend since it started paying shareholders nearly two years ago, and it's likely that the airline will keep using share buybacks and other strategies to use its capital. Nevertheless, dividend investors can be more comfortable with American Airlines' prospects than they've been in decades, as the airline takes full advantage of the favorable environment to maximize its profits.
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 Will American Airlines Raise Its Dividend in 2016? 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.
|
Unlike Delta and Southwest, American chose not to hedge its fuel costs, and that has resulted in the airline getting the full benefit of the plunge in energy prices that the market has seen over the past year and a half. American still has substantial amounts of debt outstanding, and continuing to pay those obligations down would put the airline in a much better position to weather the next cyclical downturn in the industry whenever it comes. American hasn't found it necessary to increase its dividend since it started paying shareholders nearly two years ago, and it's likely that the airline will keep using share buybacks and other strategies to use its capital.
|
Thanks to the unprecedented strength of the airline industry, American prospered and started paying a modest dividend in mid-2014, joining Delta Air Lines and Southwest Airlines among the ranks of dividend payers in the business. Indeed, rival Delta Air Lines didn't pay a dividend until mid-2013, and within the industry, Southwest is the biggest player to have a consistent long-term history of dividend payments to shareholders. The airline paid down more than $2.8 billion in debt and aircraft lease obligations, created a $1 billion share repurchase program, and contributed $600 million in additional pension contributions.
|
Thanks to the unprecedented strength of the airline industry, American prospered and started paying a modest dividend in mid-2014, joining Delta Air Lines and Southwest Airlines among the ranks of dividend payers in the business. Let's look more closely at American Airlines to see whether a dividend hike is in the cards for 2016. Dividend stats on American Airlines Group Data source: Yahoo! The company pays only about 6% of its earnings out to investors in the form of dividends, and even if the climb in earnings from lower fuel costs turns out to be temporary, American is still in a prime position to increase its dividend payments if it chooses.
|
Let's look more closely at American Airlines to see whether a dividend hike is in the cards for 2016. Dividend stats on American Airlines Group Data source: Yahoo! Indeed, rival Delta Air Lines didn't pay a dividend until mid-2013, and within the industry, Southwest is the biggest player to have a consistent long-term history of dividend payments to shareholders. American hasn't found it necessary to increase its dividend since it started paying shareholders nearly two years ago, and it's likely that the airline will keep using share buybacks and other strategies to use its capital.
|
8105.0
|
2016-01-22 00:00:00 UTC
|
Will United Technologies (UTX) Beat Earnings on Reforms?
|
AAL
|
https://www.nasdaq.com/articles/will-united-technologies-utx-beat-earnings-on-reforms-2016-01-22
|
nan
|
nan
|
Diversified conglomerate United Technologies CorporationUTX is scheduled to report fourth-quarter 2015 results before the opening bell on Jan 27. In the last reported quarter, the company comprehensively beat the Zacks Consensus Estimate by 13 cents. Let's see how things are shaping up for this announcement.
Key Factors in the Fourth Quarter
United Technologies is currently undergoing a string of strategic initiatives to trim its operating costs and restructure its portfolio to focus on the core businesses. These include an overhaul of its organizational structure in the aerospace business along with some key changes in the leadership positions within it. United Technologies anticipates that the streamlined organizational set up would enable it to better serve its customers. The strategic move is also expected to ensure a successful entry and production ramp-up of its Geared Turbofan engines to thwart intense competition from other established market players.
During fourth-quarter 2015, United Technologies closed the divesture of Sikorsky to Lockheed Martin Corporation for $9 billion. The strategic move was aimed to focus on the core business of the company to arrest dwindling revenues. Exiting the helicopter business will help the company to focus on providing high-technology systems and services to the aerospace and building industries and deliver improved and sustained value to its customers. United Technologies expects to record $3.3 billion as after-tax gain from the transaction in fourth-quarter 2015. The company also announced that it had initiated an accelerated share repurchase program to return $6 billion to its shareholders.
In order to improve its margins, United Technologies will further implement a $1.5 billion multi-year restructuring program to reduce costs in high-cost locations, resulting in $900 million of annualized savings through 2018. Restructuring charges in 2015 are currently expected to be approximately $400 million, up from the prior expectation of $300 million. The company also revised its earnings guidance for 2015. United Technologies currently expects adjusted earnings for 2015 to be in the range of $6.20 to $6.30 per share.
Earnings Whispers
The company has a trailing four-quarter average earnings surprise of 9.0% and looks well set to replicate it this quarter as it possesses the key components for an earnings beat. 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 exactly 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 pegged at +1.33%. This indicates a likely earnings beat.
Zacks Rank: United Technologies' Zacks Rank #3 when combined with a positive ESP increases the predictive power of ESP. 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.
The Chubb Corporation CB , earnings ESP of +1.32% and Zacks Rank #1.
MicroStrategy Inc. MSTR , earnings ESP of +3.46% and 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
MICROSTRATEGY (MSTR): Free Stock Analysis Report
UTD TECHS CORP (UTX): Free Stock Analysis Report
CHUBB LTD (CB): 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 MICROSTRATEGY (MSTR): Free Stock Analysis Report UTD TECHS CORP (UTX): Free Stock Analysis Report CHUBB LTD (CB): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Key Factors in the Fourth Quarter United Technologies is currently undergoing a string of strategic initiatives to trim its operating costs and restructure its portfolio to focus on the core businesses.
|
Click to get this free report MICROSTRATEGY (MSTR): Free Stock Analysis Report UTD TECHS CORP (UTX): Free Stock Analysis Report CHUBB LTD (CB): 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: United Technologies' Zacks Rank #3 when combined with a positive ESP increases the predictive power of ESP.
|
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 MICROSTRATEGY (MSTR): Free Stock Analysis Report UTD TECHS CORP (UTX): Free Stock Analysis Report CHUBB LTD (CB): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Rank: United Technologies' Zacks Rank #3 when combined with a positive ESP increases the predictive power of ESP.
|
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 MICROSTRATEGY (MSTR): Free Stock Analysis Report UTD TECHS CORP (UTX): Free Stock Analysis Report CHUBB LTD (CB): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The Chubb Corporation CB , earnings ESP of +1.32% and Zacks Rank #1.
|
8106.0
|
2016-01-22 00:00:00 UTC
|
Will Hawaiian Holdings' (HA) Earnings Surprise in Q4?
|
AAL
|
https://www.nasdaq.com/articles/will-hawaiian-holdings-ha-earnings-surprise-in-q4-2016-01-22
|
nan
|
nan
|
Hawaiian Holdings, Inc.HA , the parent company of Hawaiian Airlines, Inc., is set to release its fourth-quarter 2015 results after the market closes on Jan 26.
Last quarter, the company posted an 8.4% earnings surprise. Meanwhile, in all four quarters last year, the company recorded positive earnings surprises, with an average beat of 6.8%. Let's see how things are shaping up for this announcement.
Factors at Play
Hawaiian Holdings seems to be benefitting from low fuel prices and increased travel demand during the festive season. Moreover, the company continues to expand daily seasonal non-stop flight service to the island.
However, Hawaiian Airlines' decision to expand capacity by adding nearly 10 seats to its 18 Boeing 717 carriers will hurt the carrier's unit revenue while moving ahead. Moreover, stiff competition from low-cost carriers as well as from other legacy carriers may further dent the company's profitability in the upcoming quarter.
Earnings Whispers
Our proven model does not conclusively show that Hawaiian Holdings is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or at least 3 for this to happen. That is not the case here, as you will see below:
Zacks ESP: The Most Accurate estimate and the Zacks Consensus Estimate are poised at 85 cents. Hence, the ESP is 0.00%.
Zacks Rank: Hawaiian Holdings sports a Zacks Rank #1 (Strong Buy). While this increases the predictive power, we also need to have a positive ESP to be confident of an earnings surprise.
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 negative estimate revisions.
Stocks to Consider
Here are a few companies to consider as our model shows they 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 (Buy).
Sprint Corporation S has an earnings ESP of +32.14% and a Zacks Rank #3 (Hold).
InterDigital, Inc. IDCC has an earnings ESP of +33.33% and a Zacks Rank #3.
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
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 (Buy). Click to get this free report HAWAIIAN HLDGS (HA): 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 Hawaiian Holdings seems to be benefitting from low fuel prices and increased travel demand during the festive season.
|
Click to get this free report HAWAIIAN HLDGS (HA): 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 (Buy). Zacks Rank: Hawaiian Holdings sports a Zacks Rank #1 (Strong Buy).
|
Click to get this free report HAWAIIAN HLDGS (HA): 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 (Buy). Zacks Rank: Hawaiian Holdings sports a Zacks Rank #1 (Strong Buy).
|
American Airlines Group AAL has an earnings ESP of +1.53% and a Zacks Rank #2 (Buy). Click to get this free report HAWAIIAN HLDGS (HA): 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 Rank: Hawaiian Holdings sports a Zacks Rank #1 (Strong Buy).
|
8107.0
|
2016-01-21 00:00:00 UTC
|
Can 3M (MMM) Pull Off a Q4 Earnings Beat on Restructuring?
|
AAL
|
https://www.nasdaq.com/articles/can-3m-mmm-pull-off-a-q4-earnings-beat-on-restructuring-2016-01-21
|
nan
|
nan
|
Industrial goods manufacturer 3M CompanyMMM is scheduled to report fourth-quarter 2015 results before the opening bell on Jan 26. In the last reported quarter, 3M's earnings beat the Zacks Consensus Estimate by 4 cents. Let's see how things are shaping up for this announcement.
Key Factors in the Fourth Quarter
3M has been making efforts to reposition its portfolio by divesting assets that no longer fit with its corporate strategy, while investing in ones which are more in tune with it. During fourth-quarter 2015, 3M sold its Library Systems business across the globe. The divested businesses included circulation management solutions primarily tailored for library customers with on-premise hardware and software, maintenance and service, and an emerging cloud-based digital lending platform.
Since 2012, the company has pruned its businesses from 40 to 26, thereby improving customer relevance, productivity and speed through a leaner operating structure. At the same time, 3M has invested steadily in R&D to develop innovative products. Furthermore, the company is standardizing its business processes through a new global ERP system. It believes that these efforts will result in significant annual operational savings and reduction in working capital.
Portfolio management, investment in innovation and business transformation are the three key levers on which 3M intends to focus on in the future. These efforts would lend give the company a competitive edge in the industry.
However, its portfolio restructuring initiatives notwithstanding, 3M expects its quarterly as well as full year results to be adversely affected by weak macroeconomic conditions throughout the globe. 3M conducts businesses in major foreign currencies due to its worldwide operations. With plummeting oil prices and fears of a global economic slowdown amid heightened tensions in the Middle East, unfavorable movement in foreign currency exchange rates is expected to adversely impact sales during the quarter. This, in turn, might affect its earnings as well.
Earnings Whispers
Our proven model does not conclusively show that 3M 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 pegged at 0.00%.
Zacks Rank: 3M'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 #1.
The Chubb Corporation CB , earnings ESP of +1.32% and Zacks Rank #1.
MicroStrategy Inc. MSTR , earnings ESP of +3.46% and 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
MICROSTRATEGY (MSTR): Free Stock Analysis Report
3M CO (MMM): Free Stock Analysis Report
CHUBB LTD (CB): 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 #1. Click to get this free report MICROSTRATEGY (MSTR): Free Stock Analysis Report 3M CO (MMM): Free Stock Analysis Report CHUBB LTD (CB): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Key Factors in the Fourth Quarter 3M has been making efforts to reposition its portfolio by divesting assets that no longer fit with its corporate strategy, while investing in ones which are more in tune with it.
|
Click to get this free report MICROSTRATEGY (MSTR): Free Stock Analysis Report 3M CO (MMM): Free Stock Analysis Report CHUBB LTD (CB): 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 #1. In the last reported quarter, 3M's earnings beat the Zacks Consensus Estimate by 4 cents.
|
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 #1. Click to get this free report MICROSTRATEGY (MSTR): Free Stock Analysis Report 3M CO (MMM): Free Stock Analysis Report CHUBB LTD (CB): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Rank: 3M'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 #1. Click to get this free report MICROSTRATEGY (MSTR): Free Stock Analysis Report 3M CO (MMM): Free Stock Analysis Report CHUBB LTD (CB): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. During fourth-quarter 2015, 3M sold its Library Systems business across the globe.
|
8108.0
|
2016-01-21 00:00:00 UTC
|
Canadian Pacific (CP) Misses on Q4 Earnings & Revenues
|
AAL
|
https://www.nasdaq.com/articles/canadian-pacific-cp-misses-on-q4-earnings-revenues-2016-01-21
|
nan
|
nan
|
Canada's leading railway operator Canadian Pacific Railway LimitedCP reported earnings per share (EPS) of C$2.08 ($1.50) in the fourth quarter of 2015, down from C$2.63 ($2.32) recorded in the year-ago quarter. Adjusted EPS of C$2.72 ($1.96) also missed the Zacks Consensus Estimate of $2.03.
Quarterly revenues fell 4.4% year over year to C$1,687 million ($1,218 million) and lagged the Zacks Consensus Estimate of $1,294 million. Revenues were hurt by weaker coal demand. Carloads (volume) decreased 6% year over year and revenue ton-miles fell 7%.
Operating income dipped 4.4% year over year to C$677 million ($488.8 million). Meanwhile, operating expenses declined 8.9%. Operating ratio (defined as operating expenses as a percentage of revenues) was flat at 59.8% on continued focus on asset efficiency, safety measures and productivity improvement.
Liquidity
Canadian Pacific exited the fourth quarter with cash and cash equivalents of C$650 million ($469.3 million) compared with C$226 million ($173 million) at the end of 2014. Long-term debt totaled C$8,927 million compared with C$5,625 million at the end of 2014.
Guidance
Canadian Pacific expects operating ratio in 2016 to remain below 59%, while incurring capital expenditure of $1.1 billion. The company also believes that it will generate double-digit EPS growth in 2016, higher than that in 2015, while adjusted EPS is expected to be $10.10.
Zacks Rank & Key Picks
Currently, Canadian Pacific has a Zacks Rank #3 (Hold). Better-ranked transportation stocks include American Airlines Group AAL , Delta Air Lines Inc. DAL and Alaska Air Group, Inc. ALK . All 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
DELTA AIR LINES (DAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
CDN PAC RLWY (CP): 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.
|
Better-ranked transportation stocks include American Airlines Group AAL , Delta Air Lines Inc. DAL and Alaska Air Group, Inc. ALK . Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Canada's leading railway operator Canadian Pacific Railway LimitedCP reported earnings per share (EPS) of C$2.08 ($1.50) in the fourth quarter of 2015, down from C$2.63 ($2.32) recorded in the year-ago quarter.
|
Better-ranked transportation stocks include American Airlines Group AAL , Delta Air Lines Inc. DAL and Alaska Air Group, Inc. ALK . Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Quarterly revenues fell 4.4% year over year to C$1,687 million ($1,218 million) and lagged the Zacks Consensus Estimate of $1,294 million.
|
Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Better-ranked transportation stocks include American Airlines Group AAL , Delta Air Lines Inc. DAL and Alaska Air Group, Inc. ALK . Quarterly revenues fell 4.4% year over year to C$1,687 million ($1,218 million) and lagged the Zacks Consensus Estimate of $1,294 million.
|
Better-ranked transportation stocks include American Airlines Group AAL , Delta Air Lines Inc. DAL and Alaska Air Group, Inc. ALK . Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Quarterly revenues fell 4.4% year over year to C$1,687 million ($1,218 million) and lagged the Zacks Consensus Estimate of $1,294 million.
|
8109.0
|
2016-01-21 00:00:00 UTC
|
Southwest Airlines (LUV) Q4 Earnings Meet, Revenues Lag
|
AAL
|
https://www.nasdaq.com/articles/southwest-airlines-luv-q4-earnings-meet-revenues-lag-2016-01-21
|
nan
|
nan
|
Low cost U.S. carrier Southwest Airlines Co.LUV reported fourth-quarter 2015 financial numbers wherein the bottom line was on par with the Zacks Consensus Estimate while the top line missed the same.
Southwest Airlines reported earnings of 90 cents per share, in line with the Zacks Consensus Estimate. Quarterly revenues moved up 7.5% year over year to $4,977 million, missing the Zacks Consensus Estimate of $4,990 million. On a year-over-year basis, Passenger and Other revenues increased 3.3% and 119.1%, respectively, however, Freight revenues dropped 2.2%.
Southwest Airlines Company (LUV) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany
Operating Statistics
Airline traffic, measured in billions of revenue passenger miles, increased 11% year over year to 29.72 billion in the quarter under review. Capacity or available seat miles increased 8.4% to 35.37 billion, while load factor (percentage of seats filled by passengers) stood at 84.1% compared with 82% in the year-ago quarter. Meanwhile, passenger revenue per available seat mile (PRASM) fell 4.7% year over year to 12.87 cents.
Operating Expenses & Income
In the fourth quarter of 2015, adjusted operating income came in at $1,026 million, up a substantial 65.2% year over year mainly buoyed by a decline in fuel cost. Total adjusted operating expenses dropped 1.4% year over year to $3,951 million. Fuel price (economic) stood at $2.03 per gallon, down from $2.62 a year ago. Consolidated unit cost or cost per available seat mile (CASM), excluding fuel, oil and special items, decreased 0.1% year over year to 8.51 cents. Revenue per available seat mile (RASM) stood at 14.07 cents, down 0.7% year over year.
Liquidity
At the end of fourth-quarter 2015, Southwest Airlines had $3,051 million in cash and short-term investments compared with $2,988 million at the end of 2014. In the reported quarter, the company had long-term debt (including current portion) of $2,541 million compared with $2,434 million at the end of 2014. Southwest Airlines generated operating cash flow of $324 million in the reported quarter compared with $203 million in the same quarter last year. At the end of fourth-quarter 2015, free cash flow consumption was $486 million compared with cash consumption of $264 million in the year-ago quarter.
Guidance
Southwest Airlines expects RASM to remain flat year over year in the first quarter of 2016.
Zacks Rank & Other Key Picks
Southwest Airlines currently sports a Zacks Rank #1 (Strong Buy). Other favorably ranked stocks in the industry include American Airlines Group AAL , Delta Air Lines Inc. DAL and Alaska Air Group, Inc. ALK . All the three stocks carry 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
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.
|
Other favorably ranked stocks in the industry include American Airlines Group AAL , Delta Air Lines Inc. DAL and Alaska Air Group, Inc. ALK . 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 reported earnings of 90 cents per share, in line with the Zacks Consensus Estimate.
|
Other favorably ranked stocks in the industry include American Airlines Group AAL , Delta Air Lines Inc. DAL and Alaska Air Group, Inc. ALK . 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. At the end of fourth-quarter 2015, free cash flow consumption was $486 million compared with cash consumption of $264 million in the year-ago quarter.
|
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. Other favorably ranked stocks in the industry include American Airlines Group AAL , Delta Air Lines Inc. DAL and Alaska Air Group, Inc. ALK . Southwest Airlines Company (LUV) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany Operating Statistics Airline traffic, measured in billions of revenue passenger miles, increased 11% year over year to 29.72 billion in the quarter under review.
|
Other favorably ranked stocks in the industry include American Airlines Group AAL , Delta Air Lines Inc. DAL and Alaska Air Group, Inc. ALK . 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. Quarterly revenues moved up 7.5% year over year to $4,977 million, missing the Zacks Consensus Estimate of $4,990 million.
|
8110.0
|
2016-01-20 00:00:00 UTC
|
Will a Digitally Focused Industrial GE Beat on Q4 Earnings?
|
AAL
|
https://www.nasdaq.com/articles/will-a-digitally-focused-industrial-ge-beat-on-q4-earnings-2016-01-20
|
nan
|
nan
|
Industrial goods manufacturer General Electric CompanyGE is scheduled to report fourth-quarter 2015 results before the opening bell on Jan 22. In the last reported quarter, General Electric's operating earnings exceeded the Zacks Consensus Estimate by 6 cents. Let's see how things are shaping up for this announcement.
Key Factors in the Fourth Quarter
General Electric is actively pursuing with its massive restructuring initiatives in order to create a simpler and nimbler firm. From a classic conglomerate with diversified business interests in financial services, media, industrial and technology-based operations, the company is pruning its operating portfolio to focus on core manufacturing businesses with a digital edge.
During 2015, General Electric announced asset sales totaling $104 billion in ending net investment (ENI), a sizable portion of which was done in the last few weeks of the year. By and large, the business units have been selling at par or somewhat above par, as they are performing and not distressed assets. Also, there is significant demand for these assets from financial firms that have very few solid buying opportunities.
The transactions are in conformity with the corporate strategy of building a manufacturing-based entity with emphasis on big-ticket items such as aviation engines, drilling machines, generators, medical equipment and scanners. With these restructuring initiatives, General Electric expects operating earnings from the industrial business to comprise over 90% of its total operating earnings by 2018, up from 58% in 2014.
During the fourth quarter, General Electric completed the share swap deal with Synchrony Financial as part of its corporate strategy to further dissociate itself from the financial business. With the transaction, General Electric shed about 85% ownership stake from the spun-off entity. According to the terms of the deal, General Electric offered 1.0505 shares of Synchrony Financial for each of its shares. This equated to a buyback of over 671 million General Electric shares for approximately 705 million of Synchrony Financial shares upon full consummation of the exchange offer. This, in turn, reduced the outstanding number of shares of General Electric by about 6.6% and is likely to improve its bottom line on a per share basis.
In fourth-quarter 2015, General Electric also finalized the acquisition of Alstom's energy assets. The Alstom deal promises excellent return on capital, supply chain efficiencies and cost synergies to the tune of $3 billion in five years. It will also mark the biggest acquisition ever for General Electric and significantly expand its European footprint. With Alstom's energy assets, General Electric is expected to be one of the biggest manufacturers of power plant equipment across the globe. In addition to incremental revenues, the deal further reinforces General Electric's strategy to focus on core industrial operations.
In addition, General Electric scrapped the deal to sell its electronics appliance unit to Swedish premier electronics manufacturer Electrolux AB. Although the company cited no official reason for the termination of the $3.3 billion transaction, it was apparently evident that the acrimonious lawsuit filed by the U.S. Department of Justice and its continuous scrutiny led to the cancellation of the deal. With the termination of the deal, General Electric received a break-up fee of $175 million from Electrolux. Subsequently, the company sold its appliance business to the Chinese multinational consumer electronics manufacturer Haier Group in the first quarter of 2016.
Earnings Whispers
Despite all-out attempts to restructure its business, our proven model does not conclusively show that General Electric 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 pegged at 0.00%.
Zacks Rank: General Electric'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 +1.55% and a Zacks Rank #2.
The Chubb Corporation CB , earnings ESP of +1.32% and Zacks Rank #1.
MicroStrategy Inc. MSTR , earnings ESP of +3.46% and 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
MICROSTRATEGY (MSTR): Free Stock Analysis Report
GENL ELECTRIC (GE): Free Stock Analysis Report
CHUBB LTD (CB): 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 +1.55% and a Zacks Rank #2. Click to get this free report MICROSTRATEGY (MSTR): Free Stock Analysis Report GENL ELECTRIC (GE): Free Stock Analysis Report CHUBB LTD (CB): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Key Factors in the Fourth Quarter General Electric is actively pursuing with its massive restructuring initiatives in order to create a simpler and nimbler firm.
|
Click to get this free report MICROSTRATEGY (MSTR): Free Stock Analysis Report GENL ELECTRIC (GE): Free Stock Analysis Report CHUBB LTD (CB): 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 +1.55% and a Zacks Rank #2. In the last reported quarter, General Electric's operating earnings exceeded the Zacks Consensus Estimate by 6 cents.
|
Click to get this free report MICROSTRATEGY (MSTR): Free Stock Analysis Report GENL ELECTRIC (GE): Free Stock Analysis Report CHUBB LTD (CB): 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 +1.55% and a Zacks Rank #2. With these restructuring initiatives, General Electric expects operating earnings from the industrial business to comprise over 90% of its total operating earnings by 2018, up from 58% in 2014.
|
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 +1.55% and a Zacks Rank #2. Click to get this free report MICROSTRATEGY (MSTR): Free Stock Analysis Report GENL ELECTRIC (GE): Free Stock Analysis Report CHUBB LTD (CB): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. During the fourth quarter, General Electric completed the share swap deal with Synchrony Financial as part of its corporate strategy to further dissociate itself from the financial business.
|
8111.0
|
2016-01-20 00:00:00 UTC
|
Attack of the Airline Fees: 3 Fees You Might Expect in the Not-So-Distant Future
|
AAL
|
https://www.nasdaq.com/articles/attack-airline-fees-3-fees-you-might-expect-not-so-distant-future-2016-01-20
|
nan
|
nan
|
"Airline profits are soaring -- but it's not good news for consumers." That was the headline on Fortune magazine this past summer, and truer words were never spoken.
Although the final results aren't in yet, by mid-year Fortune was already projecting that 2015 would be a record year for the global air travel industry, with profits topping $29 billion. Unfortunately, Fortune also cautioned that "just because the airline you're flying is making more money doesn't mean you'll have a better flight," adding, "In many cases, you should expect the exact opposite."
A lot of the blame for this can be chalked up to the ever increasing array of "nickel-and-dime" fees that airliners charge for services that used to be included in the price of a simple ticket. Fees that generally cost a whole lot more than a nickel or a dime. In today's roundtable, we've rounded up three of our experts to preview the next wave of profitable fee surcharges that air travelers should prepare for.
Sean Williams : A few years prior it would have been uncommon for your airline to charge you for requesting a specific seat, such as an aisle, window, or seat toward the front of the plane. Today, though, far more airlines charge their passengers for this convenience of choice, and I suspect it's only going to get more prevalent as time passes and airlines look for ways to pad their margins.
Charging for seat preference might be the easiest of all add-on fees for the airline industry because it requires virtually no investment whatsoever. Most airlines have upgraded their check-in process to be done at a kiosk, eliminating the costly use of an airline employee. Simply adding in an option within the check-in process for the consumer to choose whether or not they'd like to pay to select their seat could result in a big payday for airlines. It's an easy way to generate pure profits.
For example, bare-bones airline Spirit Airlines charges its customers anywhere from $1 to as much as $50 for the selection of their regular priced seats. If you want a larger seat, you'll pay anywhere from $12 to as much as $199 in advance. There are also onboard upgrades available on Spirit Airlines' flights that'll set you back $25 to $75. It's still free, though, to let Spirit Airlines choose your seat for you, but if you don't like running the risk of sitting in between passengers, this is a risk you may not want to take.
Other airlines have also taken to charging customers for the "luxury" of early boarding. With many popular flights sold out, overhead baggage space can be scarce. Boarding early ensures you'll be near your carry-on bag upon arrival and you'll be comfortably in place before everyone else.
One popular airline still bucking these trends is Alaska Air . Alaska is one of the remaining airlines not to charge a boarding or seat selection fee, which probably contributes to its high satisfaction ratings. Of course, Alaska will still get consumers for checked bag fees and a $125 ticket-change fee should you need to change your flight. Overall, though, Alaska comes out looking like one of the few "good guys" left in a sea of rampant fees.
Rich Smith : Charging travelers for carry-on luggage isn't a popular idea in the airline industry today -- but it could become so.
Currently, none of the major -- what we used to call "legacy" -- airlines such as American Airlines , Delta Air Lines , or United Airlines charge customers for carry-ons. At least not for one carry-on. American, Delta, and Unitedcurrently rank Nos. 1, 2, and 3, respectively, in the U.S. in terms of traffic, and all permit passengers to board with their first carry-on free.
Not so with the discount carriers. According to website Farecompare.com , two low-price airlines have already pioneered the charging of fees for carry-ons. Spirit Airlines, which Sean has already highlighted as a nickel-and-dimer, charges anywhere from $20 to $100 for a piece of carry-on luggage. Frontier Airlines charges anywhere from $35 to $60 to carry on. That's more than the $30 to $40 Frontier charges to check an ordinary-size suitcase. It's way more than American Airlines, Delta, or United charge for your first piece of checked luggage. (Moving in lockstep, each charges $25 in lockstep for this privilege).
Now mind you, charging for carry-ons isn't entirely bad news. Yes, those fees plump these airlines' profits (privately owned Frontier doesn't have to tell us how much it makes from fees, but Spirit's profits surged 45% last quarter). But I recently flew Frontier myself, and I can testify -- high carry-on fees tend to discourage flyers from carrying on luggage. As a result, there's always plenty of space in the bins for those who do carry on.
Generally speaking, this makes the boarding and seating process run a whole lot smoother on Frontier, than on airlines where every passenger is competing to cram their fee-free carry-ons into the bins.
Dan Caplinger : One of the most offensive revenue generators that airlines have ever proposed is a fee to use airplane bathrooms. European airline Ryanair pioneered the idea, initially suggesting a charge of one British pound or one euro to use the facilities onboard its aircraft. Although Ryanair ended up dropping its plan to charge for onboard toilets, some have feared that other airlines might pick up on the proposal.
To prevent pay toilets from becoming a reality on U.S. airlines, a recent House bill proposed to prohibit airlines from charging fees for bathrooms on flights. Rep. Dan Lipinski (D-Ill.) argued that with the number of new charges for items that used to be free on airline flights, including drinks, snacks, and baggage handling, explicitly preventing airlines from adding bathroom usage to the list is an essential part of ensuring that passengers have at least some basic rights when they travel. In addition, as proposed, the bill would allow passengers to request transfer to another flight if a plane didn't have adequate functioning lavatories on board. Whether the measure will pass is unclear, but given the proliferation of fees in recent years, many travelers will appreciate putting at least some limits on what you'll have to pay for in the air.
Pick your battles
Now that you know where the next round of airline fees is coming from -- and from whom -- you're in a better position to decide: Are the low ticket prices on discount airlines worth it? Are you willing to pay the occasional irksome fee to get a lower ticket price?
If not, then the choice is clear: You can still buy the discount airplane stocks and profit from their fee policies. Just make sure to do yourown flying with someone else.
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 Attack of the Airline Fees: 3 Fees You Might Expect in the Not-So-Distant Future originally appeared on Fool.com.
Dan Caplinger has no position in any stocks mentioned. Rich Smith has no position in any stocks mentioned. Sean Williams 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 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.
|
Although the final results aren't in yet, by mid-year Fortune was already projecting that 2015 would be a record year for the global air travel industry, with profits topping $29 billion. A lot of the blame for this can be chalked up to the ever increasing array of "nickel-and-dime" fees that airliners charge for services that used to be included in the price of a simple ticket. Generally speaking, this makes the boarding and seating process run a whole lot smoother on Frontier, than on airlines where every passenger is competing to cram their fee-free carry-ons into the bins.
|
Rich Smith : Charging travelers for carry-on luggage isn't a popular idea in the airline industry today -- but it could become so. Currently, none of the major -- what we used to call "legacy" -- airlines such as American Airlines , Delta Air Lines , or United Airlines charge customers for carry-ons. To prevent pay toilets from becoming a reality on U.S. airlines, a recent House bill proposed to prohibit airlines from charging fees for bathrooms on flights.
|
Currently, none of the major -- what we used to call "legacy" -- airlines such as American Airlines , Delta Air Lines , or United Airlines charge customers for carry-ons. To prevent pay toilets from becoming a reality on U.S. airlines, a recent House bill proposed to prohibit airlines from charging fees for bathrooms on flights. Rep. Dan Lipinski (D-Ill.) argued that with the number of new charges for items that used to be free on airline flights, including drinks, snacks, and baggage handling, explicitly preventing airlines from adding bathroom usage to the list is an essential part of ensuring that passengers have at least some basic rights when they travel.
|
Rich Smith : Charging travelers for carry-on luggage isn't a popular idea in the airline industry today -- but it could become so. Pick your battles Now that you know where the next round of airline fees is coming from -- and from whom -- you're in a better position to decide: Are the low ticket prices on discount airlines worth it? If not, then the choice is clear: You can still buy the discount airplane stocks and profit from their fee policies.
|
8112.0
|
2016-01-20 00:00:00 UTC
|
The Zacks Analyst Blog Highlights: Alaska Air Group, American Airlines Group, Allegiant Travel and Spirit Airlines
|
AAL
|
https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-alaska-air-group-american-airlines-group-allegiant
|
nan
|
nan
|
For Immediate Release
Chicago, IL - January 20, 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 Alaska Air Group ( ALK ) , American Airlines Group ( AAL ) , Allegiant Travel Company ( ALGT ) and Spirit Airlines ( SAVE ) .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Tuesday's Analyst Blog:
4 Airlines Set for Impressive Q4 Earnings Numbers on Weak Oil
The weakness in oil prices , prevalent through the whole of 2015, benefited airline stocks greatly helping them register significant bottom-line growth. Operating expenses of airline companies have gone down considerably owing to the steep fall in fuel expenses - one of the major input costs for an airline. This has naturally resulted in huge savings for carriers.
Apart from American Airlines Group , which does not hedge fuel costs, carriers like Delta Air Lines , which has restructured its fuel hedge portfolio in the wake of the soft fuel price environment, too have been huge beneficiaries of plunging oil prices.
Strengthened Balance sheets Prompt Rise in Shareholder Friendly Activities
With low oil prices significantly bolstering the balance sheets of most carriers, it is quite natural that stocks in the high-flying airline space are looking to return a part of their massive profits to shareholders through dividend payments and buyback activities.
During the first three quarters of 2015, we have seen industry heavyweights like Delta Air Lines and Southwest Airlines hiking their dividend payouts. The airline space has also seen a surge in share buybacks. For example, on their third quarter conference call, the board of directors at American Airlines authorized an additional $2 billion share repurchase program, which is expected to be completed by Dec 31, 2016. We expect carriers to provide additional updates on their shareholder friendly activities on their respective fourth quarter conference calls as well.
Dividend hikes and the surge in buyback activities apart, carriers have also taken advantage of the soft oil price scenario to reduce their debt levels. The decision to invest substantially toward enhancing the flying experience can also be seen as a direct consequence of airlines being in the pink of financial health.
Some Headwinds to Watch Out For
Although airline companies saw their bottom line enjoying the fruits of cheaper crude, top-line growth stumbled due to certain headwinds plaguing the aviation space.
Worries related to a key revenue metric - passenger revenue per available seat mile (PRASM) - have concerned carriers for quite some time now. Apart from a strengthening U.S. dollar, lower fuel surcharges on international flights due to soft oil prices have also pressurized this key metric that is a measure of sales relative to capacity for a carrier.
For example, United Continental recently announced that it expects its fourth quarter PRASM to decline in the band of 5.75% to 6.25% on a consolidated basis (the earlier projection had called for a decline in the 4% to 6% range). American Airlines predicts PRASM for the fourth quarter to decline in the band of 5% to 7%. That carriers would struggle on the revenue front in the fourth quarter as well can be gauged from the Zacks Earning Trends report which suggests that the S&P 500 stocks in the transportation sector, of which airlines are a part, would increase a mere 0.7% in the final quarter of 2015, on a year-over-year basis. Capacity and pricing woes have also been hitting airline stocks hard for quite some time now.
Apart from commentaries on PRASM and capacity on their fourth quarter conference calls, we keenly await the impact (if any) of the deadly Paris attacks on the carriers' fourth quarter results. Following the Nov 2015 attacks, the U.S. State Department had issued a global travel alert for U.S. citizens. The alert is valid through Feb 24, 2016. United Continental has primarily blamed the dastardly attacks for its bearish PRASM view (stated above).
Airlines to Fly High in Q4 Courtesy Oil Despite Challenges
Despite the abovementioned headwinds, we believe that the upcoming fourth quarter earnings season in the airlines space is set to witness a strong bottom-line performance, in line with the preceding quarters of 2015. Thanks, once again, to the dip in oil prices.
Oversupply resulted in oil prices trading well below the $50 per barrel mark for the entire fourth quarter. The Dec 2015 decision of the Organization of the Petroleum Exporting Countries (OPEC) - an international cartel of oil producers - to not cut oil production, has pushed oil prices below the $30 per barrel mark. This means further good news for carriers, given the inverse relation between oil prices and the health of aviation stocks.
4 Likely Airline Superstars of Q4
With weak oil likely to make the closing quarter of 2015 a stellar one yet again for airline stocks, particularly with respect to the bottom line, we believe it would be prudent to zero in on some stocks in the space that are likely to report higher-than-expected earnings in the fourth quarter. More often than not, a positive earnings surprise delivered by a company sees its stock price skyrocketing.
However, the task of selecting the right stock for higher returns is by no means an easy one, given the vastness of the industry participants. The process is akin to searching for 'a needle in a haystack' unless one is aware of an appropriate method to arrive at the right choice.
One sure-shot way to success is picking stocks that have the combination of a favorable Zacks Rank - Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) - and a positive Earnings ESP . Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising with their upcoming earnings announcement. It shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
With the aid of the above methodology, we hereby pin point four airline stocks that look likely to beat the Zacks Consensus Estimate in the fourth quarter of 2015.
Our first choice would be Alaska Air Group ( ALK ) - the parent company of Alaska Airlines. The Seattle, WA-based company, sporting a Zacks Rank #1, has an earnings ESP of +0.70%. The Zacks Consensus Estimate of earnings for the fourth quarter is pegged at $1.43 per share.
It is worth noting that the company has registered positive earnings surprises in each of the last four quarters, with an average beat of 2.45%. The combination of a favorable Zacks Rank and a positive earnings ESP makes us confident of an earnings beat from this carrier in the fourth quarter as well, results of which will be revealed on Jan 21, before the commencement of trading.
Our next choice would be American Airlines Group ( AAL ), based in Fort Worth, TX. This Zacks Rank #1 stock has an earnings ESP of +1.55%. The Zacks Consensus Estimate for fourth-quarter earnings is $1.94. Notably, the company has registered positive earnings surprises in each of the last four quarters, with an average beat of 1.36%. The carrier will report its fourth-quarter results on Jan 29, before the commencement of trading.
Allegiant Travel Company ( ALGT ), based in Las Vegas, NV, also features in our current list of favorites, by virtue of its Zacks Rank #3 and an earnings ESP of +0.64%. The Zacks Consensus Estimate for the fourth quarter is pegged at $3.15.
The parent company of Allegiant Airlines, which will reveal its fourth-quarter results on Jan 27 after the close of trading, has registered positive earnings surprises in each of the last four quarters, with an average beat of 9.18%. The favorable combination sported by the company makes us confident of an earnings beat from Allegiant Travel, this time as well.
Low-cost carrier Spirit Airlines ( SAVE ) rounds off our list of airline stocks that are likely to deliver higher-than-expected earnings in the final quarter of 2015. This Miramar, FL-based Zacks Rank #3 company has an earnings ESP of +2.50%. The Zacks Consensus Estimate for the fourth quarter is pegged at $0.80.
The carrier, which delivered positive earnings surprises in three of the last four quarters, with an average beat of 2.84%, is expected to reveal its fourth-quarter results on Feb 9.
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
ALASKA AIR GRP (ALK): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report
SPIRIT AIRLINES (SAVE): 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 Alaska Air Group ( ALK ) , American Airlines Group ( AAL ) , Allegiant Travel Company ( ALGT ) and Spirit Airlines ( SAVE ) . Our next choice would be American Airlines Group ( AAL ), based in Fort Worth, TX. Click to get this free report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report To read this article on Zacks.com click here.
|
Stocks recently featured in the blog include Alaska Air Group ( ALK ) , American Airlines Group ( AAL ) , Allegiant Travel Company ( ALGT ) and Spirit Airlines ( SAVE ) . Click to get this free report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report To read this article on Zacks.com click here. Our next choice would be American Airlines Group ( AAL ), based in Fort Worth, TX.
|
Click to get this free report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks recently featured in the blog include Alaska Air Group ( ALK ) , American Airlines Group ( AAL ) , Allegiant Travel Company ( ALGT ) and Spirit Airlines ( SAVE ) . Our next choice would be American Airlines Group ( AAL ), based in Fort Worth, TX.
|
Stocks recently featured in the blog include Alaska Air Group ( ALK ) , American Airlines Group ( AAL ) , Allegiant Travel Company ( ALGT ) and Spirit Airlines ( SAVE ) . Our next choice would be American Airlines Group ( AAL ), based in Fort Worth, TX. Click to get this free report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report To read this article on Zacks.com click here.
|
8113.0
|
2016-01-19 00:00:00 UTC
|
Delta Misses Q4 Earnings, Revenues; Q1 PRASM View Soft
|
AAL
|
https://www.nasdaq.com/articles/delta-misses-q4-earnings-revenues-q1-prasm-view-soft-2016-01-19
|
nan
|
nan
|
Delta Air Lines Inc.DAL kicked off the fourth quarter earnings season for airline stocks, but on a disappointing note. The airline behemoth reported lower than expected revenues as well as earnings in the final quarter of 2015.
The Atlanta, GA-based carrier's fourth quarter earnings (excluding special items) of $1.18 per share fell short of the Zacks Consensus Estimate by a penny. Earnings however increased 51% on a year-over-year basis backed by low fuel costs.
Delta Air Lines Inc. (DAL) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany
Operating revenues came in at $9,502 million, lagging the Zacks Consensus Estimate of $9,624 million. Revenues also declined 2% from the year-ago figure. The top line was hurt by adverse foreign currency movements which negatively impacted the top line to the tune of $160 million.
During the quarter, passenger revenues and cargo revenues declined 1.3% and 20.4% respectively while other revenues improved 1.3% year over year. Delta expects soft fuel prices to result in savings in excess of $3 billion in 2016. The average fuel price at Delta in the fourth quarter was $1.85 per gallon, down 29% year over year.
Operating Statistics
Revenue passenger miles (a measure of air traffic), went up 3% year over year to 49.57 billion. Capacity or available seat miles remained flat at 58.2 billion. Load factor (percentage of seats filled with passengers) improved 240 basis points year over year to 85.2% as traffic expanded while capacity expansion was non-existent in the quarter. Passenger revenue per available seat mile (PRASM) declined 1.6% year over year to 13.96 cents mainly due to currency woes.
Operating Expenses
Total operating expenses, including special items, declined 26% year over year to $7,785 million. Consolidated unit cost or cost per available seat mile (CASM), excluding fuel cost, profit sharing and special items, improved 1.9%.
Liquidity
At the end of the fourth quarter of 2015, Delta had $1.97 billion in cash and cash equivalents and adjusted net debt of $6.7 billion. The company has reduced its net debt significantly since 2009. Delta generated free cash flow of $300 million in the fourth quarter of 2015. Adjusted operating cash flow was $1.4 billion.
Dividend and Share Repurchase
The final quarter of 2015 saw the company returning $530 million to shareholders. During 2015, Delta returned $2.6 billion to its shareholders through dividends ($360 million) and buybacks ($2.2 billion). We are impressed by the company's efforts to return greater value to shareholders consistently.
First-Quarter 2016 Guidance
For the first quarter of 2016, the carrier expects operating margin in the range of 18% to 20%. Fuel price, including taxes and hedges, is expected in the range of $1.20 to $1.25 per gallon for the first quarter. System capacity is expected to rise in the band of 2% to 3% on a year-over-year basis. Passenger unit revenue, or PRASM, in the first quarter is projected to decline in the band of 2.5% to 4.5%.
Zacks Rank
Delta Air Lines currently sports a Zacks Rank #1 (Strong Buy). Investors interested in the airline space may also consider American Airlines Group AAL , Southwest Airlines Co. LUV and Virgin America VA . All the three carriers sport the same bullish rank as Delta.
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
SOUTHWEST AIR (LUV): 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.
|
Investors interested in the airline space may also consider American Airlines Group AAL , Southwest Airlines Co. LUV and Virgin America VA . Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): 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. Delta Air Lines Inc.DAL kicked off the fourth quarter earnings season for airline stocks, but on a disappointing note.
|
Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): 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. Investors interested in the airline space may also consider American Airlines Group AAL , Southwest Airlines Co. LUV and Virgin America VA . Operating Expenses Total operating expenses, including special items, declined 26% year over year to $7,785 million.
|
Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): 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. Investors interested in the airline space may also consider American Airlines Group AAL , Southwest Airlines Co. LUV and Virgin America VA . Delta Air Lines Inc. (DAL) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany Operating revenues came in at $9,502 million, lagging the Zacks Consensus Estimate of $9,624 million.
|
Investors interested in the airline space may also consider American Airlines Group AAL , Southwest Airlines Co. LUV and Virgin America VA . Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): 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. Delta Air Lines Inc.DAL kicked off the fourth quarter earnings season for airline stocks, but on a disappointing note.
|
8114.0
|
2016-01-19 00:00:00 UTC
|
Will Union Pacific (UNP) Q4 Earnings Fall Prey to Coal Woes?
|
AAL
|
https://www.nasdaq.com/articles/will-union-pacific-unp-q4-earnings-fall-prey-to-coal-woes-2016-01-19
|
nan
|
nan
|
Leading railroad operator, Union Pacific CorporationUNP , is slated to release its fourth quarter and full-year 2015 financial numbers before the market opens on Jan 21.
Last quarter, revenues at Union Pacific decreased 10% year over year to $5.56 billion, missing the Zacks Consensus Estimate of $5.65 billion. Declining coal shipments hurt quarterly results with volumes slipping 6% mainly due to coal woes. Apart from coal, decreasing volumes of industrial products and agricultural products also hurt the top line.
The company's earnings of $1.50 per share for the third quarter indicated a year-over-year decline of 2%. Our quantitative model doesn't hint at an earnings beat in the upcoming fourth quarter as well.
Here is what our model indicates:
The possibility of Union Pacific beating the Zacks Consensus Estimate in the fourth quarter is rather low. This is because it lacks the right combination of the two key ingredients - a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) - that reflects the possibility of a positive earnings surprise.
Zacks ESP : Earnings ESP for Union Pacific is -1.41%. This is because the Most Accurate estimate is $1.40 while the Zacks Consensus Estimate is pegged higher at $1.42.
Zacks Rank : Union Pacific has a Zacks Rank #4 (Sell).
Note that stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions as is the case with Union Pacific. Fourth quarter earnings per share estimate for the company has gone down by 7 cents to $1.43 over the last 90 days.
Factors at Play
Headwinds related to coal are expected to mar Union Pacific's fourth quarter results once again, as has been the case in the prior quarters of 2015. That the fourth quarter results will likely lag expectations was already hinted at by the company's CFO Rob Knight at the Credit Suisse industrial conference in Florida last month. Fourth quarter 2015 earnings are expected to decline on a year-over-year basis hurt by declining volumes.
We believe adverse foreign currency movements characterized by the strength of the dollar, lower fuel surcharges received from customers due to declining fuel costs and slow carload growth from the energy sector will also hurt the Omaha, NE-based company's fourth-quarter results.
In view of the bleak scenario, it is a no-brainer that declining coal shipments will hurt the company's results in the fourth quarter. In fact, coal continues to be a major bother for railroad operators like Union Pacific. While exports continue to be affected by a strong dollar, softness in the energy sector has encouraged utilities to switch to natural gas (a much cheaper alternative).
With the slowdown in coal shipments hurting the top line and the impact likely to continue, the struggling railroads are looking to cut costs to drive bottom-line growth. For example, according to an Associated Press report in August, Union Pacific intends to eliminate multiple management jobs. We expect further updates on the cost cutting measures at Union Pacific on the fourth quarter conference call.
Upcoming Railroad Releases
Apart from Union Pacific, railroad operators like Kansas City Southern KSU and Norfolk Southern Corp. NSC are slated to unveil their respective fourth quarter results on Jan 22 and Jan 27. We believe results of both these companies will also tend to be impacted by coal-related headwinds.
A Transportation Gem
With railroads struggling big time, we believe investors interested in the broader transportation space should look elsewhere for companies likely to beat the Zacks Consensus Estimate in the fourth quarter. One such company is American Airlines Group AAL which sports an earnings ESP of +1.55% and a Zacks Rank #1. The carrier is slated to release its fourth quarter results on Jan 29, before market opens.
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
KANSAS CITY SOU (KSU): Free Stock Analysis Report
UNION PAC CORP (UNP): Free Stock Analysis Report
NORFOLK SOUTHRN (NSC): 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.
|
One such company is American Airlines Group AAL which sports an earnings ESP of +1.55% and a Zacks Rank #1. Click to get this free report KANSAS CITY SOU (KSU): Free Stock Analysis Report UNION PAC CORP (UNP): Free Stock Analysis Report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Leading railroad operator, Union Pacific CorporationUNP , is slated to release its fourth quarter and full-year 2015 financial numbers before the market opens on Jan 21.
|
Click to get this free report KANSAS CITY SOU (KSU): Free Stock Analysis Report UNION PAC CORP (UNP): Free Stock Analysis Report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. One such company is American Airlines Group AAL which sports an earnings ESP of +1.55% and a Zacks Rank #1. This is because it lacks the right combination of the two key ingredients - a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) - that reflects the possibility of a positive earnings surprise.
|
Click to get this free report KANSAS CITY SOU (KSU): Free Stock Analysis Report UNION PAC CORP (UNP): Free Stock Analysis Report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. One such company is American Airlines Group AAL which sports an earnings ESP of +1.55% and a Zacks Rank #1. Factors at Play Headwinds related to coal are expected to mar Union Pacific's fourth quarter results once again, as has been the case in the prior quarters of 2015.
|
One such company is American Airlines Group AAL which sports an earnings ESP of +1.55% and a Zacks Rank #1. Click to get this free report KANSAS CITY SOU (KSU): Free Stock Analysis Report UNION PAC CORP (UNP): Free Stock Analysis Report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Note that stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions as is the case with Union Pacific.
|
8115.0
|
2016-01-19 00:00:00 UTC
|
United Continental (UAL) Q4 Earnings: What's in the Cards?
|
AAL
|
https://www.nasdaq.com/articles/united-continental-ual-q4-earnings%3A-whats-in-the-cards-2016-01-19
|
nan
|
nan
|
United Continental Holdings, Inc.UAL is slated to release its fourth-quarter 2015 results before the market opens on Jan 21.
Last quarter, United Continental recorded a positive earnings surprise of 0.89%. Moreover, the company's earnings have surpassed the Zacks Consensus Estimate in all the prior quarters, with an average beat of 3.64%. Let's see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
We believe continuous expansion of routes, introduction of ancillary products, fleet revamping, the company's joint ventures and code share agreements should drive considerable top-line growth in the to-be-reported quarter. Notably, fuel costs account for a major chunk of an airline's operating expenses. Consequently, cheaper oil price should boost United Continental's bottom line in the quarter. Revenues, however, are expected to be pressurized by a strong dollar, once again, this quarter.
Meanwhile, introduction of various value-added services to enhance customer experience should reflect in more retained passengers and improved air traffic in the quarter. Additionally, we are impressed by United Continental's strong balance sheet. The carrier's efforts to enhance shareholder's wealth through buybacks are also encouraging.
However, the disappointing PRASM forecast for the fourth quarter comes as a dampener. The metric is expected to decline 5.75% to 6.25% on a consolidated basis (the earlier projection was pegged at a decline of 4% to 6%). Further, stiff competition from the Gulf carriers and in the Pacific region, particularly China, may weigh on the airline's quarterly performance.
Earnings Whispers
Our proven model does not conclusively show that United Continental 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 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP : United Continental has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are poised at $2.59.
Zacks Rank : United Continental Group has a Zacks Rank #2 which increases the predictive power of ESP. However, 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 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 Inc. AAL has an earnings ESP of +1.55% and a Zacks Rank #1.
Spirit Airlines, Inc. SAVE has an earnings ESP of +2.50% and a Zacks Rank #3.
Allegiant Travel Company ALGT has an earnings ESP of +0.64% and a Zacks Rank #3.
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
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.
|
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 Inc. AAL has an earnings ESP of +1.55% and a Zacks Rank #1. Click to get this free report ALLEGIANT TRAVL (ALGT): 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. Meanwhile, introduction of various value-added services to enhance customer experience should reflect in more retained passengers and improved air traffic in the quarter.
|
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 Inc. AAL has an earnings ESP of +1.55% and a Zacks Rank #1. Click to get this free report ALLEGIANT TRAVL (ALGT): 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. 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 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 Inc. AAL has an earnings ESP of +1.55% and a Zacks Rank #1. Click to get this free report ALLEGIANT TRAVL (ALGT): 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 Rank : United Continental Group has a Zacks Rank #2 which increases the predictive power of ESP.
|
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 Inc. AAL has an earnings ESP of +1.55% and a Zacks Rank #1. Click to get this free report ALLEGIANT TRAVL (ALGT): 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 ESP : United Continental has an earnings ESP of 0.00%.
|
8116.0
|
2016-01-19 00:00:00 UTC
|
Is Alaska Air (ALK) Poised to Surprise Q4 Earnings Estimates?
|
AAL
|
https://www.nasdaq.com/articles/is-alaska-air-alk-poised-to-surprise-q4-earnings-estimates-2016-01-19
|
nan
|
nan
|
We expect Alaska Air Group, Inc.ALK to beat expectations when it reports fourth-quarter 2015 financial numbers, before the opening bell on Jan 21.
Last quarter, Alaska Air recorded a 3.85% positive earnings surprise. Let's see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
Declining fuel prices continue to boost profits for the overall airline industry. Lower prices for oil, which accounts for more than 30% of operating expenses, will not only drive profit but will also boost the operating margin for the carrier. Moreover, rising travel demand during the holiday season coupled with the launch of new routes and value-added services will certainly bolster bottom-line growth for the company.
Earnings Whispers
Our proven model does not conclusively show that Alaska Air 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 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Alaska Air's earnings ESP is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are poised at $1.43.
Zacks Rank: Alaska Airhas a Zacks Rank #1 which increases the predictive power of ESP. However, 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 negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
American Airlines Group Inc. AAL with an earnings ESP of +1.55% and a Zacks Rank #1.
Allegiant Travel Company ALGT with an earnings ESP of +0.64% and a Zacks Rank #3.
Spirit Airlines SAVE with an earnings ESP of +2.5% and a Zacks Rank #3.
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
ALASKA AIR GRP (ALK): 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.
|
Stocks to Consider Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL with an earnings ESP of +1.55% and a Zacks Rank #1. Click to get this free report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report ALASKA AIR GRP (ALK): 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. Factors Likely to Influence this Quarter Declining fuel prices continue to boost profits for the overall airline industry.
|
Stocks to Consider Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL with an earnings ESP of +1.55% and a Zacks Rank #1. Click to get this free report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report ALASKA AIR GRP (ALK): 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 ESP: Alaska Air's earnings ESP is 0.00%.
|
Stocks to Consider Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL with an earnings ESP of +1.55% and a Zacks Rank #1. Click to get this free report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report ALASKA AIR GRP (ALK): 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. 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 negative estimate revisions.
|
Stocks to Consider Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL with an earnings ESP of +1.55% and a Zacks Rank #1. Click to get this free report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report ALASKA AIR GRP (ALK): 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 ESP: Alaska Air's earnings ESP is 0.00%.
|
8117.0
|
2016-01-19 00:00:00 UTC
|
American Airlines Group Stock: 3 Reasons Why AAL Is a Top Choice for Value Investors
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-group-stock%3A-3-reasons-why-aal-is-a-top-choice-for-value-investors-2016
|
nan
|
nan
|
Many investors like to look for value in stocks, but this can be very tough to define. There is great debate regarding which metrics are the best to focus on in this regard, and which are not really quality indicators of future performance. Fortunately, with our new style score system we have identified the key statistics to pay close attention to and thus which stocks might be the best for value investors in the near term.
This method discovered several great candidates for value-oriented investors, but today let's focus on American Airlines Group Inc.AAL as this stock is looking especially impressive right now. And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for AAL's status as a solid value stock below:
Price to Forward Sales for American Airlines Group
One of the most underrated ratios for value investors is the price/forward sales metric. This ratio shows investors how much they are paying for each dollar of revenues generated. In other words, a lower number is better here while a price to sales ratio of 1 means that you are paying one dollar for each dollar in sales.
With a P/S ratio of 0.62, AAL investors are paying 62 cents in stock price for each dollar of revenue generated by the company. Compare this to the industry average of 66 cents, and it is safe to say that AAL is undervalued compared to many of its peers on this important metric.
Forward PE for American Airlines Group
Easily one of the most popular readings for value investors, the forward PE ratio shows us the current price of a stock divided by the full year earnings. Generally speaking, value investors like to see this ratio below 20, though it can vary by industry.
Right now, AAL has a forward PE of just 5.80, which means that investors are paying $5.80 for each dollar in expected American Airlines Group earnings this year. Compared to the industry at large this is pretty favorable as the overall space has an average PE of 8.71 in comparison.
AAL Earnings Estimate Revisions Moving in the Right Direction
The solid value ratios outlined in the preceding paragraphs might be enough for some investors, but we should also note that the earnings estimate revisions have been trending in a positive direction as well. Analysts who follow AAL stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for American Airlines Group now.
Over the past 30 days 5 earnings estimate have gone higher compared to 1 lower for the full year. These revisions have helped to boost the consensus estimate as 30 days ago AAL was expected to post earnings of $9.02 per share for the full year though today it looks to have EPS of $9.05 for the full year.
Bottom Line
For the reasons detailed above, investors shouldn't be surprised to read that we have AAL as a stock with a Value Score of 'A' and a Zacks Rank #1 (Strong Buy). So if you are a value investor, definitely keep AAL on your short list as this looks be a stock that is very well-positioned for gains in the near term.
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.
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.
|
Analysts who follow AAL stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for American Airlines Group now. Bottom Line For the reasons detailed above, investors shouldn't be surprised to read that we have AAL as a stock with a Value Score of 'A' and a Zacks Rank #1 (Strong Buy). This method discovered several great candidates for value-oriented investors, but today let's focus on American Airlines Group Inc.AAL as this stock is looking especially impressive right now.
|
And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for AAL's status as a solid value stock below: Price to Forward Sales for American Airlines Group One of the most underrated ratios for value investors is the price/forward sales metric. With a P/S ratio of 0.62, AAL investors are paying 62 cents in stock price for each dollar of revenue generated by the company. Right now, AAL has a forward PE of just 5.80, which means that investors are paying $5.80 for each dollar in expected American Airlines Group earnings this year.
|
And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for AAL's status as a solid value stock below: Price to Forward Sales for American Airlines Group One of the most underrated ratios for value investors is the price/forward sales metric. Right now, AAL has a forward PE of just 5.80, which means that investors are paying $5.80 for each dollar in expected American Airlines Group earnings this year. This method discovered several great candidates for value-oriented investors, but today let's focus on American Airlines Group Inc.AAL as this stock is looking especially impressive right now.
|
This method discovered several great candidates for value-oriented investors, but today let's focus on American Airlines Group Inc.AAL as this stock is looking especially impressive right now. Right now, AAL has a forward PE of just 5.80, which means that investors are paying $5.80 for each dollar in expected American Airlines Group earnings this year. And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for AAL's status as a solid value stock below: Price to Forward Sales for American Airlines Group One of the most underrated ratios for value investors is the price/forward sales metric.
|
8118.0
|
2016-01-19 00:00:00 UTC
|
Delta Air Lines, Inc. Earnings: Profit Soars Again
|
AAL
|
https://www.nasdaq.com/articles/delta-air-lines-inc-earnings-profit-soars-again-2016-01-19
|
nan
|
nan
|
On Tuesday morning, global airline giant Delta Air Lines reported yet another quarter of strong earnings growth. Adjusted pre-tax income jumped 42% year over year, thanks to the sharp drop in fuel prices since 2014.
Delta's profit is flying higher. Photo: The Motley Fool
The revenue environment remains shaky for Delta and its peers American Airlines and United Continental , due to the strong dollar and economic slowdowns in some parts of the world. However, Delta's massive fuel cost savings will continue to outweigh its modest unit revenue declines. This sets the company up for yet another year of record earnings in 2016.
Delta's earnings by the numbers
In Q4, Delta's revenue declined 1.5% year over year to $9.50 billion. This missed the average analyst estimate of $9.61 billion by about 1%.
Adjusted earnings per share reached $1.18. That was up more than 50% from a year earlier, even after Delta incurred a $60 million cost to settle some of its 2016 hedges early and a $75 million write-off for its remaining Venezuelan currency holdings. Analysts had been expecting EPS of $1.19.
Looking at revenue and costs
Delta's 1.6% decline in passenger unit revenue was a lot better than the 2.5%-4.5% decline that it had projected at the beginning of the quarter. This shows that Delta's strategy to boost unit revenue by cutting capacity in weak international markets is working.
The improvement was most dramatic in the Pacific region, where Delta slashed its capacity by 11.4% year over year. Unit revenue declined 2.9%, compared to a 9.3% drop in the previous quarter, when capacity was down only 3.7%.
Delta's unit revenue trend also improved on transatlantic routes, where it moved from 4.3% capacity growth in Q3 to a 1.3% capacity reduction in Q4. The Latin America region posted the worst unit revenue trend, which wasn't surprising, because it also had the smallest capacity cutbacks.
Delta's fleet renewal efforts helped keep unit cost growth in check. Photo: Delta Air Lines
On the cost side, non-fuel unit costs rose 1.9% year over year before the impact of profit sharing. Wage increases were mostly offset by savings from Delta's efforts to replace its least efficient planes and add seats to many of the older planes remaining in its fleet.
On the other hand, Delta's adjusted fuel expense declined by more than $700 million year over year. The company paid $1.85 per gallon last quarter, including hedging losses and refinery gains, compared to $2.62 per gallon in Q4 2014.
Looking ahead
Delta expects to report a 2.5%-4.5% passenger unit revenue decline for Q1. The sequential decline may be related to the growing signs of economic weakness around the world. The sharp drop in oil prices in the past three months will also drive fuel surcharges down again.
On the other hand, Delta's initial guidance for Q4 also called for a 2.5%-4.5% passenger unit revenue decline, and the company ultimately outperformed that forecast.
Delta will get a massive fuel windfall to offset its unit revenue declines and wage increases. Delta paid $2.93 per gallon for fuel a year ago due to steep hedging losses; by contrast, it expects to pay just $1.20-$1.25 per gallon this quarter. As a result, EPS could as much as triple in Q1.
American Airlines and United Continental will also see ample fuel cost savings, but not on the same scale as Delta. Meanwhile, both companies have been posting inferior unit revenue results compared to Delta in recent quarters. Unless American and United can avoid the incremental revenue pressure that Delta is facing -- which seems unlikely -- they will post comparatively modest EPS growth in Q1.
On the other hand, unit revenue comparisons will get a lot easier for all three legacy carriers by Q2. This could drive a sharp improvement in the unit revenue trend for Delta Air Lines, American Airlines, and United Continental -- which might be the signal for the next big rally in airline stocks.
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. Earnings: Profit Soars Again 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.
|
On Tuesday morning, global airline giant Delta Air Lines reported yet another quarter of strong earnings growth. Photo: The Motley Fool The revenue environment remains shaky for Delta and its peers American Airlines and United Continental , due to the strong dollar and economic slowdowns in some parts of the world. Unless American and United can avoid the incremental revenue pressure that Delta is facing -- which seems unlikely -- they will post comparatively modest EPS growth in Q1.
|
Photo: The Motley Fool The revenue environment remains shaky for Delta and its peers American Airlines and United Continental , due to the strong dollar and economic slowdowns in some parts of the world. This could drive a sharp improvement in the unit revenue trend for Delta Air Lines, American Airlines, and United Continental -- which might be the signal for the next big rally in airline stocks. 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 earnings by the numbers In Q4, Delta's revenue declined 1.5% year over year to $9.50 billion. Looking at revenue and costs Delta's 1.6% decline in passenger unit revenue was a lot better than the 2.5%-4.5% decline that it had projected at the beginning of the quarter. This could drive a sharp improvement in the unit revenue trend for Delta Air Lines, American Airlines, and United Continental -- which might be the signal for the next big rally in airline stocks.
|
Delta's earnings by the numbers In Q4, Delta's revenue declined 1.5% year over year to $9.50 billion. Photo: Delta Air Lines On the cost side, non-fuel unit costs rose 1.9% year over year before the impact of profit sharing. On the other hand, Delta's adjusted fuel expense declined by more than $700 million year over year.
|
8119.0
|
2016-01-19 00:00:00 UTC
|
Southwest Airlines' (LUV) Q4 Earnings: Surprise in Store?
|
AAL
|
https://www.nasdaq.com/articles/southwest-airlines-luv-q4-earnings%3A-surprise-in-store-2016-01-19
|
nan
|
nan
|
Low cost carrier Southwest Airlines Co.LUV is scheduled to report fourth-quarter 2015 financial numbers on Jan 21, before the opening bell.
Last quarter, Southwest Airlines recorded a 2.17% positive earnings surprise. Let's see how things are shaping up ahead of this announcement.
Factors Likely to Influence this Quarter
The persistent decline in oil prices will continue to generate profit for Southwest Airlines. Moreover, rising travel demand during the festive season coupled with the carrier's plan to launch 10 new domestic as well as international routes will likely boost passenger revenues. In addition, launch of value-added services and the successful integration of AirTran Airways will bolster bottom-line growth for the company.
Earnings Whispers
Our proven model does not conclusively show that Southwest Airlines 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 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Southwest Airlines has an earnings ESP of -1.11%. This is because the Most Accurate estimate stands at 89 cents while the Zacks Consensus Estimate is pegged higher at 90 cents.
Zacks Rank: Southwest Airlines has a Zacks Rank #1 which increases the predictive power of ESP. However, the company's negative ESP makes surprise prediction difficult.
Meanwhile, 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 negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
American Airlines Group Inc. AAL with an earnings ESP of +1.55% and a Zacks Rank #1.
Allegiant Travel Company ALGT with an earnings ESP of +0.64% and a Zacks Rank #3.
Spirit Airlines SAVE with an earnings ESP of +2.5% and a Zacks Rank #3.
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
ALLEGIANT TRAVL (ALGT): 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.
|
Stocks to Consider Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL with an earnings ESP of +1.55% and a Zacks Rank #1. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): 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 Southwest Airlines Co.LUV is scheduled to report fourth-quarter 2015 financial numbers on Jan 21, before the opening bell.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): 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. Stocks to Consider Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL with an earnings ESP of +1.55% and a Zacks Rank #1. Allegiant Travel Company ALGT with an earnings ESP of +0.64% and a Zacks Rank #3.
|
Stocks to Consider Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL with an earnings ESP of +1.55% and a Zacks Rank #1. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): 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 Rank: Southwest Airlines has a Zacks Rank #1 which increases the predictive power of ESP.
|
Stocks to Consider Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter: American Airlines Group Inc. AAL with an earnings ESP of +1.55% and a Zacks Rank #1. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): 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. Last quarter, Southwest Airlines recorded a 2.17% positive earnings surprise.
|
8120.0
|
2016-01-19 00:00:00 UTC
|
Why Hawaiian Holdings (HA) is a Stock to Keep on Your Radar
|
AAL
|
https://www.nasdaq.com/articles/why-hawaiian-holdings-ha-stock-keep-your-radar-2016-01-19
|
nan
|
nan
|
Image: Hawaiian Airlines
Headquartered in Honolulu, Hawaii, Hawaiian Holdings HA is the holding company of Hawaii's largest airline, Hawaiian Airlines. The airline operates its main hub at Honolulu International Airport and a secondary hub at Kahului Airport on the island of Maui.
Hawaiian Airlines was founded in 1929, operating under the name Inter-Island Airways and providing short sightseeing flights between the eight Hawaiian Islands. Today, the company transports mail, cargo, and passengers, and has daily service routes between Hawaii and prominent Western cities Las Vegas, Los Angeles, San Francisco, Seattle, and Portland, among others.
Let's take a look at why you should keep Hawaiian Holdings on your investing radar.
Impressive Zacks Rank
Currently, Hawaiian Holdings is sitting confidently at a Zacks Rank #1 (Strong Buy), prompted by recent positive earnings estimate revisions. Over the past 30 days, current quarter estimates have risen from $0.80 to $0.85 per share, while current year estimates have risen from $3.05 to $3.09. Next quarter estimates have risen as well, increasing from $0.56 to $0.63 in the same time period.
Investors should take note that Hawaiian Holdings' industry, Transportation-Airline, is number 17 out of 265 total industries ranked on the Zacks Industry Rank, falling in the top 6%. This shows great standing at the beginning of a somewhat unpredictable new year, especially in comparison with other industries out there.
Strong Zacks Style Scores
In addition to a Strong Buy ranking, Hawaiian Holdings' Zacks Style Scores are quite notable.
Growth
Boasting an 'A' in this category, the company is seeing current cash flow growth of 47.96% and projected EPS growth of 19.18%. Its year-over-year (YoY) growth estimate for the current quarter is an astounding 113%, while its YoY growth estimate for the current year is 99.14% in the green.
Value
With a score of an 'A,' Hawaiian Holdings has fantastic value scores. Its Price to Cash Flow (P/CF) ratio is 8.27, with a Price to Earnings (P/E) ratio of 8.51 and a Price to Sales (P/S) ratio of 0.72.
Momentum
Like its Growth and Value scores, Hawaiian Holdings has an 'A' ranking in the Momentum category. Compared to its industry, the airline company is excelling, with both a positive 52 week price change of 28.91% and daily price change of 4.87%.
Future Performance
During its fiscal 2015 third quarter, Hawaiian Holdings reported an earnings beat, surpassing the Zacks Consensus by $0.10, and is hoping to do the same for its upcoming fourth quarter report. The airline has benefitted from low fuel prices and strong demand in each of their primary geographical locations; a strong U.S. dollar has also helped boost its financial standings.
If the price of oil continues to drop, Hawaiian Holdings has the potential to save even more in fuel costs, allowing the airline the chance to revamp its aircraft. Since the Hawaiian Islands market is becoming increasingly crowded, the company will need to stand out; the airline has since partnered with Optimares, an Italian manufacturer, to design seats that will lie completely flat, adding a touch of luxury to its A330 aircraft.
Bottom Line
Hawaiian Holdings faces some serious competition in its industry, with big names like American Airlines AAL and Southwest Airlines LUV also holding the #1 (Strong Buy) rank on the Zacks Rank. Hawaiian Holdings needs to continue its impressive earnings beats and capitalize on the drop in fuel costs. Right now, HA is an incredible growth, value, and momentum stock to add to your portfolio, and one that should not be overlooked.
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
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.
|
Bottom Line Hawaiian Holdings faces some serious competition in its industry, with big names like American Airlines AAL and Southwest Airlines LUV also holding the #1 (Strong Buy) rank on the Zacks Rank. Click to get this free report SOUTHWEST AIR (LUV): 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, the company transports mail, cargo, and passengers, and has daily service routes between Hawaii and prominent Western cities Las Vegas, Los Angeles, San Francisco, Seattle, and Portland, among others.
|
Click to get this free report SOUTHWEST AIR (LUV): 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. Bottom Line Hawaiian Holdings faces some serious competition in its industry, with big names like American Airlines AAL and Southwest Airlines LUV also holding the #1 (Strong Buy) rank on the Zacks Rank. Image: Hawaiian Airlines Headquartered in Honolulu, Hawaii, Hawaiian Holdings HA is the holding company of Hawaii's largest airline, Hawaiian Airlines.
|
Bottom Line Hawaiian Holdings faces some serious competition in its industry, with big names like American Airlines AAL and Southwest Airlines LUV also holding the #1 (Strong Buy) rank on the Zacks Rank. Click to get this free report SOUTHWEST AIR (LUV): 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. Image: Hawaiian Airlines Headquartered in Honolulu, Hawaii, Hawaiian Holdings HA is the holding company of Hawaii's largest airline, Hawaiian Airlines.
|
Bottom Line Hawaiian Holdings faces some serious competition in its industry, with big names like American Airlines AAL and Southwest Airlines LUV also holding the #1 (Strong Buy) rank on the Zacks Rank. Click to get this free report SOUTHWEST AIR (LUV): 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. Investors should take note that Hawaiian Holdings' industry, Transportation-Airline, is number 17 out of 265 total industries ranked on the Zacks Industry Rank, falling in the top 6%.
|
8121.0
|
2016-01-18 00:00:00 UTC
|
Will Southwest Airlines Raise Its Dividend in 2016?
|
AAL
|
https://www.nasdaq.com/articles/will-southwest-airlines-raise-its-dividend-2016-2016-01-18
|
nan
|
nan
|
LUV Dividend data by YCharts
There are several reasons for the recent acceleration in Southwest's dividend growth. First, consolidation in the industry has helped Southwest boost its profitability. With American having merged with US Airways, Delta with Northwest, and United with Continental, Southwest hasn't had to worry about as many players sabotaging industrywide fare increases. Falling industrywide capacity has also helped support Southwest's pricing power.
In addition, the plunge in fuel costs has benefited Southwest. The airline hasn't reaped all of the gains from falling energy prices because it had hedged its needs for future years before the drop. Nevertheless, Southwest isn't fully hedged, and its earnings have risen dramatically over the past year because of the favorable environment.
Will Southwest keep its dividends moving up?
What shareholders have to understand is that Southwest Airlines has plenty of demands on its capital. The company has recently expanded its route map to serve numerous destinations in Mexico, Central America, and the Caribbean, and it has spent money to expand domestic hubs that provide international services to handle increased demand. Southwest has also traditionally used stock buybacks to supplement its dividend payments.
Southwest only pays out about 10% of its earnings in the form of dividends, and so it would take a major change in the airline's internal dividend-payment policies to result in a marked boost in its payouts going forward. Nevertheless, Southwest has established a streak of dividend increases that it usually makes every spring. Investors can expect at least a token increase in 2016, but expecting Southwest's yield to climb well above that of Delta or other airline companies will likely be futile.
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 Will Southwest Airlines Raise Its Dividend in 2016? 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.
|
With American having merged with US Airways, Delta with Northwest, and United with Continental, Southwest hasn't had to worry about as many players sabotaging industrywide fare increases. Nevertheless, Southwest isn't fully hedged, and its earnings have risen dramatically over the past year because of the favorable environment. Southwest only pays out about 10% of its earnings in the form of dividends, and so it would take a major change in the airline's internal dividend-payment policies to result in a marked boost in its payouts going forward.
|
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Falling industrywide capacity has also helped support Southwest's pricing power.
|
LUV Dividend data by YCharts There are several reasons for the recent acceleration in Southwest's dividend growth. Southwest only pays out about 10% of its earnings in the form of dividends, and so it would take a major change in the airline's internal dividend-payment policies to result in a marked boost in its payouts going forward. Investors can expect at least a token increase in 2016, but expecting Southwest's yield to climb well above that of Delta or other airline companies will likely be futile.
|
The airline hasn't reaped all of the gains from falling energy prices because it had hedged its needs for future years before the drop. Southwest has also traditionally used stock buybacks to supplement its dividend payments. Southwest only pays out about 10% of its earnings in the form of dividends, and so it would take a major change in the airline's internal dividend-payment policies to result in a marked boost in its payouts going forward.
|
8122.0
|
2016-01-18 00:00:00 UTC
|
Will Unfavorable Currency Hit Amphenol (APH) Q4 Earnings?
|
AAL
|
https://www.nasdaq.com/articles/will-unfavorable-currency-hit-amphenol-aph-q4-earnings-2016-01-18
|
nan
|
nan
|
Diversified electronics manufacturer Amphenol CorporationAPH is scheduled to report fourth-quarter 2015 results before the opening bell on Jan 20. In the last reported quarter, Amphenol's adjusted earnings matched the Zacks Consensus Estimate. Let's have a look at how things are shaping up for the upcoming fourth-quarter results.
Key Factors in the Fourth Quarter
Amphenol conducts businesses in major foreign currencies due to its worldwide operations. Non-U.S. markets usually account for the lion's share of net sales. With plummeting oil prices and fears of a global economic slowdown amid heightened tensions in the Middle East, unfavorable movement in foreign currency exchange rates is expected to adversely impact sales during the quarter.
In addition, the majority of the company's revenues come from sales to the communications industry, demand for which is subject to rapid technological change. Furthermore, these markets are dominated by several large manufacturers and operators who exert significant pricing pressure on Amphenol. As the overall industry faces increased market consolidation, Amphenol's margins are likely to shrink with higher R&D expenses. Volatility in raw material prices is also likely to be an additional drag on its profitability.
However, Amphenol's expanding presence in the fast growing commercial aerospace market is encouraging. The company is well positioned to capitalize on the proliferation of electronics content on next-generation aircraft. These advanced electronic systems also require higher technology interconnect solutions to enhance fuel efficiency and improve passenger experience, all of which create excellent opportunities for Amphenol.
Earnings Whispers
Our proven model does not conclusively show that Amphenol 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 the Zacks Consensus Estimate, is currently pegged at -3.39%.
Zacks Rank: Amphenol's Zacks Rank #4 (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 +1.55% and a Zacks Rank #2.
Alaska Air Group, Inc. ALK , earnings ESP of +0.70% and a Zacks Rank #1.
Booz Allen Hamilton Holding Corporation BAH , earnings ESP of +2.44% 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
ALASKA AIR GRP (ALK): Free Stock Analysis Report
AMPHENOL CORP-A (APH): Free Stock Analysis Report
BOOZ ALLEN HMLT (BAH): 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 +1.55% and a Zacks Rank #2. Click to get this free report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMPHENOL CORP-A (APH): Free Stock Analysis Report BOOZ ALLEN HMLT (BAH): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Key Factors in the Fourth Quarter Amphenol conducts businesses in major foreign currencies due to its worldwide operations.
|
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 +1.55% and a Zacks Rank #2. Click to get this free report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMPHENOL CORP-A (APH): Free Stock Analysis Report BOOZ ALLEN HMLT (BAH): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Rank: Amphenol's Zacks Rank #4 (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 +1.55% and a Zacks Rank #2. Click to get this free report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMPHENOL CORP-A (APH): Free Stock Analysis Report BOOZ ALLEN HMLT (BAH): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Rank: Amphenol's Zacks Rank #4 (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 +1.55% and a Zacks Rank #2. Click to get this free report ALASKA AIR GRP (ALK): Free Stock Analysis Report AMPHENOL CORP-A (APH): Free Stock Analysis Report BOOZ ALLEN HMLT (BAH): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Rank: Amphenol's Zacks Rank #4 (Sell) when combined with a negative ESP makes an earnings beat unlikely this quarter.
|
8123.0
|
2016-01-18 00:00:00 UTC
|
Will Canadian Pacific Railway (CP) Q4 Earnings Disappoint?
|
AAL
|
https://www.nasdaq.com/articles/will-canadian-pacific-railway-cp-q4-earnings-disappoint-2016-01-18
|
nan
|
nan
|
Canadian Pacific Railway LimitedCP is set to release its fourth-quarter 2015 results before the opening bell on Jan 21.
Last quarter, the company posted a positive 1.48% earnings surprise. Overall, the company recorded positive earnings surprises in three quarters last year, with an average beat of 1.14%. Let's see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Softness in the coal business continues to impact revenues for all railroad operators. In addition, declining fuel prices is a major blow as it brings down the fuel surcharge for rail companies, thereby affecting revenue. To add to the negatives, failed merger talks with Norfolk Southern Corp. is another blow to the Canadian carrier.
Earnings Whispers
Our proven model does not conclusively show that Canadian Pacific Railway is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or at least 3 for this to happen. That is not the case here, as you will see below.
Zacks ESP: The Earnings ESP for the company currently stands at -2.44%, as the Most Accurate Estimate is pegged at $2.00 while the Zacks Consensus Estimate is higher at $2.05.
Zacks Rank: Canadian Pacific Railway carries a Zacks Rank #5 (Strong Sell).
We caution investors against the stock going into the earnings announcement, as a Zacks Earnings ESP of -2.44% combined with a Zacks Rank #5 lowers the possibility of an earnings surprise.
Stocks to Consider
Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.
American Airlines Group Inc. AAL with an earnings ESP of +1.55% and a Zacks Rank #2 (Buy).
Alaska Air Group, Inc. ALK with an earnings ESP of +0.7% and a Zacks Rank #1 (Strong Buy).
Spirit Airlines SAVE with an earnings ESP of +2.5% 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
ALASKA AIR GRP (ALK): Free Stock Analysis Report
CDN PAC RLWY (CP): 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.
|
American Airlines Group Inc. AAL with an earnings ESP of +1.55% and a Zacks Rank #2 (Buy). Click to get this free report ALASKA AIR GRP (ALK): Free Stock Analysis Report CDN PAC RLWY (CP): 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. Canadian Pacific Railway LimitedCP is set to release its fourth-quarter 2015 results before the opening bell on Jan 21.
|
Click to get this free report ALASKA AIR GRP (ALK): Free Stock Analysis Report CDN PAC RLWY (CP): 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. American Airlines Group Inc. AAL with an earnings ESP of +1.55% and a Zacks Rank #2 (Buy). Zacks Rank: Canadian Pacific Railway carries a Zacks Rank #5 (Strong Sell).
|
Click to get this free report ALASKA AIR GRP (ALK): Free Stock Analysis Report CDN PAC RLWY (CP): 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. American Airlines Group Inc. AAL with an earnings ESP of +1.55% and a Zacks Rank #2 (Buy). Zacks ESP: The Earnings ESP for the company currently stands at -2.44%, as the Most Accurate Estimate is pegged at $2.00 while the Zacks Consensus Estimate is higher at $2.05.
|
American Airlines Group Inc. AAL with an earnings ESP of +1.55% and a Zacks Rank #2 (Buy). Click to get this free report ALASKA AIR GRP (ALK): Free Stock Analysis Report CDN PAC RLWY (CP): 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. We caution investors against the stock going into the earnings announcement, as a Zacks Earnings ESP of -2.44% combined with a Zacks Rank #5 lowers the possibility of an earnings surprise.
|
8124.0
|
2016-01-16 00:00:00 UTC
|
Will Delta Air Lines, Inc. Raise Its Dividend in 2016?
|
AAL
|
https://www.nasdaq.com/articles/will-delta-air-lines-inc-raise-its-dividend-2016-2016-01-16
|
nan
|
nan
|
DAL Dividend data by YCharts
Some have been hopeful that Delta will be able to share some of its savings from falling fuel costs with its shareholders by raising dividends in the future. Delta has had to deal with a substantial hit from the fuel-hedging programs it had in place, but even with those charges, the airline has seen its cash flow improve since the plunge in fuel prices.
Yet the key thing to understand about Delta is that it has many competing ways that it wants to spend its cash. The company announced a new $5 billion stock buyback program last May, and it has been moving aggressively to implement that plan and make share repurchases. Delta also has an underfunded pension to which it expects to make regular contributions to catch up with its obligations, and it expects to spend roughly $2.5 billion to $3 billion annually to replace aircraft and implement other major capital-spending programs.
Can Delta's dividends fly higher?
There's no question that if Delta wanted to boost its dividend, it could. The company only pays out about 12% of its earnings to shareholders through dividends. Yet given how much experience airline investors have with the cyclical booms and busts in the industry, shareholders haven't clamored for the long-term commitment that a big dividend increase implies. Instead, they've seemed quite content with buybacks that have helped push share prices sharply higher in recent years.
Delta will probably continue its streak of raising its dividend annually in 2016, with the timing likely to come in the second half of the year to be consistent with its recent past practice. Nevertheless, investors shouldn't expect Delta's dividend yield to increase dramatically, and the airline will likely continue to make other uses of cash more of a priority item 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 Will Delta Air Lines, Inc. Raise Its Dividend in 2016? 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.
|
Delta has had to deal with a substantial hit from the fuel-hedging programs it had in place, but even with those charges, the airline has seen its cash flow improve since the plunge in fuel prices. Yet given how much experience airline investors have with the cyclical booms and busts in the industry, shareholders haven't clamored for the long-term commitment that a big dividend increase implies. Nevertheless, investors shouldn't expect Delta's dividend yield to increase dramatically, and the airline will likely continue to make other uses of cash more of a priority item going forward.
|
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Nevertheless, investors shouldn't expect Delta's dividend yield to increase dramatically, and the airline will likely continue to make other uses of cash more of a priority item going forward.
|
DAL Dividend data by YCharts Some have been hopeful that Delta will be able to share some of its savings from falling fuel costs with its shareholders by raising dividends in the future. Delta also has an underfunded pension to which it expects to make regular contributions to catch up with its obligations, and it expects to spend roughly $2.5 billion to $3 billion annually to replace aircraft and implement other major capital-spending programs. Nevertheless, investors shouldn't expect Delta's dividend yield to increase dramatically, and the airline will likely continue to make other uses of cash more of a priority item going forward.
|
Can Delta's dividends fly higher? The company only pays out about 12% of its earnings to shareholders through dividends. Nevertheless, investors shouldn't expect Delta's dividend yield to increase dramatically, and the airline will likely continue to make other uses of cash more of a priority item going forward.
|
8125.0
|
2016-01-15 00:00:00 UTC
|
JetBlue (JBLU): Power Failure Causes Flight Disruption
|
AAL
|
https://www.nasdaq.com/articles/jetblue-jblu%3A-power-failure-causes-flight-disruption-2016-01-15
|
nan
|
nan
|
Low-cost carrier JetBlue Airways Corp.JBLU recently encountered service disruption for nearly two hours after its website shut down owing to power failure.
As per the flight tracking website FlightAware.com, nearly four flights were cancelled and 36 were delayed following the outage. Shortly after the technical collapse, bookings and check-in facilities had been restored. Moreover, the carrier assured that its cyber security has not been compromised.
The widespread disruption was caused by power failure at a data center operated by JetBlue's partner Verizon Communications Inc.
Technical glitches are becoming a growing concern for carriers, often resulting in passenger harassment and messed up schedules. In Oct 2015, nearly 450 out of the 3600 flights of Southwest Airlines Co. LUV were postponed due to a similar software malfunction.
Further, legacy carriers like American Airlines Group Inc. AAL and United Continental Holdings Inc. UAL have also faced such crises last year owing to technical issues.
Coming to air traffic data, JetBlue witnessed a significant improvement in the month of December, 2015. Traffic - measured in revenue passenger miles (RPMs) - came in at 3.79 billion, up 11.3% from 3.41 billion recorded a year ago.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) increased 9.5% to 4.58 billion. Moreover, the load factor or percentage of seats filled by passengers increased to 83% from 81.6% in Dec 2014.
At the end of 2015, JetBlue generated RPMs of 41.71 billion (up 10.3% year over year) and ASMs of 49.25 billion (up 9.5%). Further, the load factor grew 70 basis points year over year to 84.7%.
JetBlue 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
JETBLUE AIRWAYS (JBLU): 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.
|
Further, legacy carriers like American Airlines Group Inc. AAL and United Continental Holdings Inc. UAL have also faced such crises last year owing to technical issues. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): 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. Low-cost carrier JetBlue Airways Corp.JBLU recently encountered service disruption for nearly two hours after its website shut down owing to power failure.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): 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. Further, legacy carriers like American Airlines Group Inc. AAL and United Continental Holdings Inc. UAL have also faced such crises last year owing to technical issues. 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?
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): 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. Further, legacy carriers like American Airlines Group Inc. AAL and United Continental Holdings Inc. UAL have also faced such crises last year owing to technical issues. The widespread disruption was caused by power failure at a data center operated by JetBlue's partner Verizon Communications Inc. Technical glitches are becoming a growing concern for carriers, often resulting in passenger harassment and messed up schedules.
|
Further, legacy carriers like American Airlines Group Inc. AAL and United Continental Holdings Inc. UAL have also faced such crises last year owing to technical issues. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): 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. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) increased 9.5% to 4.58 billion.
|
8126.0
|
2016-01-15 00:00:00 UTC
|
Expect More Buybacks at American Airlines Group, Inc.
|
AAL
|
https://www.nasdaq.com/articles/expect-more-buybacks-american-airlines-group-inc-2016-01-15
|
nan
|
nan
|
During 2015, American Airlines spent enormous sums of money on share repurchases. With interest rates at extremely low levels and American Airlines stock trading for 6 to 7 times earnings for most of the year, management reasoned that it was a great time to buy back stock.
By contrast, Delta Air Lines has been much more circumspect about buybacks, despite producing far more free cash flow than American Airlines. Its stock price significantly outperformed American's in 2015.
American Airlines vs. Delta Air Lines 2015 Stock Performance. Data by YCharts .
American Airlines appears likely to continue its massive buyback activity in 2016. But does the stock's underperformance in 2015 mean that it should be following Delta's lead and focusing more on debt reduction?
Becoming a buyback beast
As its stock price plunged during the spring and summer of 2015, American Airlines began repurchasing stock at a furious pace. In Q3, with the stock price at its lowest level of the year, management spent more than $1.5 billion on buybacks.
American Airlines Shares Outstanding . Data by YCharts .
The heavy buyback activity continued in Q4. American Airlines recently revealed that it spent $1.1 billion to repurchase 25.6 million shares last quarter. For all of 2015, it spent $3.58 billion and repurchased 85.1 million shares -- more than 12% of its share count.
Borrowing to fund buybacks
American Airlines has generated a sizable $6.8 billion in operating cash flow over its last four reported quarters. However, it incurred more than $6 billion in capital expenditures during 2015, due to its aggressive aircraft replacement program.
That left very little free cash flow to pay for share buybacks. Instead, American funded them by paying for most of its aircraft purchases with debt instead of cash. American Airlines CEO Doug Parker has been vocal about his belief that as long as the company can issue debt with a 4% or lower interest rate, it should take advantage of that opportunity.
Delta takes a different path
Delta Air Lines' management team has followed a very different philosophy. To be sure, Delta also returned a hefty sum of money to shareholders last year. Between dividends and buybacks, it spent $2.6 billion in 2015. However, Delta produced nearly $4 billion in free cash flow.
Delta has been careful to spend within its means. Image source: The Motley Fool.
In other words, Delta produced enough cash to cover its comparatively modest capital spending, pay for its dividends and buybacks, and still have some left over to reduce its net debt. That's a far cry from the situation at American Airlines.
The American Airlines strategy makes sense
As noted above, Delta Air Lines stock significantly outperformed American Airlines shares in 2015. However, that doesn't necessarily mean that its capital allocation strategy is better. Delta's stronger unit revenue performance probably had a bigger impact on the stock price divergence. Additionally, because Delta has a higher market cap, its buybacks provide less bang for the buck.
American Airlines stock is extremely cheap at about 6 times forward earnings. Chances are it won't stay that way forever. As long as interest rates remain low -- and they still are -- it makes sense to borrow money and buy back stock today and focus on debt reduction in 2018 and beyond, when free cash flow is likely to surge due to falling capex.
Low interest rates make debt-funded buybacks too lucrative to pass up. Image source: American Airlines.
Just this week, the company launched a $1.07 billion aircraft-backed debt offering at a blended interest rate just above 4%. Assuming market conditions remain favorable, it will probably execute another two debt offerings along these lines before the end of 2016.
American Airlines currently has $2.4 billion in outstanding share repurchase authorizations. But combining American's free cash flow, the aircraft debt it will raise, and some of its excess cash (it ended the year with $6.2 billion in unrestricted cash), the company will have the capacity to spend at least as much on share buybacks in 2016 as the $3.58 billion it spent in 2015.
That means American Airlines is likely to increase its buyback authorization in the next quarter or two. The continuation of its aggressive buyback strategy will keep its share count declining rapidly. As long as American can stabilize its unit revenue performance this year, the stock is likely to regain its momentum.
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 Expect More Buybacks at American Airlines Group, Inc. 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 CEO Doug Parker has been vocal about his belief that as long as the company can issue debt with a 4% or lower interest rate, it should take advantage of that opportunity. In other words, Delta produced enough cash to cover its comparatively modest capital spending, pay for its dividends and buybacks, and still have some left over to reduce its net debt. As long as interest rates remain low -- and they still are -- it makes sense to borrow money and buy back stock today and focus on debt reduction in 2018 and beyond, when free cash flow is likely to surge due to falling capex.
|
American Airlines vs. Delta Air Lines 2015 Stock Performance. The American Airlines strategy makes sense As noted above, Delta Air Lines stock significantly outperformed American Airlines shares in 2015. Adam Levine-Weinberg is long January 2017 $40 calls on Delta Air Lines, and long January 2017 $30 calls on American Airlines Group.
|
By contrast, Delta Air Lines has been much more circumspect about buybacks, despite producing far more free cash flow than American Airlines. The American Airlines strategy makes sense As noted above, Delta Air Lines stock significantly outperformed American Airlines shares in 2015. But combining American's free cash flow, the aircraft debt it will raise, and some of its excess cash (it ended the year with $6.2 billion in unrestricted cash), the company will have the capacity to spend at least as much on share buybacks in 2016 as the $3.58 billion it spent in 2015.
|
American Airlines vs. Delta Air Lines 2015 Stock Performance. As long as interest rates remain low -- and they still are -- it makes sense to borrow money and buy back stock today and focus on debt reduction in 2018 and beyond, when free cash flow is likely to surge due to falling capex. But combining American's free cash flow, the aircraft debt it will raise, and some of its excess cash (it ended the year with $6.2 billion in unrestricted cash), the company will have the capacity to spend at least as much on share buybacks in 2016 as the $3.58 billion it spent in 2015.
|
8127.0
|
2016-01-14 00:00:00 UTC
|
Allegiant Air Adds Routes Connecting New Orleans to Florida
|
AAL
|
https://www.nasdaq.com/articles/allegiant-air-adds-routes-connecting-new-orleans-to-florida-2016-01-14
|
nan
|
nan
|
Las Vegas-based Allegiant Travel CompanyALGT , the parent company of Allegiant Air, is constantly making efforts to expand its operations. The ultra low-cost carrier recently announced that it intends to start operations connecting two cities in Florida (Jacksonville and St. Petersburg-Clearwater) to New Orleans. The carrier stated that flights (non-stop) connecting New Orleans to the Jacksonville International Airport (JAX) will commence from Apr 14, 2016.
The carrier further announced that flights connecting the Louis Armstrong New Orleans International Airport and the St. Pete-Clearwater International Airport (PIE) will take to the skies from Jun 3, 2016. In a customer-friendly move, the budget carrier has kept the introductory one-way fares for the above routes at $39. To avail of the amazingly low prices, fliers were required to buy their tickets by Jan 13 for travel latest by Aug 16. The carrier already operates multiple routes to New Orleans. The addition of the new flights, which will operate twice a week, will allow travelers to fly to their favorite vacation spots at affordable costs.
The addition of the new routes is part of Allegiant Air's broader expansion drive whereby it had announced that it intends to operate nonstop flights on as many as 19 new routes, including three new cities, Washington D.C. / Baltimore; Destin, FL and El Paso, TX.
We note that discount carriers like Spirit Airlines SAVE and Frontier Airlines, apart from Allegiant, are grabbing headlines due to their constant addition of routes. The emergence and the subsequent growth and success of these low-cost carriers have made legacy carriers rather uneasy. Highlighting the threat posed by low-cost carriers, American Airlines Group AAL announced last year that it intends to offer exclusive low-priced air tickets later in 2016. We expect further updates on the progress of the low-cost carriers and the resultant response from big players in the field in the near future.
Zacks Rank
Allegiant Travel currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the airline space is Delta Air Lines DAL 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
DELTA AIR LINES (DAL): Free Stock Analysis Report
ALLEGIANT TRAVL (ALGT): 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.
|
Highlighting the threat posed by low-cost carriers, American Airlines Group AAL announced last year that it intends to offer exclusive low-priced air tickets later in 2016. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): 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 ultra low-cost carrier recently announced that it intends to start operations connecting two cities in Florida (Jacksonville and St. Petersburg-Clearwater) to New Orleans.
|
Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): 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. Highlighting the threat posed by low-cost carriers, American Airlines Group AAL announced last year that it intends to offer exclusive low-priced air tickets later in 2016. A better-ranked stock in the airline space is Delta Air Lines DAL sporting a Zacks Rank #1 (Strong Buy).
|
Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): 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. Highlighting the threat posed by low-cost carriers, American Airlines Group AAL announced last year that it intends to offer exclusive low-priced air tickets later in 2016. The addition of the new routes is part of Allegiant Air's broader expansion drive whereby it had announced that it intends to operate nonstop flights on as many as 19 new routes, including three new cities, Washington D.C. / Baltimore; Destin, FL and El Paso, TX.
|
Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): 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. Highlighting the threat posed by low-cost carriers, American Airlines Group AAL announced last year that it intends to offer exclusive low-priced air tickets later in 2016. The ultra low-cost carrier recently announced that it intends to start operations connecting two cities in Florida (Jacksonville and St. Petersburg-Clearwater) to New Orleans.
|
8128.0
|
2016-01-13 00:00:00 UTC
|
Delta Trumps United Continental, Earns 2nd Spot by Traffic
|
AAL
|
https://www.nasdaq.com/articles/delta-trumps-united-continental-earns-2nd-spot-by-traffic-2016-01-13
|
nan
|
nan
|
Delta Air Lines Inc.DAL surpassed United Continental Holdings Inc. UAL in terms of air traffic numbers in 2015, securing the second spot in the U.S. airline space. However, Delta is behind American Airlines Group Inc. AAL in the list.
Air traffic - measured in revenue passenger miles (RPMs) - is a key performing indicator in the airline industry and is calculated by multiplying the number of revenue-paying passengers on the flight by the distance traveled.
At the end of 2015, Delta generated RPMs of 209.6 billion (up 3.3% year over year) against United Continental's 208.6 billion (up 1.5% year over year) in the same period. However, the RPM count for 2015 was well below American Airlines' 223 billion (up 2.4% year over year).
Delta'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.
Apart from RPMs, Delta also reported an increase in onboard passenger count in 2015. Passenger count for Delta stood at 179.4 million compared with United Continental's 140.4 million. However, onboard passengers for American Airlines in the same year stood at 197.3 million which is well ahead of the other two legacy carriers.
In 2008, after its merger with Northwest Airlines, Delta moved to the top position in terms of air traffic count. However, United Continental managed to surpass Delta in 2010 after it tied up with Continental Airlines. In 2014 and 2015, American Airlines continued to maintain its lead, supported by its merger with U.S. Airways.
At present, American Airlines, Delta, United Continental and Southwest Airlines Co. LUV dominate nearly 80% of the U.S. airline space. Declining fuel prices has bolstered profits for U.S. airlines over the last two years.
This in turn has led to capacity expansion for most carriers, thereby not only intensifying competition among carriers but also affecting unit revenues. All four leading U.S. carriers have provided a soft unit revenue outlook for the upcoming fourth quarter of 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.
|
However, Delta is behind American Airlines Group Inc. AAL in the list. 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. Delta'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 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. However, Delta is behind American Airlines Group Inc. AAL in the list. Delta Air Lines Inc.DAL surpassed United Continental Holdings Inc. UAL in terms of air traffic numbers in 2015, securing the second spot in the U.S. airline space.
|
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. However, Delta is behind American Airlines Group Inc. AAL in the list. At the end of 2015, Delta generated RPMs of 209.6 billion (up 3.3% year over year) against United Continental's 208.6 billion (up 1.5% year over year) in the same period.
|
However, Delta is behind American Airlines Group Inc. AAL in the list. 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. Delta Air Lines Inc.DAL surpassed United Continental Holdings Inc. UAL in terms of air traffic numbers in 2015, securing the second spot in the U.S. airline space.
|
8129.0
|
2016-01-13 00:00:00 UTC
|
Why You Shouldn't Bet Against American Airlines Group (AAL) Stock
|
AAL
|
https://www.nasdaq.com/articles/why-you-shouldnt-bet-against-american-airlines-group-aal-stock-2016-01-13
|
nan
|
nan
|
One stock that might be an intriguing choice for investors right now is American Airlines Group Inc.AAL . This is because this security in the Airlines space is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective.
This is important because, often times, a rising tide will lift all boats in an industry, as there can be broad trends taking place in a segment that are boosting securities across the board. This is arguably taking place in the Transport Airlines space as it currently has a Zacks Industry Rank of 26 out of more than 250 industries, suggesting it is well-positioned from this perspective, especially when compared to other segments out there.
Meanwhile, American Airlines Group is actually looking pretty good on its own too. The firm has seen solid earnings estimate revision activity over the past month, suggesting analysts are becoming a bit more bullish on the firm's prospects in both the short and long term.
In fact, over the past month, current quarter estimates have risen from $1.89 per share to $1.90 per share, while current year estimates have risen from $8.98 per share to $9.02 per share. This has helped AAL to earn a Zacks Rank #2 (Buy), further underscoring the company's solid position.
So, if you are looking for a decent pick in a strong industry, consider American Airlines Group. Not only is its industry currently in the top third, but it is seeing solid estimate revisions as of late, suggesting it could be a very interesting choice for investors seeking a name in this great industry segment.
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.
|
One stock that might be an intriguing choice for investors right now is American Airlines Group Inc.AAL . This has helped AAL to earn a Zacks Rank #2 (Buy), further underscoring the company's solid position. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
One stock that might be an intriguing choice for investors right now is American Airlines Group Inc.AAL . This has helped AAL to earn a Zacks Rank #2 (Buy), further underscoring the company's solid position. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
One stock that might be an intriguing choice for investors right now is American Airlines Group Inc.AAL . This has helped AAL to earn a Zacks Rank #2 (Buy), further underscoring the company's solid position. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
One stock that might be an intriguing choice for investors right now is American Airlines Group Inc.AAL . This has helped AAL to earn a Zacks Rank #2 (Buy), further underscoring the company's solid position. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
8130.0
|
2016-01-13 00:00:00 UTC
|
United Airlines Adds Richmond, Hartford Flights from Denver
|
AAL
|
https://www.nasdaq.com/articles/united-airlines-adds-richmond-hartford-flights-from-denver-2016-01-13
|
nan
|
nan
|
As per a recent report by Denver Business Journal , United Airlines - the wholly owned subsidiary of United Continental Holdings Inc.UAL - plans to add non-stop flights from Denver International Airport to Richmond, VA and Hartford, CT.
Notably, United Airlines intends to offer one daily round-trip to both the destinations. The service is scheduled to start from Apr 5, 2016.
United Airlines will operate 76-seat Embraer E175 aircraft to Richmond which will depart at 9:55 a.m. and reach the destination at 3:07 p.m. Meanwhile, the returning flights will start from Richmond at 3:45 p.m. and arrive in Denver at 5:25 p.m.
Notably, with roughly 65,000 annual flyers traveling between the cities, Richmond presently is Denver's most unserved domestic market.
On the other hand, United Airlines will fly 128-seat Airbus A319 to Hartford's Bradley International Airport. Notably, the flights will depart from Denver at 3:43 p.m. and reach Hartford at 9:27 p.m. Meanwhile, returning flights are scheduled to leave Hartford at 8:04 a.m. and land in Denver at 10:23 a.m.
With this, United Airlines has now joined Southwest Airlines Co. LUV in providing non-stop flights to Hartford. Further, with the addition of Hartford, United Airlines will now offer non-stop service to all of Denver's top 50 domestic markets.
Notably, the new flights to Hartford and Richmond take United Airlines' tally of non-stop destinations from Denver to 125.
Recently, United Continental, while disclosing traffic numbers for Dec 2015, predicted a steeper decline in PRASM in the fourth quarter. The carrier now expects the metric to decline 5.75% to 6.25% on a consolidated basis (the earlier projection was pegged at a decline of 4% to 6%). The devastating terror attacks in Paris and persistently weak oil prices were the primary factors that resulted in the dismal PRASM outlook
Moreover, United Airlines continues to face stiff competition from American Airlines Group Inc. AAL and Delta Air Lines, Inc. DAL .
Nonetheless, we expect the new non-stop flights to somewhat enhance the company's competitive position, bolster its Denver hub and drive considerable top-line growth.
United Continental 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
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.
|
The devastating terror attacks in Paris and persistently weak oil prices were the primary factors that resulted in the dismal PRASM outlook Moreover, United Airlines continues to face stiff competition from American Airlines Group Inc. AAL and Delta Air Lines, Inc. DAL . 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. Notably, with roughly 65,000 annual flyers traveling between the cities, Richmond presently is Denver's most unserved domestic market.
|
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. The devastating terror attacks in Paris and persistently weak oil prices were the primary factors that resulted in the dismal PRASM outlook Moreover, United Airlines continues to face stiff competition from American Airlines Group Inc. AAL and Delta Air Lines, Inc. DAL . Further, with the addition of Hartford, United Airlines will now offer non-stop service to all of Denver's top 50 domestic markets.
|
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. The devastating terror attacks in Paris and persistently weak oil prices were the primary factors that resulted in the dismal PRASM outlook Moreover, United Airlines continues to face stiff competition from American Airlines Group Inc. AAL and Delta Air Lines, Inc. DAL . As per a recent report by Denver Business Journal , United Airlines - the wholly owned subsidiary of United Continental Holdings Inc.UAL - plans to add non-stop flights from Denver International Airport to Richmond, VA and Hartford, CT.
|
The devastating terror attacks in Paris and persistently weak oil prices were the primary factors that resulted in the dismal PRASM outlook Moreover, United Airlines continues to face stiff competition from American Airlines Group Inc. AAL and Delta Air Lines, Inc. DAL . 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. As per a recent report by Denver Business Journal , United Airlines - the wholly owned subsidiary of United Continental Holdings Inc.UAL - plans to add non-stop flights from Denver International Airport to Richmond, VA and Hartford, CT.
|
8131.0
|
2016-01-12 00:00:00 UTC
|
Delta Air Lines, Inc. Gets to Stay at Dallas Love Field
|
AAL
|
https://www.nasdaq.com/articles/delta-air-lines-inc-gets-stay-dallas-love-field-2016-01-12
|
nan
|
nan
|
Delta will be allowed to continue its five daily flights at Dallas Love Field. Photo: The Motley Fool
The unending battle between the airlines serving Dallas Love Field will go on for at least a little while longer. On Friday, a federal judge in Dallas issued a temporary injunction barring Southwest Airlines from evicting Delta Air Lines from Love Field, the closest airport to downtown Dallas.
Following the ruling, many industry observers praised the decision for supporting competition. After all, had Delta been evicted, Southwest would have been left with sole control of 90% of the airport's gates.
The reality is a little more complicated. Unless the federal restrictions that cap Love Field at 20 gates are removed, American Airlines will continue to dominate the Dallas air travel market.
Too much demand -- too little space
The current dispute arose after Delta and Southwest both failed to win the rights to use two Love Field gates given up by American Airlines as part of its merger settlement with the Department of Justice. The two rivals each wanted to expand at Love Field, which has become quite popular now that restrictions on long-haul flights have been lifted.
Instead, those two gates went to Virgin America . That left Delta stuck trying to share gates leased by United Continental , while Southwest was confined to 16 gates, preventing it from expanding beyond about 160 daily departures.
Southwest has tried to add as many flights as possible at Love Field. Photo: The Motley Fool
Southwest subsequently paid United $120 million to sublease its two gates and tried to evict Delta from sharing one of them. Meanwhile, it announced plans to expand its flight schedule to 180 daily departures.
Good intentions
In his ruling, U.S. District Court Judge Ed Kinkeade determined that Delta was likely to win a breach of contract claim against Southwest Airlines. He found that Southwest didn't have the right to sublease a gate that Delta was already using and then evict it. Naturally, Delta Air Lines applauded the ruling.
But there was more to Kinkeade's ruling than supporting Delta over Southwest. He argued more broadly that legislators need to undo the restrictions capping Love Field at just 20 gates. Indeed, that is the underlying source of all of the airport's issues.
However, the chances of achieving this aim are probably slim. The restrictions at Love Field protect the larger Dallas-Fort Worth International Airport (DFW) -- and more importantly, American Airlines, which operates its largest hub there. It took decades to lift the long-haul flight ban at Love Field, and restricting its gate capacity was key to forging that compromise.
American Airlines is the main beneficiary of Love Field's gate constraints. Photo: American Airlines.
Furthermore, it was obvious from the start that limiting Love Field's gate capacity would restrict competition. A decade-old DOJ memo raised the obvious antitrust issues posed by placing an artificial cap on the airport's capacity. The compromise went ahead because it was better than the alternative of doing nothing.
Avoiding one problem, creating others
Judge Kinkeade's ruling promotes competition in the narrow sense that Delta will get to continue operating its five daily flights between Love Field and Atlanta.
But the solution may be worse than the original problem. Southwest Airlines has already been scheduling 10 flights per day per gate in Dallas, which is generally considered the absolute maximum possible in the airline industry. (Six to eight daily departures per gate is more typical, even at busy airports.)
The additional five daily flights from Delta leave no margin for error in terms of gate scheduling. This means that bad weather or other issues can cause cascading delays or flight cancellations as planes get backed up waiting for gate space to become available.
Ultimately, if Southwest is forced to accommodate Delta going forward, it may have to pare back its Love Field flight schedule. That would be a big blow to competition, as Southwest is by far the most significant competitor to American Airlines, which operates more than 825 daily departures at DFW.
By contrast, Delta's five flights at Love Field are not very meaningful from a competition standpoint, as Delta also operates frequent flights from DFW to Atlanta. Unless Friday's ruling is overturned, American Airlines could be the big winner as Southwest's growth across town grinds to a halt.
3 companies poised to explode when cable dies
Cable is dying. And there are 3 stocks that are poised to explode when this faltering $2.2 trillion industry finally bites the dust. Just like newspaper publishers, telephone utilities, stockbrokers, record companies, bookstores, travel agencies, and big box retailers did when the Internet swept away their business models. And when cable falters, you don't want to miss out on these 3 companies that are positioned to benefit. Click here for their names. Hint: They'renot the ones you'd think!
The article Delta Air Lines, Inc. Gets to Stay at Dallas Love Field 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. Adam Levine-Weinberg owns shares of -- and The Motley Fool recommends -- Virgin America. 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.
|
Too much demand -- too little space The current dispute arose after Delta and Southwest both failed to win the rights to use two Love Field gates given up by American Airlines as part of its merger settlement with the Department of Justice. Avoiding one problem, creating others Judge Kinkeade's ruling promotes competition in the narrow sense that Delta will get to continue operating its five daily flights between Love Field and Atlanta. Just like newspaper publishers, telephone utilities, stockbrokers, record companies, bookstores, travel agencies, and big box retailers did when the Internet swept away their business models.
|
Unless the federal restrictions that cap Love Field at 20 gates are removed, American Airlines will continue to dominate the Dallas air travel market. 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.
|
On Friday, a federal judge in Dallas issued a temporary injunction barring Southwest Airlines from evicting Delta Air Lines from Love Field, the closest airport to downtown Dallas. Too much demand -- too little space The current dispute arose after Delta and Southwest both failed to win the rights to use two Love Field gates given up by American Airlines as part of its merger settlement with the Department of Justice. By contrast, Delta's five flights at Love Field are not very meaningful from a competition standpoint, as Delta also operates frequent flights from DFW to Atlanta.
|
Delta will be allowed to continue its five daily flights at Dallas Love Field. But there was more to Kinkeade's ruling than supporting Delta over Southwest. Avoiding one problem, creating others Judge Kinkeade's ruling promotes competition in the narrow sense that Delta will get to continue operating its five daily flights between Love Field and Atlanta.
|
8132.0
|
2016-01-09 00:00:00 UTC
|
Delta Air Lines, Inc. Is On Track for Huge Q1 Fuel Cost Savings
|
AAL
|
https://www.nasdaq.com/articles/delta-air-lines-inc-track-huge-q1-fuel-cost-savings-2016-01-09
|
nan
|
nan
|
A year ago, Delta Air Lines was caught flat-footed by the collapse of the oil market. The company had aggressively hedged its fuel costs for 2015. As a result, it incurred billions of dollars in hedging losses last year.
Meanwhile, Delta's rival American Airlines (NASDAQ: AAL) had avoided buying any hedges. As a result, American Airlines saved more than $5 billion on fuel in 2015, relative to the prior year.
American Airlines profited in 2015 from its no-hedging policy. Photo: American Airlines
Delta has been careful to avoid making the same mistake twice. It is only 5% hedged for 2016. With oil prices continuing to slide, Delta is on pace to deliver huge fuel cost savings this year -- with the biggest benefit (by far) coming in the first quarter.
Delta unwound hedges in Q1 2015
Delta entered 2015 having locked in fuel prices well above market levels, particularly for the first half of the year. During the first quarter, Delta decided to "take its medicine" and close out some of its hedges for the second half of 2015 to guard against further oil price declines.
In retrospect, this was a good decision, as Brent crude prices -- which averaged $58 last February -- fell to less than $40 by year-end. However, it led to Delta recording more than $1 billion in hedging losses in Q1 2015. As a result, it paid an average of $2.93/gallon for fuel that quarter: down just 3% year over year, even though oil prices were about 50% lower than in Q1 2014.
Two big sources of fuel cost savings
This quarter, Delta should face only minimal hedging losses, as it unwound all of its Q1 hedging exposure during the last few months of 2015. That will represent roughly $1 billion in year-over-year savings.
Furthermore, market prices for jet fuel are down significantly (again) from where they were a year ago. During the first quarter of 2015, the average price of Gulf Coast jet fuel was $1.63/gallon. Recently, jet fuel prices have averaged about $1.00/gallon.
Based on Delta's Q1 2015 jet fuel consumption of 918 million gallons, the likely savings at market prices would be $550 million-$600 million. Combining the impact of lower market prices and the lack of hedging losses, Delta's Q1 fuel bill could be down by a staggering $1.5 billion-$1.6 billion year over year.
Savings will flow to the bottom line
Most of Delta's fuel cost savings this quarter will flow to the bottom line. Non-fuel cost growth should remain relatively modest, as wage increases and higher profit sharing (due to Delta's rising earnings) will be offset to some extent by Delta's ongoing shift toward larger, more cost-efficient airplanes.
Most importantly, Delta's unit revenue trajectory is improving dramatically, helped by targeted capacity cuts in weaker international markets. Delta recently estimated that passenger unit revenue (PRASM) declined just 1.5% in Q4.
Delta's unit revenue trajectory improved dramatically in Q4. Photo: The Motley Fool
That's a lot better than its initial projection that PRASM would decline 2.5%-4.5% in the fourth quarter. It's also a big improvement from the 4.6% and 4.9% PRASM declines Delta recorded in Q2 2015 and Q3 2015, respectively.
If Delta can limit its unit revenue decline to 1%-2% this quarter, it should be able to add more than $1 billion in pre-tax profit for Q1. As a result, its adjusted EPS could roughly triple from the $0.45 it reported in Q1 2015.
Delta will outperform in 2016
Delta is virtually assured of outperforming American Airlines by a wide margin in terms of profit growth this year. Delta will get a more than $2 billion year-over-year benefit from lower hedging losses in 2016, whereas American Airlines doesn't hedge its fuel costs at all.
Additionally, American Airlines is seeing a slower revenue recovery thus far. As of a month ago, American was still estimating that PRASM would decline 5%-7% in the fourth quarter.
Lower year-over-year fuel cost savings and steeper revenue declines mean that American Airlines could be hard-pressed to grow its pre-tax income in 2016. Meanwhile, Delta could easily post 30% or 40% earnings growth for the full year. As Delta pulls away from the pack in terms of profitability, its industry-leading valuation could rise even further.
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 On Track for Huge Q1 Fuel Cost Savings 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.
|
Meanwhile, Delta's rival American Airlines (NASDAQ: AAL) had avoided buying any hedges. With oil prices continuing to slide, Delta is on pace to deliver huge fuel cost savings this year -- with the biggest benefit (by far) coming in the first quarter. Most importantly, Delta's unit revenue trajectory is improving dramatically, helped by targeted capacity cuts in weaker international markets.
|
Meanwhile, Delta's rival American Airlines (NASDAQ: AAL) had avoided buying any hedges. Savings will flow to the bottom line Most of Delta's fuel cost savings this quarter will flow to the bottom line. Delta will get a more than $2 billion year-over-year benefit from lower hedging losses in 2016, whereas American Airlines doesn't hedge its fuel costs at all.
|
Meanwhile, Delta's rival American Airlines (NASDAQ: AAL) had avoided buying any hedges. Delta unwound hedges in Q1 2015 Delta entered 2015 having locked in fuel prices well above market levels, particularly for the first half of the year. Combining the impact of lower market prices and the lack of hedging losses, Delta's Q1 fuel bill could be down by a staggering $1.5 billion-$1.6 billion year over year.
|
Meanwhile, Delta's rival American Airlines (NASDAQ: AAL) had avoided buying any hedges. As a result, American Airlines saved more than $5 billion on fuel in 2015, relative to the prior year. American Airlines profited in 2015 from its no-hedging policy.
|
8133.0
|
2016-01-08 00:00:00 UTC
|
The Truth About China and the First Trades of 2016
|
AAL
|
https://www.nasdaq.com/articles/truth-about-china-and-first-trades-2016-2016-01-08
|
nan
|
nan
|
MoneyMorning.com Report - Markets have opened the new year with a resounding thud! Pundits are attributing this to trouble coming out of China , whose currency is again being devalued by the authorities. That's not quite true.
Readers will remember that U.S. stocks fell sharply last August when China unexpectedly began devaluing the yuan. 2016 has started off with another round of devaluations that sent Chinese stocks sharply lower - in fact, the Shanghai Index opened the year down 7%.
This sent U.S. stocks down sharply on the first trading day of the year. After a brief reprieve on the second trading day, both markets headed lower again on Wednesday and Thursday as China lead the way down.
The truth is, China is just a symptom of a larger problem, one I've been talking about nonstop, and we're starting to feel the full-blown disease.
The mainstream financial media is in denial about China's economy . Talk about how China is going to grow at 6% or 7% is ridiculous. The country's economy is probably shrinking.
Sooner or later markets get religion and sins get punished. That time is now. That means investors should get religion before they end up meeting the devil in person.
Before the financial crisis, the world experienced a housing bubble that formed in the United States, spread to the rest of the world, and caused a global financial panic in 2008-09.
After the financial crisis, the world experienced a commodities bubble based in China that spread to the rest of the world and began to come apart in mid-2014.
This has been smoothed over in the media, but it was a key turning point and the start of a stealth bear market.
After seeing its debt quadruple from $7 trillion before the financial crisis to more than $30 trillion today, China is left with overcapacity in its commodity industries, a landscape littered with massive ghost cities, an underdeveloped consumer economy, and no way to repay all of the debt that it incurred to battle the 2008-09 financial crisis. It continues to produce and ship mountains of iron ore, aluminum, copper, zinc, and anything else that isn't nailed down to the rest of the world, pushing down global commodity prices to levels that are bankrupting the global commodity complex. China has announced some cuts in commodity production, but any slowdown in production will further reduce its already shrinking growth.
The consequences of this are manifold:
We see the consequences of the end of the commodities bubble not only in the collapse of oil prices (which keep making new 11-year lows below $34 today ( WTI ) - and will fall into the $20s), but also in the collapse of all commodity prices.
Companies like Glencore Plc. (LON: GLEN), Anglo American Plc. ( AAL ), and other commodity traders and miners are eviscerating themselves in order to survive. Their stock prices have been decimated.
We see the consequences in the collapse of the stocks and bonds of all commodity companies, as well as those connected to the commodities complex, such as pipeline giant Kinder Morgan Inc. ( KMI ).
We see the consequences in the collapse of the high-yield bond market, where the losses in energy and commodity bonds are spreading to all low-rated bonds and poor liquidity conditions are causing losses across the board.
But the damage is just beginning because the global financial system and the U.S. financial system are more leveraged than ever before. This is a very important point, so I want to take a quick moment to discuss it.
Today, U.S. nonfinancial corporations (meaning corporations other than banks) have 40% more net debt (i.e. debt net of cash) than they did in 2007.
We hear a lot of talk about how U.S. corporations have high cash balances. That's true, but that statistic is very misleading. First, a lot of this cash is sitting offshore and would have to be taxed if brought back to the United States. Further, the brilliant analyst Stephanie Pomboy of MacroMavens points out that the top 25 S&P 500 companies hold half of the $1.6 trillion of this cash while the bottom 250 companies have just $89 billion among them. This cash shortage among the "have-nots" will be a big problem when they have to refinance their debt at higher rates due to the fact that their bond prices have crashed and their cost of capital is much higher than it was than during the post-crisis bond bubble. And the situation is much worse among smaller high-yield borrowers who aren't large enough to be included in the S&P 500. So most U.S. companies are not cash rich at all.
The low interest rates created by the Fed's seven years of zero-interest-rate policy and quantitative easing (QE) disguised a lot of sins. They allowed China to play host to the biggest debt bubble in history. That bubble is now popping. And they allowed U.S. corporations to borrow more money than at any time before in history.
Sooner or later markets get religion and sins get punished. That time is now. Take cover in 2016.
Follow Money Morning onFacebook andTwitter.
Editor's Note:As we navigate an increasingly volatile market in 2016, a major credit crisis may be just around the corner. This year, your most valuable asset may be Michael Lewitt's free Sure Money service. In Sure Money , Michael helps you see what's going up, what's going down, and how to profit. Sign up now by clicking here, and you'll get instant access to all of Michael's investing tips, recommendations, and specific instructions, including his exclusive "Super Crash Report."
To get full access to all Money Morning content including our latest Premium Report, "How to Make 2015 Your Wealthiest Year Ever," click here
About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience - for free . Our experts - who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV - deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.
Disclaimer: © 2016 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.
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.
|
( AAL ), and other commodity traders and miners are eviscerating themselves in order to survive. Sign up now by clicking here, and you'll get instant access to all of Michael's investing tips, recommendations, and specific instructions, including his exclusive "Super Crash Report." Our experts - who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV - deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions.
|
( AAL ), and other commodity traders and miners are eviscerating themselves in order to survive. Before the financial crisis, the world experienced a housing bubble that formed in the United States, spread to the rest of the world, and caused a global financial panic in 2008-09. After the financial crisis, the world experienced a commodities bubble based in China that spread to the rest of the world and began to come apart in mid-2014.
|
( AAL ), and other commodity traders and miners are eviscerating themselves in order to survive. After the financial crisis, the world experienced a commodities bubble based in China that spread to the rest of the world and began to come apart in mid-2014. After seeing its debt quadruple from $7 trillion before the financial crisis to more than $30 trillion today, China is left with overcapacity in its commodity industries, a landscape littered with massive ghost cities, an underdeveloped consumer economy, and no way to repay all of the debt that it incurred to battle the 2008-09 financial crisis.
|
( AAL ), and other commodity traders and miners are eviscerating themselves in order to survive. This sent U.S. stocks down sharply on the first trading day of the year. And they allowed U.S. corporations to borrow more money than at any time before in history.
|
8134.0
|
2016-01-07 00:00:00 UTC
|
This Just In: Analysts Upgrade Southwest Airlines -- and American Airlines, Too
|
AAL
|
https://www.nasdaq.com/articles/just-analysts-upgrade-southwest-airlines-and-american-airlines-too-2016-01-07
|
nan
|
nan
|
Delta Air Lines announced on Tuesday that it's hiking airfares around the country by an average of $3 one-way. Two days later, shares of Southwest Airlines and American Airlines both received upgrades.
Coincidence? I think not.
The news
Airline price hikes are funny things . The way it usually works is, one brave airliner will raise its rates, then wait and see if its rivals follow suit. If they don't, the leader quickly tucks tail and rolls back the price hike. But if the rivals do choose to imitate -- that's more than just flattery. It means the market is strong enough that everyone can charge more than they used to.
And that's good news for airlines stocks.
The upgrades
Recognizing this, two separate analysts decided on Thursday to upgrade the stocks of two airlines that followed Delta's lead and hiked their prices: Southwest Airlines and American. Morgan Stanley was the more conservative actor, removing its underweight rating on Southwest and upgrading to equalweight with a $51 price target -- but telling us little more than that it was upgrading, period.
The more interesting upgrade came from Credit Suisse . Not only did CS do a much more significant upgrade, from neutral to outperform, and not only did it give a more sizable hike to price target, from $52 to $57 -- Credit Suisse also gave us a lot more detail about why it thinks American Airlines is a buy.
And this story is about more than just a higher ticket price.
Let's go to the tape
Before I get into those details, let's take a quick look at Credit Suisse's record. (Because to be blunt, if Credit Suisse has shown itself to be a lousy stock picker -- we probably wouldn't care what it thinks about American Airlines in any case.)
Instead, our data on Motley Fool CAPS shows that over the past decade Credit Suisse has been a pretty stellar stock picker, getting a lot of airline picks right, and generally speaking, outperforming about 93% of the investors we track on CAPS. A few examples:
I'll risk stating the obvious here: This is a pretty good record, and a good reason to read further and find out what Credit Suisse thinks about American Airlines.
Without further ado -- what Credit Suisse thinks about American Airlines
According to our friends at StreetInsider.com , the situation at American has improved a lot since 2015. "Integration challenges are largely behind" it after the US Airways merger. "Competitive capacity trends are moderating, expectations are low, & the buyback is sizable."
Credit Suisse still worries that American carries "higher leverage" (about $11.7 billion in debt on a $25.5 billion market cap debt) than its peers, and has "lower FCF." Nonetheless, Credit Suisse says American Airlines is among its four top airline picks for 2016 (the others being the aforementioned Southwest and Delta, with United Continental thrown in for good measure).
Is it right to discount these worries, though, even in light of the "moderating" competition (a fact confirmed by Delta's price hike sticking)? Well, let's see:
Pricing the competition
Priced at just 5.8 times earnings, American Airlines stock certainly looks cheap enough for a company that, according to Yahoo! Finance, is expected to grow its earnings at better than 8% annually over the next five years. For comparison, Delta and Southwest cost 13.8 times earnings and 15.6 times earnings, respectively.
On the other hand, United Continental is priced at just over three times trailing earnings. And all three of these American Airlines rivals are pegged for earnings growth in excess of 20% annualized by Yahoo! Finance.
Free cash flow-wise, American Airlines looks bottom-of-the-heap with less than $900 million in trailing cash profits (versus more than $4.9 billion in reported net income). According to data from S&P Capital IQ , Southwest ($1.3 billion in free cash flow), United Continental ($2.1 billion FCF), and Delta ($5.3 billion) all beat that with a stick.
What it means to investors
A low P/E and a respectable growth rate -- plus an endorsement from Credit Suisse -- make three great reasons to like American Airlines stock. That said, the company's weak free cash flow and consequent price-to-free-cash-flow ratio of more than 28 still give me pause.
Considering how much more undervalued the alternatives look, I'd probably be inclined to buy any of Credit Suisse's other top recommendations -- again, those are Delta, United Continental, and Southwest, and roughly in that order -- before adding American Airlines to my collection.
Because bargain shopping is fine. But if you're shopping for bargains, why not buy the best?
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 This Just In: Analysts Upgrade Southwest Airlines -- and American Airlines, Too 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. 298 out of more than 75,000 rated members.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.
|
Not only did CS do a much more significant upgrade, from neutral to outperform, and not only did it give a more sizable hike to price target, from $52 to $57 -- Credit Suisse also gave us a lot more detail about why it thinks American Airlines is a buy. What it means to investors A low P/E and a respectable growth rate -- plus an endorsement from Credit Suisse -- make three great reasons to like American Airlines stock. Considering how much more undervalued the alternatives look, I'd probably be inclined to buy any of Credit Suisse's other top recommendations -- again, those are Delta, United Continental, and Southwest, and roughly in that order -- before adding American Airlines to my collection.
|
Credit Suisse still worries that American carries "higher leverage" (about $11.7 billion in debt on a $25.5 billion market cap debt) than its peers, and has "lower FCF." Well, let's see: Pricing the competition Priced at just 5.8 times earnings, American Airlines stock certainly looks cheap enough for a company that, according to Yahoo! According to data from S&P Capital IQ , Southwest ($1.3 billion in free cash flow), United Continental ($2.1 billion FCF), and Delta ($5.3 billion) all beat that with a stick.
|
The upgrades Recognizing this, two separate analysts decided on Thursday to upgrade the stocks of two airlines that followed Delta's lead and hiked their prices: Southwest Airlines and American. Not only did CS do a much more significant upgrade, from neutral to outperform, and not only did it give a more sizable hike to price target, from $52 to $57 -- Credit Suisse also gave us a lot more detail about why it thinks American Airlines is a buy. Nonetheless, Credit Suisse says American Airlines is among its four top airline picks for 2016 (the others being the aforementioned Southwest and Delta, with United Continental thrown in for good measure).
|
Not only did CS do a much more significant upgrade, from neutral to outperform, and not only did it give a more sizable hike to price target, from $52 to $57 -- Credit Suisse also gave us a lot more detail about why it thinks American Airlines is a buy. Instead, our data on Motley Fool CAPS shows that over the past decade Credit Suisse has been a pretty stellar stock picker, getting a lot of airline picks right, and generally speaking, outperforming about 93% of the investors we track on CAPS. Well, let's see: Pricing the competition Priced at just 5.8 times earnings, American Airlines stock certainly looks cheap enough for a company that, according to Yahoo!
|
8135.0
|
2016-01-07 00:00:00 UTC
|
The Zacks Analyst Blog Highlights: United Rentals, Wal-Mart Stores, Qorvo, Fluor and American Airlines Group
|
AAL
|
https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-united-rentals-wal-mart-stores-qorvo-fluor-and-american
|
nan
|
nan
|
For Immediate Release
Chicago, IL - January 07, 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 United Rentals, Inc. ( URI ), Wal-Mart Stores Inc. ( WMT ), Qorvo, Inc. ( QRVO ), Fluor Corporation ( FLR ) and American Airlines Group Inc. ( AAL ).
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 S&P 500 Losers in 2015 Ready to Rebound
Stocks faced a difficult time last year with several headwinds impacting the markets. Prominent among the factors influencing the broader markets were uncertainty over a Fed rate hike, weaknesses in China's economy, a stronger dollar and falling oil prices .
Several market watchers expect 2016 to be no different. Markets are likely to be buoyed by domestic economic strength and buffeted by external headwinds. Despite this situation, specific stocks from the index which declined over 2015 may rebound this year on the strength of their fundamentals. Moreover, they offer good value at relatively attractive prices, which is why it makes sense to pick them up now.
Last Year's Performance
The S&P 500, generally considered as a reliable indicator of the broader markets, declined 0.7% over the year. More than 250 stocks from the index ended the year in the red. This was symptomatic of the year for stocks as a whole, with the markets ending flat overall.
An economic slowdown in China took a toll on investor sentiment. Plunging oil prices decimated energy companies and adversely affected junk bonds. Uncertainty about the timing of the first rate hike in a decade led to concerns that the Fed lacked confidence in U.S. economic growth.
The U.S. economy hardly helped the markets in 2015. For the first three months, it expanded at a miserly pace, affected by a harsh winter. The economy picked up pace in the second quarter only to slow down in the third.
Outlook for 2016
This year is likely to be marked by a certain degree of domestic strength on the economic front. But companies will be affected by external factors, which have strengthened the dollar and caused a slack in demand. Major slumps are unlikely, but short periods of excessive volatility are expected to recur.
However, the market has responded in a positive manner to the Fed's rate hike. This indicates that the impact of such a move had already been priced in. Additionally, there is a certain degree of belief in the economy given the significant improvement on the employment front.
Our Choices
Since a number of stocks from the S&P 500 are languishing in the red, it would make good sense to buy those which sport strong fundamentals. A value-centric strategy makes particularly good sense, since excellent choices are now available at relatively attractive prices.
Once the market discovers their true value, investors are likely to profit from these picks. Our selection is also backed by a good Zacks Value Score and Zacks Rank.
We narrowed down our choices with the help of our new style score system .
Our research shows that stocks with a Value Style Score of 'A' or 'B' when combined with a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities in the value investing space.
United Rentals, Inc. 's ( URI ) third-quarter 2015 earnings beat the Zacks Consensus Estimate and also increased year over year. Rental revenue experienced a year-over-year increase, particularly in the Trench Safety and Power & HVAC segments.
United Rentals holds a Zacks Rank #1 (Strong Buy) and has a Value Style Score of 'A.' The stock's price declined 30% in 2015.
Wal-Mart Stores Inc. ( WMT ) has delivered positive comps in the U.S. in the last five quarters, after delivering negative comps for many quarters. This was the result of lower fuel prices, which eased consumers' spending power.
Wal-Mart holds a Zacks Rank #2 (Buy) and has a Value Style Score of 'A.' The stock's price declined 28.6% in 2015.
Qorvo, Inc. ( QRVO ) reported healthy second-quarter fiscal 2016 results as adjusted earnings comfortably beat the Zacks Consensus Estimate on a nearly two-fold jump in revenues
Qorvo holds a Zacks Rank #2 and has a Value Style Score of 'B.' The stock's price declined 27.7% in 2015.
Fluor Corporation 's ( FLR ) third-quarter 2015 earnings beat the Zacks Consensus Estimate on the back of operational streamlining and the company's focus on offering integrated solutions.
Fluor holds a Zacks Rank #2 and has a Value Style Score of 'A.' The stock's price declined 22.2% in 2015.
American Airlines Group Inc. ( AAL ) reported higher-than-expected earnings in the third quarter of 2015. Total operating expenses declined 11.9% to $8.7 billion on the back of a 43.5% reduction in fuel costs.
American Airlines Group holds a Zacks Rank #2 and has a Value Style Score of 'A.' The stock's price declined 21.4% in 2015.
Want to find the best stocks for 2016? Find out more information about the market-crushingZacks Top 10 list here >>>
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
UTD RENTALS INC (URI): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis Report
QORVO INC (QRVO): Free Stock Analysis Report
FLUOR CORP-NEW (FLR): 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 United Rentals, Inc. ( URI ), Wal-Mart Stores Inc. ( WMT ), Qorvo, Inc. ( QRVO ), Fluor Corporation ( FLR ) and American Airlines Group Inc. ( AAL ). American Airlines Group Inc. ( AAL ) reported higher-than-expected earnings in the third quarter of 2015. Click to get this free report UTD RENTALS INC (URI): Free Stock Analysis Report WAL-MART STORES (WMT): Free Stock Analysis Report QORVO INC (QRVO): Free Stock Analysis Report FLUOR CORP-NEW (FLR): 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 United Rentals, Inc. ( URI ), Wal-Mart Stores Inc. ( WMT ), Qorvo, Inc. ( QRVO ), Fluor Corporation ( FLR ) and American Airlines Group Inc. ( AAL ). Click to get this free report UTD RENTALS INC (URI): Free Stock Analysis Report WAL-MART STORES (WMT): Free Stock Analysis Report QORVO INC (QRVO): Free Stock Analysis Report FLUOR CORP-NEW (FLR): 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 ) reported higher-than-expected earnings in the third quarter of 2015.
|
Click to get this free report UTD RENTALS INC (URI): Free Stock Analysis Report WAL-MART STORES (WMT): Free Stock Analysis Report QORVO INC (QRVO): Free Stock Analysis Report FLUOR CORP-NEW (FLR): 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 United Rentals, Inc. ( URI ), Wal-Mart Stores Inc. ( WMT ), Qorvo, Inc. ( QRVO ), Fluor Corporation ( FLR ) and American Airlines Group Inc. ( AAL ). American Airlines Group Inc. ( AAL ) reported higher-than-expected earnings in the third quarter of 2015.
|
Stocks recently featured in the blog include United Rentals, Inc. ( URI ), Wal-Mart Stores Inc. ( WMT ), Qorvo, Inc. ( QRVO ), Fluor Corporation ( FLR ) and American Airlines Group Inc. ( AAL ). American Airlines Group Inc. ( AAL ) reported higher-than-expected earnings in the third quarter of 2015. Click to get this free report UTD RENTALS INC (URI): Free Stock Analysis Report WAL-MART STORES (WMT): Free Stock Analysis Report QORVO INC (QRVO): Free Stock Analysis Report FLUOR CORP-NEW (FLR): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
8136.0
|
2016-01-06 00:00:00 UTC
|
5 S&P 500 Losers of 2015 Set to Rebound
|
AAL
|
https://www.nasdaq.com/articles/5-sp-500-losers-2015-set-rebound-2016-01-06
|
nan
|
nan
|
Stocks faced a difficult time last year with several headwinds impacting the markets. Prominent among the factors influencing the broader markets were uncertainty over a Fed rate hike, weaknesses in China's economy, a stronger dollar and falling oil prices .
Several market watchers expect 2016 to be no different. Markets are likely to be buoyed by domestic economic strength and buffeted by external headwinds. Despite this situation, specific stocks from the index which declined over 2015 may rebound this year on the strength of their fundamentals. Moreover, they offer good value at relatively attractive prices, which is why it makes sense to pick them up now.
Last Year's Performance
The S&P 500, generally considered as a reliable indicator of the broader markets, declined 0.7% over the year. More than 250 stocks from the index ended the year in the red. This was symptomatic of the year for stocks as a whole, with the markets ending flat overall.
An economic slowdown in China took a toll on investor sentiment. Plunging oil prices decimated energy companies and adversely affected junk bonds. Uncertainty about the timing of the first rate hike in a decade led to concerns that the Fed lacked confidence in U.S. economic growth.
The U.S. economy hardly helped the markets in 2015. For the first three months, it expanded at a miserly pace, affected by a harsh winter. The economy picked up pace in the second quarter only to slow down in the third.
Outlook for 2016
This year is likely to be marked by a certain degree of domestic strength on the economic front. But companies will be affected by external factors, which have strengthened the dollar and caused a slack in demand. Major slumps are unlikely, but short periods of excessive volatility are expected to recur.
However, the market has responded in a positive manner to the Fed's rate hike. This indicates that the impact of such a move had already been priced in. Additionally, there is a certain degree of belief in the economy given the significant improvement on the employment front.
Our Choices
Since a number of stocks from the S&P 500 are languishing in the red, it would make good sense to buy those which sport strong fundamentals. A value-centric strategy makes particularly good sense, since excellent choices are now available at relatively attractive prices.
Once the market discovers their true value, investors are likely to profit from these picks. Our selection is also backed by a good Zacks Value Score and Zacks Rank.
We narrowed down our choices with the help of our new style score system .
Our research shows that stocks with a Value Style Score of 'A' or 'B' when combined with a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities in the value investing space.
United Rentals, Inc. 's URI third-quarter 2015 earnings beat the Zacks Consensus Estimate and also increased year over year. Rental revenue experienced a year-over-year increase, particularly in the Trench Safety and Power & HVAC segments.
United Rentals holds a Zacks Rank #1 (Strong Buy) and has a Value Style Score of 'A.' The stock's price declined 30% in 2015.
Wal-Mart Stores Inc.WMT has delivered positive comps in the U.S. in the last five quarters, after delivering negative comps for many quarters. This was the result of lower fuel prices, which eased consumers' spending power.
Wal-Mart holds a Zacks Rank #2 (Buy) and has a Value Style Score of 'A.' The stock's price declined 28.6% in 2015.
Qorvo, Inc.QRVO reported healthy second-quarter fiscal 2016 results as adjusted earnings comfortably beat the Zacks Consensus Estimate on a nearly two-fold jump in revenues
Qorvo holds a Zacks Rank #2 and has a Value Style Score of 'B.' The stock's price declined 27.7% in 2015.
Fluor Corporation 's FLR third-quarter 2015 earnings beat the Zacks Consensus Estimate on the back of operational streamlining and the company's focus on offering integrated solutions.
Fluor holds a Zacks Rank #2 and has a Value Style Score of 'A.' The stock's price declined 22.2% in 2015.
American Airlines Group Inc.AAL reported higher-than-expected earnings in the third quarter of 2015. Total operating expenses declined 11.9% to $8.7 billion on the back of a 43.5% reduction in fuel costs.
American Airlines Group holds a Zacks Rank #2 and has a Value Style Score of 'A.' The stock's price declined 21.4% in 2015.
Want to find the best stocks for 2016? Find out more information about the market-crushing Zacks Top 10 list here >>>
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
WAL-MART STORES (WMT): Free Stock Analysis Report
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
UTD RENTALS INC (URI): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
QORVO INC (QRVO): 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 third quarter of 2015. Click to get this free report WAL-MART STORES (WMT): Free Stock Analysis Report FLUOR CORP-NEW (FLR): Free Stock Analysis Report UTD RENTALS INC (URI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report QORVO INC (QRVO): Free Stock Analysis Report To read this article on Zacks.com click here. Prominent among the factors influencing the broader markets were uncertainty over a Fed rate hike, weaknesses in China's economy, a stronger dollar and falling oil prices .
|
Click to get this free report WAL-MART STORES (WMT): Free Stock Analysis Report FLUOR CORP-NEW (FLR): Free Stock Analysis Report UTD RENTALS INC (URI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report QORVO INC (QRVO): 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 third quarter of 2015. Our research shows that stocks with a Value Style Score of 'A' or 'B' when combined with a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities in the value investing space.
|
Click to get this free report WAL-MART STORES (WMT): Free Stock Analysis Report FLUOR CORP-NEW (FLR): Free Stock Analysis Report UTD RENTALS INC (URI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report QORVO INC (QRVO): 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 third quarter of 2015. Our research shows that stocks with a Value Style Score of 'A' or 'B' when combined with a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities in the value investing space.
|
American Airlines Group Inc.AAL reported higher-than-expected earnings in the third quarter of 2015. Click to get this free report WAL-MART STORES (WMT): Free Stock Analysis Report FLUOR CORP-NEW (FLR): Free Stock Analysis Report UTD RENTALS INC (URI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report QORVO INC (QRVO): Free Stock Analysis Report To read this article on Zacks.com click here. The economy picked up pace in the second quarter only to slow down in the third.
|
8137.0
|
2016-01-06 00:00:00 UTC
|
Delta Air Lines Inc.'s Revenue Recovery Strengthens
|
AAL
|
https://www.nasdaq.com/articles/delta-air-lines-incs-revenue-recovery-strengthens-2016-01-06
|
nan
|
nan
|
The three global U.S. airlines all faced significant revenue pressure in 2015. Unit revenue declined at Delta Air Lines , American Airlines , and United Continental due to a combination of the strong dollar, falling fuel surcharges on some international routes, and rising low-cost competition in the U.S.
U.S. airlines experienced big unit revenue declines in 2015. Photo: American Airlines
Delta, American, and United all hope to stabilize their unit revenue in 2016. However, Delta Air Lines has been by far the most proactive in making targeted capacity cuts to support a revenue recovery. These efforts are starting to pay off in a big way.
Unit revenue slips
As Delta's unit revenue performance deteriorated during the first half of 2015, the company implemented significant cuts to its fall schedule, particularly for international routes. It set a goal of returning to flat or positive unit revenue growth by the end of the year.
However, Delta admitted in October that it would miss this target. At that time, it projected a still substantial 2.5%-4.5% decline in passenger unit revenue for Q4. On the other hand, this was better than the guidance provided by its peers. American Airlines estimated that passenger unit revenue would decline by 5%-7%, while United Continental forecast a 4%-6% drop.
Returning to consistent outperformance
From today's perspective, it seems that Delta was extremely conservative with its Q4 guidance. Following the disappointment of missing its year-end target, Delta has returned to its previous trend of consistent outperformance.
First, Delta announced in early December that it expected to reach the upper end of its unit revenue guidance , following strong unit revenue results in October and November. At its investor day later in the month, Delta raised its guidance again, calling for a passenger unit revenue decline of only 2%.
Delta has steadily raised its unit revenue guidance in the last month or so. Photo: The Motley Fool
Finally, on Tuesday, Delta raised its fourth quarter unit revenue guidance for a third time. It now expects to report a 1.5% passenger unit revenue decline. Based on the company's recent trend of issuing relatively conservative guidance, it seems likely that Delta will reach the high end of its operating margin guidance range (17.5%).
Year-over-year unit revenue comparisons will get easier in 2016. As a result, Delta's stronger-than-expected Q4 revenue performance bodes well for the company's ability to return to unit revenue growth by the middle of this year.
Good news for American Airlines and United Continental?
Delta's strengthening unit revenue trajectory could be good news for its rivals. Some of Delta's performance improvements have been driven by its own actions to align capacity with demand. But to the extent that Delta has benefited from improving macro trends, American Airlines and United Continental also stand to gain.
One hopeful sign emerged this week, as Delta Air Lines implemented a broad fare increase and other major airlines matched its move. This marks an important shift from the stiff price competition that occurred throughout 2015.
That said, as of early December, American Airlines was reiterating its guidance for a 5%-7% unit revenue decline in Q4. United Continental has not updated its guidance, either.
Looking for a bounce in 2016
Investors may have to wait for the major airlines' fourth-quarter earnings reports later this month to get more clarity on the outlook for unit revenue during 2016. Based on the information currently available, though, it looks like investors' concerns about declining unit revenue at the major airlines are overblown.
All three major airline stocks trade for significantly less than 10 times forward earnings. As unit revenue stabilizes and then returns to growth at Delta, American, and United during 2016, their share prices could rocket higher.
3 Companies Poised to Explode When Cable Dies
Cable is dying. And there are 3 stocks that are poised to explode when this faltering $2.2 trillion industry finally bites the dust. Just like newspaper publishers, telephone utilities, stockbrokers, record companies, bookstores, travel agencies, and big box retailers did when the Internet swept away their business models. And when cable falters, you don't want to miss out on these 3 companies that are positioned to benefit. Click here for their names. Hint: They'renot the ones you'd think!
The article Delta Air Lines Inc.'s Revenue Recovery Strengthens 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.
|
One hopeful sign emerged this week, as Delta Air Lines implemented a broad fare increase and other major airlines matched its move. Looking for a bounce in 2016 Investors may have to wait for the major airlines' fourth-quarter earnings reports later this month to get more clarity on the outlook for unit revenue during 2016. Just like newspaper publishers, telephone utilities, stockbrokers, record companies, bookstores, travel agencies, and big box retailers did when the Internet swept away their business models.
|
Unit revenue declined at Delta Air Lines , American Airlines , and United Continental due to a combination of the strong dollar, falling fuel surcharges on some international routes, and rising low-cost competition in the U.S. U.S. airlines experienced big unit revenue declines in 2015. First, Delta announced in early December that it expected to reach the upper end of its unit revenue guidance , following strong unit revenue results in October and November. 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.
|
Unit revenue declined at Delta Air Lines , American Airlines , and United Continental due to a combination of the strong dollar, falling fuel surcharges on some international routes, and rising low-cost competition in the U.S. U.S. airlines experienced big unit revenue declines in 2015. Photo: American Airlines Delta, American, and United all hope to stabilize their unit revenue in 2016. First, Delta announced in early December that it expected to reach the upper end of its unit revenue guidance , following strong unit revenue results in October and November.
|
Unit revenue declined at Delta Air Lines , American Airlines , and United Continental due to a combination of the strong dollar, falling fuel surcharges on some international routes, and rising low-cost competition in the U.S. U.S. airlines experienced big unit revenue declines in 2015. However, Delta Air Lines has been by far the most proactive in making targeted capacity cuts to support a revenue recovery. At its investor day later in the month, Delta raised its guidance again, calling for a passenger unit revenue decline of only 2%.
|
8138.0
|
2016-01-06 00:00:00 UTC
|
European Stocks Decline on Risk Aversion Following North Korean Nuclear Test
|
AAL
|
https://www.nasdaq.com/articles/european-stocks-decline-risk-aversion-following-north-korean-nuclear-test-2016-01-06
|
nan
|
nan
|
European stocks declined as investors shunned riskier assets on threats to global security after North Korea said it carried out a successful hydrogen bomb test and tension between Iran and Saudi Arabia persisted.
The EuroStoxx 50, a euro-region blue-chip index, fell 1.5% and Germany's DAX was recently down at 1.3%.
More negative news about the Chinese economy dragged down investor sentiment worldwide after a gauge of the services sector in the world's second-largest economy fell to a 17-month low. Chinese stock themselves rebounded by the end of the trading day after the government pledged more measures to shore up the economy. The Shanghai Composite Index closed up 2.3%.
The FTSE-100 in London slipped 1.4% and Paris's benchmark, the CAC 40, recently traded down 1.6%. Mining and commodities-related shares were the biggest decliners on concern demand for raw materials will drop amid sluggish Chinese growth. Anglo American Plc ( AAL ) dropped 5.4% and Glencore Plc (GLEN) lost 4% in recent trading.
Infineon AG (IFX) and Dialog Semiconductor AG (DLG), both listed on Germany's Xetra exchange, fell 5% and 1.8% respectively, following a report that Apple Inc. is cutting production of its iPhones amid weakening demand.
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.
|
Anglo American Plc ( AAL ) dropped 5.4% and Glencore Plc (GLEN) lost 4% in recent trading. European stocks declined as investors shunned riskier assets on threats to global security after North Korea said it carried out a successful hydrogen bomb test and tension between Iran and Saudi Arabia persisted. Chinese stock themselves rebounded by the end of the trading day after the government pledged more measures to shore up the economy.
|
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Anglo American Plc ( AAL ) dropped 5.4% and Glencore Plc (GLEN) lost 4% in recent trading. The EuroStoxx 50, a euro-region blue-chip index, fell 1.5% and Germany's DAX was recently down at 1.3%.
|
Anglo American Plc ( AAL ) dropped 5.4% and Glencore Plc (GLEN) lost 4% in recent trading. More negative news about the Chinese economy dragged down investor sentiment worldwide after a gauge of the services sector in the world's second-largest economy fell to a 17-month low. Infineon AG (IFX) and Dialog Semiconductor AG (DLG), both listed on Germany's Xetra exchange, fell 5% and 1.8% respectively, following a report that Apple Inc. is cutting production of its iPhones amid weakening demand.
|
Anglo American Plc ( AAL ) dropped 5.4% and Glencore Plc (GLEN) lost 4% in recent trading. European stocks declined as investors shunned riskier assets on threats to global security after North Korea said it carried out a successful hydrogen bomb test and tension between Iran and Saudi Arabia persisted. The EuroStoxx 50, a euro-region blue-chip index, fell 1.5% and Germany's DAX was recently down at 1.3%.
|
8139.0
|
2016-01-06 00:00:00 UTC
|
Nasdaq 100 Movers: LRCX, WFM
|
AAL
|
https://www.nasdaq.com/articles/nasdaq-100-movers-lrcx-wfm-2016-01-06
|
nan
|
nan
|
In early trading on Wednesday, shares of Whole Foods Market ( WFM ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 0.9%. Year to date, Whole Foods Market registers a 1.4% gain.
And the worst performing Nasdaq 100 component thus far on the day is Lam Research ( LRCX ), trading down 4.2%. Lam Research is lower by about 5.7% looking at the year to date performance.
Two other components making moves today are Skyworks Solutions ( SWKS ), trading down 3.6%, and American Airlines Group ( AAL ), trading up 0.8% on the day.
VIDEO: Nasdaq 100 Movers: LRCX, WFM
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 Skyworks Solutions ( SWKS ), trading down 3.6%, and American Airlines Group ( AAL ), trading up 0.8% on the day. In early trading on Wednesday, shares of Whole Foods Market ( WFM ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 0.9%. And the worst performing Nasdaq 100 component thus far on the day is Lam Research ( LRCX ), trading down 4.2%.
|
Two other components making moves today are Skyworks Solutions ( SWKS ), trading down 3.6%, and American Airlines Group ( AAL ), trading up 0.8% on the day. And the worst performing Nasdaq 100 component thus far on the day is Lam Research ( LRCX ), trading down 4.2%. VIDEO: Nasdaq 100 Movers: LRCX, WFM 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 Skyworks Solutions ( SWKS ), trading down 3.6%, and American Airlines Group ( AAL ), trading up 0.8% on the day. In early trading on Wednesday, shares of Whole Foods Market ( WFM ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 0.9%. And the worst performing Nasdaq 100 component thus far on the day is Lam Research ( LRCX ), trading down 4.2%.
|
Two other components making moves today are Skyworks Solutions ( SWKS ), trading down 3.6%, and American Airlines Group ( AAL ), trading up 0.8% on the day. In early trading on Wednesday, shares of Whole Foods Market ( WFM ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 0.9%. And the worst performing Nasdaq 100 component thus far on the day is Lam Research ( LRCX ), trading down 4.2%.
|
8140.0
|
2016-01-04 00:00:00 UTC
|
European Stocks Plunge in Gloomy Start to 2016 After Asian Selloff on Concern About Chinese Growth Outlook
|
AAL
|
https://www.nasdaq.com/articles/european-stocks-plunge-gloomy-start-2016-after-asian-selloff-concern-about-chinese-growth
|
nan
|
nan
|
European stocks declined, taking their cue from Asian equity markets, after a Chinese index of manufacturing activity signaled weakening momentum for the world's second-largest economy.
On the first trading day of the new year the Euro Stoxx 50 index, a euro-region blue-chip index, was recently down 3.2 percent, while Germany's benchmark, the DAX index, posted the biggest drop among major European indices, plunging more than 3 percent.
Stocks across Asia declined after a report showed China's Caixin Purchasing Managers' Index slid for a 10th consecutive month in December, heightening concern a slowdown in emerging-market economies will weigh on global growth. Growing political tension in the Middle East contributed to the selloff. China's Shanghai Composite index closed down almost 7%.
London's FTSE-100 fell 2.4%, led by mining companies such as Anglo-American Plc ( AAL ), which was recently down 5.5% and Glencore Plc (GLEN), which slipped 5.9%.
Paris's CAC 40 was recently down 2.7%. Declines in European stocks weren't mitigated by a report showing that a gauge of manufacturing activity rose to a 20-month high in December.
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.
|
London's FTSE-100 fell 2.4%, led by mining companies such as Anglo-American Plc ( AAL ), which was recently down 5.5% and Glencore Plc (GLEN), which slipped 5.9%. European stocks declined, taking their cue from Asian equity markets, after a Chinese index of manufacturing activity signaled weakening momentum for the world's second-largest economy. Stocks across Asia declined after a report showed China's Caixin Purchasing Managers' Index slid for a 10th consecutive month in December, heightening concern a slowdown in emerging-market economies will weigh on global growth.
|
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. London's FTSE-100 fell 2.4%, led by mining companies such as Anglo-American Plc ( AAL ), which was recently down 5.5% and Glencore Plc (GLEN), which slipped 5.9%. European stocks declined, taking their cue from Asian equity markets, after a Chinese index of manufacturing activity signaled weakening momentum for the world's second-largest economy.
|
London's FTSE-100 fell 2.4%, led by mining companies such as Anglo-American Plc ( AAL ), which was recently down 5.5% and Glencore Plc (GLEN), which slipped 5.9%. European stocks declined, taking their cue from Asian equity markets, after a Chinese index of manufacturing activity signaled weakening momentum for the world's second-largest economy. On the first trading day of the new year the Euro Stoxx 50 index, a euro-region blue-chip index, was recently down 3.2 percent, while Germany's benchmark, the DAX index, posted the biggest drop among major European indices, plunging more than 3 percent.
|
London's FTSE-100 fell 2.4%, led by mining companies such as Anglo-American Plc ( AAL ), which was recently down 5.5% and Glencore Plc (GLEN), which slipped 5.9%. On the first trading day of the new year the Euro Stoxx 50 index, a euro-region blue-chip index, was recently down 3.2 percent, while Germany's benchmark, the DAX index, posted the biggest drop among major European indices, plunging more than 3 percent. Stocks across Asia declined after a report showed China's Caixin Purchasing Managers' Index slid for a 10th consecutive month in December, heightening concern a slowdown in emerging-market economies will weigh on global growth.
|
8141.0
|
2015-12-31 00:00:00 UTC
|
Airline Stock Roundup: United Continental a Step Closer to Pilots Deal, Weather Woes Hit Carriers
|
AAL
|
https://www.nasdaq.com/articles/airline-stock-roundup%3A-united-continental-a-step-closer-to-pilots-deal-weather-woes-hit
|
nan
|
nan
|
The final week of 2015 has been a relatively quiet one for the airline industry. The most eye-catching update came from Chicago-based United Continental Holdings UAL , the parent company of United Airlines. Shares of the carrier gained value on Dec 24, following the news that the leadership of its pilots' union has accepted the tentative deal pertaining to the extension of the contract with its pilots. The airline's pilots will now make the final call and vote on the issue shortly. United Continental was also in the news owing to its decision to expand operations in China.
The other important update in the past week, which was a day short of trading owing to the Christmas holiday on Dec 25, pertained to the brutal weather which led to multiple flights being cancelled/delayed. We believe that disruption of flights during the peak festive season will considerably impact air traffic this month for most carriers.
Read the last Airline Stock Roundup for Dec 23, 2015 .
Recap of the Past Week's Most Important Stories
1. More than 12,000 pilots of United Continental will now decide on extending the pay-related contract by two years. This is a direct result of the favorable (13-7) vote received on the issue from the leadership of the carrier's pilots' union (Air Line Pilots Association International or ALPA). Following the leadership's decision to accept the tentative deal, the ball is now entirely in the pilots' court. The members of the pilots' union would vote on the tentative contract from Jan 6 through Jan 22, according to a Flightglobal article (read more: United Continental Gains on Positive Labor Update ).
According to an AINonlinereport, United Continental intends to add more flights connecting the U.S. and China. The decision followed obstacles encountered by the carrier pertaining to its service to India, with Middle East carriers relentlessly adding capacity. According to a businesstraveller report, the carrier won't expand its services further in India due to the excessive "unfair" competition faced on the route from Middle East carriers. United Continental, which already offers more non-stop flights to China compared to any other U.S. carrier, aims to expand further in the country despite its ongoing economic slowdown. Increased travel to and from China is the key factor driving this decision. Currently, San Francisco is the carrier's main hub for its Chinese service. However, United Continental plans to add more U.S. hubs in the future as it aims to expand its operations to China's secondary cities.
2. Inclement weather conditions led to widespread flight cancellations in and around Chicago recently. Chicago O'Hare International Airport - one of the busiest airports in the world - has been affected the most by the extreme weather conditions. Most Chicago-bound flights faced a similar crisis in Nov 2014 when Northeast snowstorm Cato significantly affected travel plans of a large number of fliers. To counter the effect of the calamity, carriers like American Airlines Group AAL and United Airlines waived off re-booking charges for fliers while Delta Air Lines Inc. DAL offered flexible travel plans to passengers (read more: Flights in Chicago Hit by Weather Woes, Over 1600 Called Off ).
3. The closing week of the year brought in good news for the low-cost carrier Southwest Airlines LUV on the labor front. The company inked a tentative deal with Transport Workers Union Local 555, the union that represents more than 12,000 Ground Operations, Provisioning, and Cargo Agents of Southwest Airlines. Although a positive development, there is still a long way to go before the management can claim victory on the issue. Following the agreement in principle, the tentative deal will now have to be ratified. In the event of the ratification vote being favorable, more than four years of negotiations between the parties will end on a happy note. The new contract will be amendable in 2021. In the scenario of the deal materializing, the pay structure and other benefits of the workers would improve substantially.
4. In a customer friendly move, California-based low-cost airline Virgin America VA , partly owned by British billionaire investor Richard Branson, inked a codeshare agreement with China Southern Airlines. The move is aimed at further smoothening ticket reservations and travel between China, Southeast Asia and multiple Virgin America destinations across the U.S. We note that China Southern is the only carrier offering non-stop service between Guangzhou and Wuhan and the U.S. The pact permits a one-stop booking process, a single ticket and one-stop check-in for the entire trip.
Performance
The following table shows the price movement of the major airline players over the past week and during the last 6 months.
Over the course of last week, the NYSE ARCA Airline index declined marginally to $89.57. The worst performer was GOL Linhas GOL whose stock shed 12.12% due to the ongoing economic weakness in Brazil and currency headwinds.
Meanwhile, over the last 6 months, the NYSE ARCA Airline index lost 4.7% of its value. GOL Linhas was again the main laggard, as it witnessed a 75.53% price decline. On the other hand, Hawaiian Holdings emerged as the biggest beneficiary on the bourses with its shares advancing 57.47% during the period.
What's Next in the Airline Biz?
We expect December traffic updates from carriers like Alaska Air Group ALK and Delta in the coming days. Focus will also remain on the movement of oil prices that are currently hovering below the $40 a barrel mark.
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
GOL LINHAS-ADR (GOL): 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
ALASKA AIR GRP (ALK): 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.
|
To counter the effect of the calamity, carriers like American Airlines Group AAL and United Airlines waived off re-booking charges for fliers while Delta Air Lines Inc. DAL offered flexible travel plans to passengers (read more: Flights in Chicago Hit by Weather Woes, Over 1600 Called Off ). Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report GOL LINHAS-ADR (GOL): 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 ALASKA AIR GRP (ALK): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. The other important update in the past week, which was a day short of trading owing to the Christmas holiday on Dec 25, pertained to the brutal weather which led to multiple flights being cancelled/delayed.
|
To counter the effect of the calamity, carriers like American Airlines Group AAL and United Airlines waived off re-booking charges for fliers while Delta Air Lines Inc. DAL offered flexible travel plans to passengers (read more: Flights in Chicago Hit by Weather Woes, Over 1600 Called Off ). Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report GOL LINHAS-ADR (GOL): 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 ALASKA AIR GRP (ALK): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. The members of the pilots' union would vote on the tentative contract from Jan 6 through Jan 22, according to a Flightglobal article (read more: United Continental Gains on Positive Labor Update ).
|
To counter the effect of the calamity, carriers like American Airlines Group AAL and United Airlines waived off re-booking charges for fliers while Delta Air Lines Inc. DAL offered flexible travel plans to passengers (read more: Flights in Chicago Hit by Weather Woes, Over 1600 Called Off ). Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report GOL LINHAS-ADR (GOL): 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 ALASKA AIR GRP (ALK): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. Shares of the carrier gained value on Dec 24, following the news that the leadership of its pilots' union has accepted the tentative deal pertaining to the extension of the contract with its pilots.
|
To counter the effect of the calamity, carriers like American Airlines Group AAL and United Airlines waived off re-booking charges for fliers while Delta Air Lines Inc. DAL offered flexible travel plans to passengers (read more: Flights in Chicago Hit by Weather Woes, Over 1600 Called Off ). Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report GOL LINHAS-ADR (GOL): 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 ALASKA AIR GRP (ALK): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. Shares of the carrier gained value on Dec 24, following the news that the leadership of its pilots' union has accepted the tentative deal pertaining to the extension of the contract with its pilots.
|
8142.0
|
2015-12-30 00:00:00 UTC
|
Airline Stocks Fall on Bad Weather
|
AAL
|
https://www.nasdaq.com/articles/airline-stocks-fall-bad-weather-2015-12-30
|
nan
|
nan
|
Shares of America's top three airlines -- American Airlines , Delta Air Lines , and United Continental -- slumped on Monday as severe weather ripped through the U.S., causing thousands of flight cancellations. Delta stock fell 0.6%, while American and United shares each fell 1.3%.
Dec. 28 Airline Stock Performance, data by YCharts .
Weather-related stock declines like this are not very unusual for airline stocks. But while bad weather can have a modest impact on airline profits in any particular quarter, it isn't an important factor in determining any airline's long-term value. As a result, these weather incidents are often buying opportunities for airline stocks.
Cancellations soar
Airlines benefited from a mild start to the winter season in 2015, but weather conditions turned unfavorable just in time for the busy Christmas travel period. Cities in almost every region of the country -- but particularly the Midwest, the South, and the Northeast -- were affected by severe weather .
Saturday was the first day of the Christmas return travel period. That day, airlines canceled 506 flights in the U.S., while another 4,748 flights were delayed. A typical day has roughly 150 cancellations and 4,000 delays, according to FlightAware.
That was just a foretaste of what was to come. On Sunday, there were 1,638 cancellations and 6,395 delays in the United States. Monday was still worse, with 2,916 cancellations in the U.S., although "only" 5,421 flights were delayed.
American Airlines probably felt the largest impact of any airline, because it has big hubs in Dallas-Fort Worth and Chicago, two of the worst-hit cities. On Sunday, it canceled 462 mainline flights. Including regional flights, American probably accounted for at least 40% of Sunday's U.S. flight cancellations.
American Airlines felt the biggest winter storm impact this week. Image source: American Airlines.
On Monday, American Airlines was heavily affected again, with 352 mainline cancellations and 350 cancellations at its wholly owned regional subsidiary Envoy Air. (This doesn't include other regional airlines that operate flights for American Airlines.)
United Continental, which also has a hub in Chicago, was similarly affected, with 300 mainline cancellations. In total, more than 1,300 flights at Chicago's O'Hare Airport were called off, most of those being either American Airlines or United Airlines flights.
By comparison, Delta Air Lines wasn't badly affected. It reported only 3 mainline cancellations on Sunday and 11 mainline cancellations on Monday, despite operating a similar number of flights as American and United. To some extent, this can be explained by luck, as Delta's big hubs had more favorable weather. But Delta is far more reliable than American and United under any circumstances.
In the long run, it doesn't matter
From a long-term investing standpoint, weather-related cancellations don't have a measurable impact on airline stocks. A bad winter might cost an airline $0.05 or $0.10 in earnings per share during any particular year, but it wouldn't reduce its long-term earnings power.
More important factors such as fuel prices and the health of the U.S. economy point to airlines having another year of stellar profitability in 2016. As long as those two key tailwinds stay in place, investors can feel comfortable that airline stocks will bounce back from any weather-related dips.
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 Airline Stocks Fall on Bad Weather 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 - 2015 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.
|
Cancellations soar Airlines benefited from a mild start to the winter season in 2015, but weather conditions turned unfavorable just in time for the busy Christmas travel period. More important factors such as fuel prices and the health of the U.S. economy point to airlines having another year of stellar profitability in 2016. As long as those two key tailwinds stay in place, investors can feel comfortable that airline stocks will bounce back from any weather-related dips.
|
Shares of America's top three airlines -- American Airlines , Delta Air Lines , and United Continental -- slumped on Monday as severe weather ripped through the U.S., causing thousands of flight cancellations. 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.
|
Shares of America's top three airlines -- American Airlines , Delta Air Lines , and United Continental -- slumped on Monday as severe weather ripped through the U.S., causing thousands of flight cancellations. (This doesn't include other regional airlines that operate flights for American Airlines.) In total, more than 1,300 flights at Chicago's O'Hare Airport were called off, most of those being either American Airlines or United Airlines flights.
|
Shares of America's top three airlines -- American Airlines , Delta Air Lines , and United Continental -- slumped on Monday as severe weather ripped through the U.S., causing thousands of flight cancellations. Weather-related stock declines like this are not very unusual for airline stocks. (This doesn't include other regional airlines that operate flights for American Airlines.)
|
8143.0
|
2015-12-30 00:00:00 UTC
|
Nasdaq 100 Movers: AAL, STX
|
AAL
|
https://www.nasdaq.com/articles/nasdaq-100-movers-aal-stx-2015-12-30
|
nan
|
nan
|
In early trading on Wednesday, shares of Seagate Technology ( STX ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 1.4%. Year to date, Seagate Technology has lost about 43.4% of its value.
And the worst performing Nasdaq 100 component thus far on the day is American Airlines Group ( AAL ), trading down 1.5%. American Airlines Group is lower by about 20.1% looking at the year to date performance.
Two other components making moves today are Netflix ( NFLX ), trading down 1.4%, and Tesla Motors ( TSLA ), trading up 1.3% on the day.
VIDEO: Nasdaq 100 Movers: AAL, STX
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.
|
And the worst performing Nasdaq 100 component thus far on the day is American Airlines Group ( AAL ), trading down 1.5%. VIDEO: Nasdaq 100 Movers: AAL, STX 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 is lower by about 20.1% looking at the year to date performance.
|
And the worst performing Nasdaq 100 component thus far on the day is American Airlines Group ( AAL ), trading down 1.5%. VIDEO: Nasdaq 100 Movers: AAL, STX 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.
|
And the worst performing Nasdaq 100 component thus far on the day is American Airlines Group ( AAL ), trading down 1.5%. VIDEO: Nasdaq 100 Movers: AAL, STX 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 Wednesday, shares of Seagate Technology ( STX ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 1.4%.
|
And the worst performing Nasdaq 100 component thus far on the day is American Airlines Group ( AAL ), trading down 1.5%. VIDEO: Nasdaq 100 Movers: AAL, STX 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 Wednesday, shares of Seagate Technology ( STX ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 1.4%.
|
8144.0
|
2015-12-30 00:00:00 UTC
|
United Continental (UAL) Looks to Expand China-US Service
|
AAL
|
https://www.nasdaq.com/articles/united-continental-ual-looks-to-expand-china-us-service-2015-12-30
|
nan
|
nan
|
According to a report on AINonline, United Continental HoldingsUAL , the parent company of United Airlines,has announced that it intends to add more flights to China. The decision follows the obstacles encountered by the carrier pertaining to its service to India, owing to Middle East carriers relentlessly adding capacity.
We note that United Continental currently operates nonstop flights on a daily basis from New York to New Delhi and Mumbai in India. However, according to a businesstraveller report, the carrier won't expand its services further in India, in view of the excessive "unfair" competition originating from Middle East carriers.
United Continental, which already offers more non-stop flights to China compared to any other U.S. carrier, aims to expand further in the country despite its ongoing economic slowdown. Increased travel to and from China is the key factor driving the decision. Currently, San Francisco is the carrier's main hub for its Chinese service. However, the company plans to add more U.S. hubs in the future as it aims to expand its operations to secondary cities in China like Chengdu. We note that in September this year United Continental had announced plans to initiate non-stop weekly flights between San Francisco and Xi'an, from May 2016. We expect investor focus to remain on updates pertaining to United Continental's efforts to expand its Chinese footprint.
The roadblocks faced by United Continental with regard to its Indian operations, courtesy the overcapacity issues created by Middle East carriers, represents another episode in the ongoing tussle between some U.S. carriers and their Gulf counterparts. Earlier in the month, United Continental had announced that it will discontinue flights connecting Washington Dulles International Airport and Dubai from late Jan 2016.
Early this year, United Continental, along with American Airlines Group AAL and Delta Air Lines DAL , had complained to the Obama administration that the massive subsidies and other benefits enjoyed by the three Gulf airlines - Qatar Airways, Etihad Airways and Emirates - were unfair in nature and denied a level playing field to the American carriers.
To mitigate the threat posed by the Middle East carriers to its Indian operations, United Continental is looking to enter into a codeshare agreement with India's premier carrier, Air India, according to the AINonline report. Currently, United Continental has a codeshare pact with India's Jet Airways. However, with Etihad Airways being one of the stakeholders in Jet Airways, the future of the codeshare pact appears in doubt in the event of the deal with Air India materializing.
Zacks Rank
United Continental currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the airline space isAlaska Air Group ALK with 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
DELTA AIR LINES (DAL): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
Early this year, United Continental, along with American Airlines Group AAL and Delta Air Lines DAL , had complained to the Obama administration that the massive subsidies and other benefits enjoyed by the three Gulf airlines - Qatar Airways, Etihad Airways and Emirates - were unfair in nature and denied a level playing field to the American carriers. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. United Continental, which already offers more non-stop flights to China compared to any other U.S. carrier, aims to expand further in the country despite its ongoing economic slowdown.
|
Early this year, United Continental, along with American Airlines Group AAL and Delta Air Lines DAL , had complained to the Obama administration that the massive subsidies and other benefits enjoyed by the three Gulf airlines - Qatar Airways, Etihad Airways and Emirates - were unfair in nature and denied a level playing field to the American carriers. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. We note that in September this year United Continental had announced plans to initiate non-stop weekly flights between San Francisco and Xi'an, from May 2016.
|
Early this year, United Continental, along with American Airlines Group AAL and Delta Air Lines DAL , had complained to the Obama administration that the massive subsidies and other benefits enjoyed by the three Gulf airlines - Qatar Airways, Etihad Airways and Emirates - were unfair in nature and denied a level playing field to the American carriers. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. To mitigate the threat posed by the Middle East carriers to its Indian operations, United Continental is looking to enter into a codeshare agreement with India's premier carrier, Air India, according to the AINonline report.
|
Early this year, United Continental, along with American Airlines Group AAL and Delta Air Lines DAL , had complained to the Obama administration that the massive subsidies and other benefits enjoyed by the three Gulf airlines - Qatar Airways, Etihad Airways and Emirates - were unfair in nature and denied a level playing field to the American carriers. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. According to a report on AINonline, United Continental HoldingsUAL , the parent company of United Airlines,has announced that it intends to add more flights to China.
|
8145.0
|
2015-12-29 00:00:00 UTC
|
Flights in Chicago Hit by Weather Woes, Over 1600 Called Off
|
AAL
|
https://www.nasdaq.com/articles/flights-in-chicago-hit-by-weather-woes-over-1600-called-off-2015-12-29
|
nan
|
nan
|
Inclement weather conditions led to widespread flight cancellations in and around Chicago on Monday. Chicago O'Hare International Airport - one of the busiest airports in the world - has been affected the most by the extreme weather conditions.
Likewise, Chicago Midway International and Dallas/Fort Worth International Airports were the other two hubs which experienced a high number of cancellations and delays.
United Continental Holdings Inc. UAL has cancelled nearly 70 flights by 10 a.m. at Chicago O'Hare International Airport while Southwest Airlines Co. LUV called off 60 flights till noon. Likewise, American Airlines Group AAL cancelled nearly 88 departures on the same day.
As per data released by FlightAware.com, the U.S. airline industry witnessed 2,904 cancellations on Monday while 4,979 flights were delayed. Meanwhile, Trade group Airlines for America revealed that yesterday was one of the busiest Christmas travel days for the U.S. aviation industry after Jan 3 and Dec 18.
We believe that disruption of flights during peak festive seasons will certainly impact air traffic this month for most carriers.
Most Chicago-bound flights faced a similar crisis when Northeast snowstorm Cato significantly affected travel plans of a huge number of fliers last festive season. To counter the effect of the calamity, carriers like American Airlines and United Airlines waived off re-booking charges for fliers while Delta Air Lines Inc. DAL and JetBlue offered flexible travel plans to passengers.
We also expect these carriers to implement similar policies to manage this latest occurrence, which will again affect revenues for most 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
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.
|
Likewise, American Airlines Group AAL cancelled nearly 88 departures on the same day. 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, Trade group Airlines for America revealed that yesterday was one of the busiest Christmas travel days for the U.S. aviation industry after Jan 3 and Dec 18.
|
Likewise, American Airlines Group AAL cancelled nearly 88 departures on the same day. 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. United Continental Holdings Inc. UAL has cancelled nearly 70 flights by 10 a.m. at Chicago O'Hare International Airport while Southwest Airlines Co. LUV called off 60 flights till noon.
|
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. Likewise, American Airlines Group AAL cancelled nearly 88 departures on the same day. United Continental Holdings Inc. UAL has cancelled nearly 70 flights by 10 a.m. at Chicago O'Hare International Airport while Southwest Airlines Co. LUV called off 60 flights till noon.
|
Likewise, American Airlines Group AAL cancelled nearly 88 departures on the same day. 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.
|
8146.0
|
2015-12-24 00:00:00 UTC
|
Nasdaq 100 Movers: BIDU, ILMN
|
AAL
|
https://www.nasdaq.com/articles/nasdaq-100-movers-bidu-ilmn-2015-12-24
|
nan
|
nan
|
In early trading on Thursday, shares of Illumina ( ILMN ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 1.9%. Year to date, Illumina registers a 2.3% gain.
And the worst performing Nasdaq 100 component thus far on the day is Baidu ( BIDU ), trading down 1.0%. Baidu is lower by about 14.6% looking at the year to date performance.
Two other components making moves today are Incyte ( INCY ), trading down 1.0%, and American Airlines Group ( AAL ), trading up 1.4% on the day.
VIDEO: Nasdaq 100 Movers: BIDU, ILMN
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 Incyte ( INCY ), trading down 1.0%, and American Airlines Group ( AAL ), trading up 1.4% on the day. In early trading on Thursday, shares of Illumina ( ILMN ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 1.9%. And the worst performing Nasdaq 100 component thus far on the day is Baidu ( BIDU ), trading down 1.0%.
|
Two other components making moves today are Incyte ( INCY ), trading down 1.0%, and American Airlines Group ( AAL ), trading up 1.4% on the day. And the worst performing Nasdaq 100 component thus far on the day is Baidu ( BIDU ), trading down 1.0%. VIDEO: Nasdaq 100 Movers: BIDU, ILMN 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 Incyte ( INCY ), trading down 1.0%, and American Airlines Group ( AAL ), trading up 1.4% on the day. In early trading on Thursday, shares of Illumina ( ILMN ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 1.9%. And the worst performing Nasdaq 100 component thus far on the day is Baidu ( BIDU ), trading down 1.0%.
|
Two other components making moves today are Incyte ( INCY ), trading down 1.0%, and American Airlines Group ( AAL ), trading up 1.4% on the day. And the worst performing Nasdaq 100 component thus far on the day is Baidu ( BIDU ), trading down 1.0%. Baidu is lower by about 14.6% looking at the year to date performance.
|
8147.0
|
2015-12-24 00:00:00 UTC
|
How To YieldBoost AAL From 0.9% To 4.9% Using Options
|
AAL
|
https://www.nasdaq.com/articles/how-yieldboost-aal-09-49-using-options-2015-12-24
|
nan
|
nan
|
Shareholders of American Airlines Group Inc (Symbol: AAL) looking to boost their income beyond the stock's 0.9% annualized dividend yield can sell the January 2018 covered call at the $60 strike and collect the premium based on the $3.65 bid, which annualizes to an additional 4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost ), for a total of 4.9% annualized rate in the scenario where the stock is not called away. Any upside above $60 would be lost if the stock rises there and is called away, but AAL shares would have to climb 36.4% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 44.7% return from this trading level, in addition to any dividends collected before the stock was called.
In general, dividend amounts are not always predictable and tend to follow the ups and downs of profitability at each company. In the case of American Airlines Group Inc, looking at the dividend history chart for AAL below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 0.9% annualized dividend yield.
Below is a chart showing AAL's trailing twelve month trading history, with the $60 strike highlighted in red:
The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the January 2018 covered call at the $60 strike gives good reward for the risk of having given away the upside beyond $60. ( Do most options expire worthless? This and six other common options myths debunked ). We calculate the trailing twelve month volatility for American Airlines Group Inc (considering the last 252 trading day closing values as well as today's price of $43.90) to be 38%. For other call options contract ideas at the various different available expirations, visit the AAL Stock Options page of StockOptionsChannel.com.
In mid-afternoon trading on Thursday, the put volume among S&P 500 components was 355,622 contracts, with call volume at 674,197, for a put:call ratio of 0.53 so far for the day. Compared to the long-term median put:call ratio of .65, that represents very high call volume relative to puts; in other words, buyers are preferring calls in options trading so far today. Find out which 15 call and put options traders are talking about today .
Top YieldBoost Calls of the Nasdaq 100 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
Below is a chart showing AAL's trailing twelve month trading history, with the $60 strike highlighted in red: The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the January 2018 covered call at the $60 strike gives good reward for the risk of having given away the upside beyond $60. Shareholders of American Airlines Group Inc (Symbol: AAL) looking to boost their income beyond the stock's 0.9% annualized dividend yield can sell the January 2018 covered call at the $60 strike and collect the premium based on the $3.65 bid, which annualizes to an additional 4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost ), for a total of 4.9% annualized rate in the scenario where the stock is not called away. Any upside above $60 would be lost if the stock rises there and is called away, but AAL shares would have to climb 36.4% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 44.7% return from this trading level, in addition to any dividends collected before the stock was called.
|
Shareholders of American Airlines Group Inc (Symbol: AAL) looking to boost their income beyond the stock's 0.9% annualized dividend yield can sell the January 2018 covered call at the $60 strike and collect the premium based on the $3.65 bid, which annualizes to an additional 4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost ), for a total of 4.9% annualized rate in the scenario where the stock is not called away. Below is a chart showing AAL's trailing twelve month trading history, with the $60 strike highlighted in red: The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the January 2018 covered call at the $60 strike gives good reward for the risk of having given away the upside beyond $60. Any upside above $60 would be lost if the stock rises there and is called away, but AAL shares would have to climb 36.4% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 44.7% return from this trading level, in addition to any dividends collected before the stock was called.
|
Shareholders of American Airlines Group Inc (Symbol: AAL) looking to boost their income beyond the stock's 0.9% annualized dividend yield can sell the January 2018 covered call at the $60 strike and collect the premium based on the $3.65 bid, which annualizes to an additional 4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost ), for a total of 4.9% annualized rate in the scenario where the stock is not called away. Any upside above $60 would be lost if the stock rises there and is called away, but AAL shares would have to climb 36.4% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 44.7% return from this trading level, in addition to any dividends collected before the stock was called. In the case of American Airlines Group Inc, looking at the dividend history chart for AAL below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 0.9% annualized dividend yield.
|
Shareholders of American Airlines Group Inc (Symbol: AAL) looking to boost their income beyond the stock's 0.9% annualized dividend yield can sell the January 2018 covered call at the $60 strike and collect the premium based on the $3.65 bid, which annualizes to an additional 4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost ), for a total of 4.9% annualized rate in the scenario where the stock is not called away. For other call options contract ideas at the various different available expirations, visit the AAL Stock Options page of StockOptionsChannel.com. Any upside above $60 would be lost if the stock rises there and is called away, but AAL shares would have to climb 36.4% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 44.7% return from this trading level, in addition to any dividends collected before the stock was called.
|
8148.0
|
2015-12-24 00:00:00 UTC
|
GOL Linhas Sinks to 52-Week Low on Weak November Traffic
|
AAL
|
https://www.nasdaq.com/articles/gol-linhas-sinks-to-52-week-low-on-weak-november-traffic-2015-12-24
|
nan
|
nan
|
Shares of Latin-American carrier GOL Linhas Aereas Inteligentes S.A. ( GOL ) plunged to a 52-week low of 57 cents per share on Dec 23, eventually closing at 59 cents, following dismal November traffic data unveiled late last week. In fact, the carrier has put up a dismal show in 2015. No wonder, shares of the company have shed over 89% year to date.
What Ails GOL?
GOL Linhas has been primarily plagued by the deepening economic crisis in Brazil, weak commodity prices and an adverse currency movement. Last week, the carrier unveiled lackluster traffic data for the month of November. Traffic declined 11% on a 4.5% capacity contraction. Another important metric, load factor (percentage of seats filled by passengers) fell to 73.2% from 78.5% recorded in Nov 2014.
The carrier's performance in the third quarter of 2015 was also disappointing. Quarterly loss of $2.13 per share was significantly wider than the Zacks Consensus Estimate of a loss of 28 cents. The carrier also reported lower than expected revenues in the quarter. Results were hurt by the prevalent economic woes as well as foreign currency headwinds, owing to the strengthening of the U.S. dollar against the Brazilian real.
In fact, not GOL alone, other Latin American carriers like Copa Holdings CPA too are experiencing tough times. A report released by the International Air Transport Association (IATA) further indicates the struggle that Latin American carriers are undergoing. In 2015, the carriers from the region are expected to incur losses to the tune of 300 million. The outlook for 2016 is not very encouraging either, although it is a tad better. The Latin American carriers are expected to contribute only $400 million to the overall estimated annual profit of $36.3 billion for the airline industry in 2016.
In view of the above difficulties and the disappointing outlook, it is best to stay away from GOL at the moment. The Zacks Rank #4 (Sell) held by the company seems to suggest the same.
Stocks to Consider
Given the troubles facing Latin American carriers, investors interested in the airline space may instead consider U.S.-based stocks like American Airlines Group AAL and Alaska Air Group ALK . Both the stocks carry 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
COPA HLDGS SA-A (CPA): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
Stocks to Consider Given the troubles facing Latin American carriers, investors interested in the airline space may instead consider U.S.-based stocks like American Airlines Group AAL and Alaska Air Group ALK . Click to get this free report GOL LINHAS-ADR (GOL): Free Stock Analysis Report COPA HLDGS SA-A (CPA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. GOL Linhas has been primarily plagued by the deepening economic crisis in Brazil, weak commodity prices and an adverse currency movement.
|
Stocks to Consider Given the troubles facing Latin American carriers, investors interested in the airline space may instead consider U.S.-based stocks like American Airlines Group AAL and Alaska Air Group ALK . Click to get this free report GOL LINHAS-ADR (GOL): Free Stock Analysis Report COPA HLDGS SA-A (CPA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
Stocks to Consider Given the troubles facing Latin American carriers, investors interested in the airline space may instead consider U.S.-based stocks like American Airlines Group AAL and Alaska Air Group ALK . Click to get this free report GOL LINHAS-ADR (GOL): Free Stock Analysis Report COPA HLDGS SA-A (CPA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Shares of Latin-American carrier GOL Linhas Aereas Inteligentes S.A. ( GOL ) plunged to a 52-week low of 57 cents per share on Dec 23, eventually closing at 59 cents, following dismal November traffic data unveiled late last week.
|
Stocks to Consider Given the troubles facing Latin American carriers, investors interested in the airline space may instead consider U.S.-based stocks like American Airlines Group AAL and Alaska Air Group ALK . Click to get this free report GOL LINHAS-ADR (GOL): Free Stock Analysis Report COPA HLDGS SA-A (CPA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Shares of Latin-American carrier GOL Linhas Aereas Inteligentes S.A. ( GOL ) plunged to a 52-week low of 57 cents per share on Dec 23, eventually closing at 59 cents, following dismal November traffic data unveiled late last week.
|
8149.0
|
2015-12-24 00:00:00 UTC
|
Canadian Pacific Bid Fails to Satisfy Norfolk Southern Again
|
AAL
|
https://www.nasdaq.com/articles/canadian-pacific-bid-fails-to-satisfy-norfolk-southern-again-2015-12-24
|
nan
|
nan
|
Calgary, Canada-based railroad operator Canadian Pacific Railway Limited CP was left disappointed when Norfolk Southern Corporation NSC turned down the former's buyout offer yet again. The Norfolk, VA-based railroad operator stuck to its earlier stance while rejecting Canadian Pacific's latest offer, asserting that even the sweetened cash and stock offer is "grossly inadequate" and significantly undervalues the company.
Canadian Pacific's latest buyout bid made on Dec 16 stated that shareholders of Norfolk Southern can receive $32.86 in cash and 0.451 share of stock in the combined entity apart from 0.451 of a contingent value right (which will have a maximum value of $25) in exchange of each of the company's shares. A contingent value right refers to a highly liquid instrument that enables the holders to convert to cash at their discretion. However, Norfolk Southern, after a thorough review of the revised bid, concluded that the CVR will be of no help in protecting the interests of its shareholders as it is likely to "trade at a significant discount".
NorfolkSouthern still believes that the deal, even after the latest offer made, has very little chances of gaining regulatory approval in a review process that could well extend to two years or more. A long and tedious process would significantly disrupt regular operations at the company. Norfolk Southern, which has constantly been accused by Canadian Pacific, of not wanting to discuss the bid with the latter, stated in its defense that there is no reason on its part for doing so unless the Canadian company finds a way out to address the regulatory risks associated with the offer.
Faced with rejection yet again, Canadian Pacific has now stated that it will evaluate strategic alternatives. Many market watchers believe that the company will not sweeten its offer any further to get a positive response from Norfolk Southern. Regardless of the final outcome, we expect investors to keep an eye on updates pertaining to the issue.
Zacks Rank
Canadian Pacific carries a Zacks Rank #4 (Sell) while Norfolk Southern is a Zacks Rank #3 (Hold) stock. Better-ranked stocks in the broader transportation sector include American Airlines Group AAL and Alaska Air Group ALK . Both the stocks carry 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
NORFOLK SOUTHRN (NSC): Free Stock Analysis Report
CDN PAC RLWY (CP): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
Better-ranked stocks in the broader transportation sector include American Airlines Group AAL and Alaska Air Group ALK . Click to get this free report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Calgary, Canada-based railroad operator Canadian Pacific Railway Limited CP was left disappointed when Norfolk Southern Corporation NSC turned down the former's buyout offer yet again.
|
Click to get this free report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Better-ranked stocks in the broader transportation sector include American Airlines Group AAL and Alaska Air Group ALK . Canadian Pacific's latest buyout bid made on Dec 16 stated that shareholders of Norfolk Southern can receive $32.86 in cash and 0.451 share of stock in the combined entity apart from 0.451 of a contingent value right (which will have a maximum value of $25) in exchange of each of the company's shares.
|
Click to get this free report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Better-ranked stocks in the broader transportation sector include American Airlines Group AAL and Alaska Air Group ALK . The Norfolk, VA-based railroad operator stuck to its earlier stance while rejecting Canadian Pacific's latest offer, asserting that even the sweetened cash and stock offer is "grossly inadequate" and significantly undervalues the company.
|
Better-ranked stocks in the broader transportation sector include American Airlines Group AAL and Alaska Air Group ALK . Click to get this free report NORFOLK SOUTHRN (NSC): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. The Norfolk, VA-based railroad operator stuck to its earlier stance while rejecting Canadian Pacific's latest offer, asserting that even the sweetened cash and stock offer is "grossly inadequate" and significantly undervalues the company.
|
8150.0
|
2015-12-22 00:00:00 UTC
|
The Zacks Analyst Blog Highlights: JetBlue Airways, United Continental Holdings, American Airlines Group, Volaris and Delta Air Lines
|
AAL
|
https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-jetblue-airways-united-continental-holdings-american
|
nan
|
nan
|
For Immediate Release
Chicago, IL - December 22, 2015 - 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 JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ), American Airlines Group ( AAL ), Volaris ( VLRS ) and Delta Air Lines, Inc. ( DAL ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Monday's Analyst Blog:
Following Cuba, New Treaty to Open Up Mexico-U.S. Air Routes?
On Dec 18, the US Department of Transportation announced the signing of 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 has already won approval from the U.S. government but needs to be ratified by the Mexican senate before it goes into effect.
What's the Deal About?
The new aviation treaty, inked in Washington, is designed to remove the restrictions on the two countries, existing as per the current deal. This will allow freedom to the carriers to operate on any route (with limitless frequency) of their choice between the neighboring countries. The liberalized deal, once operational, will do away with the existing framework that allows only a handful of carriers from each country on about 30 specified routes between the nations.
With competition likely to intensify across the cross-border routes, once operational, the deal should help make airfares across the routes more pocket friendly. This is reason enough for fliers to welcome the deal with open arms. Carriers will have the liberty to set prices for flights connecting cities in the U.S. and Mexico, as per the new deal.
The enhanced freedom under the new deal will allow both countries to designate at least two or three airlines to operate on a particular route. Traffic should get a boost once the deal becomes operational.
Needless to say, the landmark deal, once effective, should prove highly beneficial for U.S. and Mexican carriers, and find favor with flyers as well. We believe this will also help strengthen the commercial and economic relationship between the two countries. We note, in this regard, that Mexico was one of the few countries with which the U.S. did not have a modernized air treaty.
Deal Unlikely to be Operational from New Year's Day?
The new deal, which was originally scheduled to come into effect from Jan 1, 2016, is unlikely to be ratified by the Mexican senate so soon, according to a report appearing in ATW. The report suggests that the Mexican clearance, however, should be in place by Mar 31, 2016.
The report highlights that certain mismatch between the Spanish translated version of the deal and the original English one is one of the main reasons for the delay. Reconciliation across the versions, which is necessary for the deal to see the light of the day, was in progress between both the governments for multiple months, which ate up a lot of time. A report appearing in the Wall Street Journal (WSJ) suggests that the Mexican senate might ratify the new aviation treaty in February when the legislators are scheduled to deliberate on the issue.
Although the new deal promises carriers to ample operational freedom across the border, some hurdles remain, according to the WSJ report. The report suggests that certain airports like the Benito Juárez International Airport in Mexico City are already very congested and do not have the required number of additional slots (appointments pertaining to takeoff and landing) to allow for such unrestricted travel.
Consequently, airports with limited number of slots might still remain inaccessible for carriers who do not currently operate on the concerned route. It would be interesting to see how the concerned airports tackle the issue pertaining to the availability of slots once the deal becomes operational.
Carriers to Benefit
The deal has been warmly welcomed by carriers in both the countries. Carriers like JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ), American Airlines Group ( AAL ), Aeromexico and Controladora Vuela Compañía de Aviación, S.A.B. de C.V. or Volaris ( VLRS ) hold the tentative deal in positive light.
Long Island City, NY-based low-cost carrier JetBlue Airways has an extensive Latin American presence and has been offering air service to Mexico since 2006. The carrier currently operates flights connecting Cancún and Mexico City with various U.S. destinations like Boston, Fort Lauderdale-Hollywood, New York-JFK and Orlando. No wonder the carrier is so enthusiastic about the deal, as it will open up avenues for it to enter Mexican cities that were previously prohibited.
According to WSJ report, Fort Worth, TX-based American Airlines is the leading U.S. carrier to Latin America. The carrier aims to improve its service to Mexico further following the materialization of the deal. United Continental, another carrier to welcome the deal, too has a sound Mexican presence.
The liberalized air treaty has also found favor with Atlanta-based Delta Air Lines, Inc. ( DAL ). Last month, the carrier announced its intention to increase its stake in Mexico's largest airline, Grupo Aeromexico S.A.B. de C.V. Delta aims to more than double its current holding in the Mexican carrier.
We note that the timing of the deal too is favorable given that carriers in both nations are witnessing good times, courtesy of the weak oil environment. In such a favorable backdrop, all eyes will remain on when the treaty actually comes into effect and its resultant benefits for carriers.
US-Cuba Deal Also in Focus
The U.S.-Mexico treaty comes close on the heels of the former's deal with Cuba. According to a Reuters report, the U.S. signed an aviation deal with Cuba to allow 110 scheduled flights on a daily basis to the island. Diplomatic ties between the two countries were severed by the U.S. in 1961. We note that President Obama had called for the restoration of diplomatic ties with Cuba, a favorite tourist spot for Americans prior to the embargo, exactly a year-ago.
Direct flights between the two nations won't resume immediately; however, the concerned parties are working to get the deal operational next year.
We expect investor focus to remain on updates pertaining to both the Cuba and Mexico deals, going forward.
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
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
CONTROLADORA VL (VLRS): 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.
|
Stocks recently featured in the blog include JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ), American Airlines Group ( AAL ), Volaris ( VLRS ) and Delta Air Lines, Inc. ( DAL ). Carriers like JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ), American Airlines Group ( AAL ), Aeromexico and Controladora Vuela Compañía de Aviación, S.A.B. Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report CONTROLADORA VL (VLRS): 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 JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ), American Airlines Group ( AAL ), Volaris ( VLRS ) and Delta Air Lines, Inc. ( DAL ). Carriers like JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ), American Airlines Group ( AAL ), Aeromexico and Controladora Vuela Compañía de Aviación, S.A.B. Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report CONTROLADORA VL (VLRS): 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 JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report CONTROLADORA VL (VLRS): 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 JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ), American Airlines Group ( AAL ), Volaris ( VLRS ) and Delta Air Lines, Inc. ( DAL ). Carriers like JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ), American Airlines Group ( AAL ), Aeromexico and Controladora Vuela Compañía de Aviación, S.A.B.
|
Stocks recently featured in the blog include JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ), American Airlines Group ( AAL ), Volaris ( VLRS ) and Delta Air Lines, Inc. ( DAL ). Carriers like JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ), American Airlines Group ( AAL ), Aeromexico and Controladora Vuela Compañía de Aviación, S.A.B. Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report CONTROLADORA VL (VLRS): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
8151.0
|
2015-12-22 00:00:00 UTC
|
1 Piece of Great News for Spirit Airlines Incorporated
|
AAL
|
https://www.nasdaq.com/articles/1-piece-great-news-spirit-airlines-incorporated-2015-12-22
|
nan
|
nan
|
After years of outperformance, shares of Spirit Airlines have taken a big step backward this year, losing nearly half of their value.
Spirit Airlines YTD Stock Performance, data by YCharts
Investors have lost confidence in Spirit's profit growth trajectory as its unit revenue has plummeted during 2015. However, Spirit Airlines bears appear to be missing one key factor that bodes well for the company's performance in 2016 and beyond: rising airline industry load factors.
Price-matching has become a problem
In recent years, Spirit Airlines has benefited from other airlines' attempts to shore up their unit revenue by tightly managing capacity and raising fares whenever possible. Spirit's dramatically lower unit costs have allowed it to undercut the fares of major airlines like American Airlines , Delta Air Lines , United Continental , and Southwest Airlines .
Because Spirit Airlines only operates one or two flights a day on most of its routes, it doesn't steal that many passengers from its rivals when it enters new markets. As a result, other airlines have mainly ignored Spirit's growth rather than trying to defend their market share with price-matching policies.
Or rather, that was the case until 2015. Price-matching has become increasingly common this year, though. American Airlines has been particularly blunt about its plans to compete on price even with the likes of Spirit Airlines. Delta Air Lines created a new fare type to match Spirit's prices. Southwest Airlines now regularly offers one-way fares as low as $41 -- $25 before taxes and fees -- on many routes. United Continental has also started matching more budget carrier fares.
Many big carriers have started aggressively matching Spirit's fares. Photo: American Airlines
The result of this increasingly aggressive price-matching by larger rivals is that Spirit Airlines' unit revenue fell 14.4% year over year in the first nine months of 2015. The pace of the unit revenue declines has actually accelerated over the course of the year.
The paradox of price-matching
The odd thing about the pricing pressure Spirit Airlines has faced this year is that it has a huge cost advantage over American, Delta, and United: so much so that Spirit's average fare doesn't come close to covering their unit costs. Spirit has a considerable cost advantage over Southwest Airlines as well.
It may seem strange that rival airlines are so eager to match fares that are below their average cost per seat. The key to understanding this behavior is to look at changes in load factor: the percentage of seats sold to paying customers.
Spirit Airlines has much lower unit costs than the legacy carriers. Photo: Spirit Airlines
It's quite rational for an airline to sell some seats below cost if those seats would otherwise go empty. That's what the top four airlines have been doing to combat Spirit's growth. During lower-demand periods when they would normally have more empty seats, they are slashing fares. This stimulates demand and allows these airlines to fill up their planes.
Planes are getting fuller
This trend has been a significant headwind for Spirit Airlines this year. The good news for Spirit is that while it may make sense for other airlines to sell seats below cost if they would otherwise go empty, it doesn't make sense for them to add seats (by buying more planes, for example) that they would have to sell below cost.
This means that as the existing inventory of seats gets closer to being filled, other airlines will have less and less of an incentive to match Spirit Airlines' fares. We are quickly reaching that point.
Last month, American Airlines' domestic mainline load factor increased to 85.1% from 80.8% a year earlier. At Delta, domestic mainline load factor hit 86.7%, up from 83.6% in November 2014. United's domestic mainline load factor rose to 85.5% from 82.3%, while Southwest's load factor rose to 83.2% from 80.1%.
All of the major airlines have reported soaring load factors recently. Photo: The Motley Fool
It was much the same in October, another off-peak month. American's domestic mainline load factor increased from 84.6% to 88.3%. At Delta, domestic mainline load factor rose to 88.8% from 86.4% a year earlier. United's domestic mainline load factor rose from 84% to 87.3%. Finally, Southwest's load factor reached 85.9%, up from 83.1%.
With these big load factor increases, planes are now nearly as packed in off-peak months as the 86%-88% load factors typically seen during the peak months of June, July, and August.
It's impossible to put an exact upper limit on how high load factors could go, but it's certainly not 100%. As an airline's load factor rises, more and more flights sell out. That raises the risk of missing out on last-minute bookings from high-paying business travelers. (If the airline instead "overbooks" a flight, it might have to offer $300 or more in compensation to someone who bought a ticket for less than $100.)
Thus, the major airlines probably don't have much room to profitably increase their load factors further. That in turn means that the fare environment for Spirit Airlines is probably already close to bottoming out. If the company can show in 2016 that its unit revenue is stabilizing -- while unit costs continue to fall -- Spirit Airlines stock is likely to bounce back from its big drop.
3 Companies Poised to Explode When Cable Dies
Cable is dying. And there are 3 stocks that are poised to explode when this faltering $2.2 trillion industry finally bites the dust. Just like newspaper publishers, telephone utilities, stockbrokers, record companies, bookstores, travel agencies, and big box retailers did when the Internet swept away their business models. And when cable falters, you don't want to miss out on these 3 companies that are positioned to benefit. Click here for their names. Hint: They'renot the ones you'd think!
The article 1 Piece of Great News for Spirit Airlines Incorporated 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, long March 2016 $40 calls on Spirit Airlines, 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 - 2015 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.
|
Because Spirit Airlines only operates one or two flights a day on most of its routes, it doesn't steal that many passengers from its rivals when it enters new markets. The paradox of price-matching The odd thing about the pricing pressure Spirit Airlines has faced this year is that it has a huge cost advantage over American, Delta, and United: so much so that Spirit's average fare doesn't come close to covering their unit costs. Just like newspaper publishers, telephone utilities, stockbrokers, record companies, bookstores, travel agencies, and big box retailers did when the Internet swept away their business models.
|
Spirit's dramatically lower unit costs have allowed it to undercut the fares of major airlines like American Airlines , Delta Air Lines , United Continental , and Southwest Airlines . Photo: American Airlines The result of this increasingly aggressive price-matching by larger rivals is that Spirit Airlines' unit revenue fell 14.4% year over year in the first nine months of 2015. 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, long March 2016 $40 calls on Spirit Airlines, and long June 2016 $30 calls on Spirit Airlines.
|
However, Spirit Airlines bears appear to be missing one key factor that bodes well for the company's performance in 2016 and beyond: rising airline industry load factors. Spirit's dramatically lower unit costs have allowed it to undercut the fares of major airlines like American Airlines , Delta Air Lines , United Continental , and Southwest Airlines . 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, long March 2016 $40 calls on Spirit Airlines, and long June 2016 $30 calls on Spirit Airlines.
|
Photo: American Airlines The result of this increasingly aggressive price-matching by larger rivals is that Spirit Airlines' unit revenue fell 14.4% year over year in the first nine months of 2015. The paradox of price-matching The odd thing about the pricing pressure Spirit Airlines has faced this year is that it has a huge cost advantage over American, Delta, and United: so much so that Spirit's average fare doesn't come close to covering their unit costs. Finally, Southwest's load factor reached 85.9%, up from 83.1%.
|
8152.0
|
2015-12-21 00:00:00 UTC
|
Nasdaq 100 Movers: CMCSA, AAL
|
AAL
|
https://www.nasdaq.com/articles/nasdaq-100-movers-cmcsa-aal-2015-12-21
|
nan
|
nan
|
In early trading on Monday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 2.7%. Year to date, American Airlines Group has lost about 21.3% of its value.
And the worst performing Nasdaq 100 component thus far on the day is Comcast ( CMCSA ), trading down 1.7%. Comcast is lower by about 4.4% looking at the year to date performance.
Two other components making moves today are BioMarin Pharmaceutical ( BMRN ), trading down 1.1%, and Staples ( SPLS ), trading up 2.6% on the day.
VIDEO: Nasdaq 100 Movers: CMCSA, 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 Monday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 2.7%. VIDEO: Nasdaq 100 Movers: CMCSA, AAL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. And the worst performing Nasdaq 100 component thus far on the day is Comcast ( CMCSA ), trading down 1.7%.
|
In early trading on Monday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 2.7%. VIDEO: Nasdaq 100 Movers: CMCSA, AAL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Year to date, American Airlines Group has lost about 21.3% of its value.
|
In early trading on Monday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 2.7%. VIDEO: Nasdaq 100 Movers: CMCSA, AAL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. And the worst performing Nasdaq 100 component thus far on the day is Comcast ( CMCSA ), trading down 1.7%.
|
In early trading on Monday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 2.7%. VIDEO: Nasdaq 100 Movers: CMCSA, AAL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. And the worst performing Nasdaq 100 component thus far on the day is Comcast ( CMCSA ), trading down 1.7%.
|
8153.0
|
2015-12-21 00:00:00 UTC
|
American Airlines' Profit May Rise in 2016 After All
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-profit-may-rise-2016-after-all-2015-12-21
|
nan
|
nan
|
Through the first nine months of 2015, American Airlines ' profit soared 62% year over year to $5 billion. Yet the stock has declined more than 20% this year and trades for less than seven times forward earnings.
American Airlines YTD Stock Performance, data by YCharts .
American Airlines stock finally seemed to be gaining momentum during October. However, its rally quickly fell apart after CEO Doug Parker suggested during American's Q3earnings callthat the company might have earned an "artificially high" profit margin in 2015 due to the steep drop in fuel prices -- and thus, its profit margin might fall in 2016.
American Airlines stock has slumped more than 10% since Parker made those comments. However, it's looking less and less likely that American Airlines' profit margin will fall in 2016. As a result, its stock could rebound next year.
Fuel prices keep falling
Doug Parker's comment about the possibility of falling margins in 2016 was premised on the fact that oil prices had fallen about 50% in the past year. This sudden drop in airlines' biggest cost item led to faster capacity growth and a corresponding reduction in fares -- but not right away. In 2016, Parker expected the industry to face a full year of lower fares without the benefit of another drop in fuel prices -- hence a decline in margins.
However, oil prices have moved even lower in the past two months. The price of Brent crude oil for delivery in February has fallen from around $50/barrel in late October to less than $37/barrel at the end of last week. Looking out to December 2016, the price of Brent has fallen from $55/barrel in late October to around $44/barrel today.
Meanwhile, the El Nino weather pattern has led to unseasonably warm temperatures. This has reduced demand for heating oil, which is fairly similar to jet fuel.
As a result, jet fuel prices have fallen even faster than crude oil prices . The price of Gulf Coast jet fuel fell below the $1.00/gallon mark last Monday for the first time since 2004. That's down by nearly $0.40/gallon from Oct. 23 when Parker made his comments about 2016 margins.
This is a potential game-changer
American Airlines consumes more than 4 billion gallons of jet fuel annually. That means a $0.30-$0.40/gallon reduction in jet fuel prices represents about $1.5 billion in annual cost savings and a roughly 3%-4% margin tailwind.
American Airlines' fuel costs are on pace to plunge again in 2016. Photo: American Airlines.
That's probably the difference between expanding margins and contracting margins in 2016. During the first half of the year, American's unit revenue will probably continue to fall, but it could benefit from fuel cost savings of $0.60-$0.70/gallon relative to the $1.87/gallon it paid in the first half of 2015.
In the second half of 2016, American Airlines' fuel savings will probably be lower. But by then, the company's nonfuel unit costs should be flat or declining as the company starts to reduce its headcount following a successful integration effort.
American Airlines will be able to unlock merger synergies in 2016. Photo: American Airlines.
More importantly, unit revenue could start to rebound by that point. Easier year-over-year comparisons will certainly help. Additionally, the reservation system integration completed in October will allow American Airlines to start optimizing its flight schedule and refining its revenue management techniques over the next few quarters.
Furthermore, American will roll out a new fare type aimed at price-sensitive travelers sometime next year. This should reduce the financial impact of matching budget carriers' prices. Finally, the Olympics in Rio de Janeiro will boost travel demand to and from Brazil -- a key market for American Airlines that has been very weak recently.
This stock is too cheap
American Airlines' rock-bottom earnings multiple -- less than seven times a very conservative estimate of 2016 EPS -- implies that investors are very skeptical about its ability to maintain (let alone grow) its earnings in 2016 and beyond.
American Airlines is using this opportunity to buy back tons of stock. Through the first three-quarters of 2015, the company spent $2.5 billion on share repurchases, and it currently plans to buy back another $3.5 billion of stock by the end of 2016.
These buybacks are driving a sharp reduction in American Airlines' share count, accelerating its EPS growth. This EPS growth will probably lead to a higher earnings multiple eventually -- rewarding patient investors.
3 Companies Poised to Explode When Cable Dies
Cable is dying. And there are 3 stocks that are poised to explode when this faltering $2.2 trillion industry finally bites the dust. Just like newspaper publishers, telephone utilities, stockbrokers, record companies, bookstores, travel agencies, and big box retailers did when the Internet swept away their business models. And when cable falters, you don't want to miss out on these 3 companies that are positioned to benefit. Click here for their names. Hint: They'renot the ones you'd think!
The article American Airlines' Profit May Rise in 2016 After All originally appeared on Fool.com.
Adam Levine-Weinberg 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 - 2015 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.
|
Additionally, the reservation system integration completed in October will allow American Airlines to start optimizing its flight schedule and refining its revenue management techniques over the next few quarters. Finally, the Olympics in Rio de Janeiro will boost travel demand to and from Brazil -- a key market for American Airlines that has been very weak recently. Just like newspaper publishers, telephone utilities, stockbrokers, record companies, bookstores, travel agencies, and big box retailers did when the Internet swept away their business models.
|
Fuel prices keep falling Doug Parker's comment about the possibility of falling margins in 2016 was premised on the fact that oil prices had fallen about 50% in the past year. As a result, jet fuel prices have fallen even faster than crude oil prices . The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
Through the first nine months of 2015, American Airlines ' profit soared 62% year over year to $5 billion. However, its rally quickly fell apart after CEO Doug Parker suggested during American's Q3earnings callthat the company might have earned an "artificially high" profit margin in 2015 due to the steep drop in fuel prices -- and thus, its profit margin might fall in 2016. Fuel prices keep falling Doug Parker's comment about the possibility of falling margins in 2016 was premised on the fact that oil prices had fallen about 50% in the past year.
|
Through the first nine months of 2015, American Airlines ' profit soared 62% year over year to $5 billion. In 2016, Parker expected the industry to face a full year of lower fares without the benefit of another drop in fuel prices -- hence a decline in margins. As a result, jet fuel prices have fallen even faster than crude oil prices .
|
8154.0
|
2015-12-21 00:00:00 UTC
|
Following Cuba, New Treaty to Open Up Mexico-US Air Routes?
|
AAL
|
https://www.nasdaq.com/articles/following-cuba-new-treaty-to-open-up-mexico-us-air-routes-2015-12-21
|
nan
|
nan
|
On Dec 18, the US Department of Transportation announced the signing of 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 has already won approval from the U.S. government but needs to be ratified by the Mexican senate before it goes into effect.
What's the Deal About?
The new aviation treaty, inked in Washington, is designed to remove the restrictions on the two countries, existing as per the current deal. This will allow freedom to the carriers to operate on any route (with limitless frequency) of their choice between the neighboring countries. The liberalized deal, once operational, will do away with the existing framework that allows only a handful of carriers from each country on about 30 specified routes between the nations.
With competition likely to intensify across the cross-border routes, once operational, the deal should help make airfares across the routes more pocket friendly. This is reason enough for fliers to welcome the deal with open arms. Carriers will have the liberty to set prices for flights connecting cities in the U.S. and Mexico, as per the new deal.
The enhanced freedom under the new deal will allow both countries to designate at least two or three airlines to operate on a particular route. Traffic should get a boost once the deal becomes operational.
Needless to say, the landmark deal, once effective, should prove highly beneficial for U.S. and Mexican carriers, and find favor with flyers as well. We believe this will also help strengthen the commercial and economic relationship between the two countries. We note, in this regard, that Mexico was one of the few countries with which the U.S. did not have a modernized air treaty.
Deal Unlikely to be Operational from New Year's Day?
The new deal, which was originally scheduled to come into effect from Jan 1, 2016, is unlikely to be ratified by the Mexican senate so soon, according to a report appearing in ATW. The report suggests that the Mexican clearance, however, should be in place by Mar 31, 2016.
The report highlights that certain mismatch between the Spanish translated version of the deal and the original English one is one of the main reasons for the delay. Reconciliation across the versions, which is necessary for the deal to see the light of the day, was in progress between both the governments for multiple months, which ate up a lot of time. A report appearing in the Wall Street Journal (WSJ) suggests that the Mexican senate might ratify the new aviation treaty in February when the legislators are scheduled to deliberate on the issue.
Although the new deal promises carriers to ample operational freedom across the border, some hurdles remain, according to the WSJ report. The report suggests that certain airports like the Benito Juárez International Airport in Mexico City are already very congested and do not have the required number of additional slots (appointments pertaining to takeoff and landing) to allow for such unrestricted travel.
Consequently, airports with limited number of slots might still remain inaccessible for carriers who do not currently operate on the concerned route. It would be interesting to see how the concerned airports tackle the issue pertaining to the availability of slots once the deal becomes operational.
Carriers to Benefit
The deal has been warmly welcomed by carriers in both the countries. Carriers like JetBlue Airways JBLU , United Continental Holdings UAL , American Airlines Group AAL , Aeromexico and Controladora Vuela Compañía de Aviación, S.A.B. de C.V. or Volaris VLRS hold the tentative deal in positive light.
Long Island City, NY-based low-cost carrier JetBlue Airways has an extensive Latin American presence and has been offering air service to Mexico since 2006. The carrier currently operates flights connecting Cancún and Mexico City with various U.S. destinations like Boston, Fort Lauderdale-Hollywood, New York-JFK and Orlando. No wonder the carrier is so enthusiastic about the deal, as it will open up avenues for it to enter Mexican cities that were previously prohibited.
According to WSJ report, Fort Worth, TX-based American Airlines is the leading U.S. carrier to Latin America. The carrier aims to improve its service to Mexico further following the materialization of the deal. United Continental, another carrier to welcome the deal, too has a sound Mexican presence.
The liberalized air treaty has also found favor with Atlanta, GA-based Delta Air Lines, Inc. DAL . Last month, the carrier announced its intention to increase its stake in Mexico's largest airline, Grupo Aeromexico S.A.B. de C.V. Delta aims to more than double its current holding in the Mexican carrier.
We note that the timing of the deal too is favorable given that carriers in both nations are witnessing good times, courtesy of the weak oil environment. In such a favorable backdrop, all eyes will remain on when the treaty actually comes into effect and its resultant benefits for carriers.
US-Cuba Deal Also in Focus
The U.S.-Mexico treaty comes close on the heels of the former's deal with Cuba. According to a Reuters report, the U.S. signed an aviation deal with Cuba to allow 110 scheduled flights on a daily basis to the island. Diplomatic ties between the two countries were severed by the U.S. in 1961. We note that President Obama had called for the restoration of diplomatic ties with Cuba, a favorite tourist spot for Americans prior to the embargo, exactly a year-ago.
Direct flights between the two nations won't resume immediately; however, the concerned parties are working to get the deal operational next year.
We expect investor focus to remain on updates pertaining to both the Cuba and Mexico deals, going forward.
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
CONTROLADORA VL (VLRS): 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 like JetBlue Airways JBLU , United Continental Holdings UAL , American Airlines Group AAL , Aeromexico and Controladora Vuela Compañía de Aviación, S.A.B. 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 CONTROLADORA VL (VLRS): Free Stock Analysis Report To read this article on Zacks.com click here. A report appearing in the Wall Street Journal (WSJ) suggests that the Mexican senate might ratify the new aviation treaty in February when the legislators are scheduled to deliberate on the issue.
|
Carriers like JetBlue Airways JBLU , United Continental Holdings UAL , American Airlines Group AAL , Aeromexico and Controladora Vuela Compañía de Aviación, S.A.B. 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 CONTROLADORA VL (VLRS): 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 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 CONTROLADORA VL (VLRS): Free Stock Analysis Report To read this article on Zacks.com click here. Carriers like JetBlue Airways JBLU , United Continental Holdings UAL , American Airlines Group AAL , Aeromexico and Controladora Vuela Compañía de Aviación, S.A.B. The liberalized deal, once operational, will do away with the existing framework that allows only a handful of carriers from each country on about 30 specified routes between the nations.
|
Carriers like JetBlue Airways JBLU , United Continental Holdings UAL , American Airlines Group AAL , Aeromexico and Controladora Vuela Compañía de Aviación, S.A.B. 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 CONTROLADORA VL (VLRS): Free Stock Analysis Report To read this article on Zacks.com click here. The liberalized deal, once operational, will do away with the existing framework that allows only a handful of carriers from each country on about 30 specified routes between the nations.
|
8155.0
|
2015-12-14 00:00:00 UTC
|
American Airlines and United Continental Try to Win Over Business Travelers
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-and-united-continental-try-win-over-business-travelers-2015-12-14
|
nan
|
nan
|
Delta Air Lines , American Airlines , and United Continental all have business models built around serving business travelers. But in the competition for lucrative corporate traffic, Delta has had a big advantage over its rivals in recent years.
Delta is the favorite airline of business travelers. Photo: The Motley Fool.
American Airlines and United Continental are trying to reverse that trend. They're adopting different tactics, though. American Airlines is looking to woo business travelers by offering more premium seats to improve passenger comfort. Meanwhile, United Continental is guaranteeing its operational reliability to attract and retain corporate customers.
Winning in the business travel market
In the past few years, Delta Air Lines has solidified its dominance in the corporate travel market. For example, it was voted as the best airline by readers of Business Travel News in 2011, 2012, and 2013. In the 2014 survey, not only did Delta win for a record fourth consecutive year, but it also won in every single one of the 10 categories measured.
At first glance, it might seem bizarre that business travelers like Delta so much. Its mainline planes are 17.1 years old on average, compared with an average of 13.5 years at United Airlines and 11.2 years at American Airlines. Delta also tends to pack more seats onto each plane than either American or United.
However, Delta has routinely outscored American and United in the annual Airline Quality Rating report. This measures performance on four important metrics: on-time percentage, the number of passengers involuntarily "bumped" from flights, the rate of mishandled baggage, and the number of official complaints filed with the DOT.
Last year, Delta again beat out both American Airlines and United Continental on all four metrics. In short, it is far more reliable than its peers at airline basics. Customers have been willing to pay for that superior performance. That's a big reason why Delta Air Lines has the highest profit margin among the three network carriers today.
Doubling down on comfort
American Airlines appears to be betting on superior passenger comfort to regain corporate travel share from Delta. It started down this road a couple of years ago by adopting a premium-heavy seat mix for the A321 planes it uses for transcontinental flights from New York to Los Angeles and San Francisco. Each of these planes has just 36 regular economy seats out of 102 total seats.
American Airlines is adding a premium economy section for international routes. Photo: American Airlines.
By contrast, Delta's transcontinental 757s are outfitted with 108 regular economy seats out of 168 total seats. Clearly, American is betting on getting a disproportionate amount of high-fare business traffic on these routes to make up for the lower number of seats on each plane.
Last week, American Airlines took another step down this road. The carrier announced that it will add a premium economy section on its international fleet beginning in late 2016.
This section will feature wider seats and more legroom than American's existing Main Cabin Extra seats, along with other complimentary amenities. But these seats will be priced a lot lower than the flat-bed seats that have become standard in business class for international routes.
This new premium economy section is targeted at travelers whose companies aren't willing to pay for business class tickets. By offering these fliers a more comfortable experience than what is available (outside of business class) on Delta and United, American hopes to gain loyal customers.
Guaranteeing performance
United Continental is targeting Delta more directly by highlighting improvements in its own operational reliability. United has recently begun offering corporate clients guarantees that it will be No. 1 or No. 2 in on-time performance next year among the three network carriers.
United Continental is offering corporate customers an on-time guarantee. Photo: The Motley Fool.
This followed a similar guarantee program Delta initiated a few months ago. There are some differences between the two programs -- e.g. Delta's program applies only to domestic mainline flights, while United's guarantee applies to all flights -- but the general concept is the same. If they don't meet the conditions of their guarantee programs, United and Delta will offer compensation of up to $250,000 to companies that are heavily affected by delays.
Of course, United doesn't need to beat Delta in on-time performance to avoid these payouts. It only needs to come in ahead of American Airlines. However, United -- which has posted strong gains in on-time performance in the past few months -- is clearly trying to challenge travelers' perceptions that it is unreliable relative to Delta.
American Airlines and United Continental are both making progress to become more competitive with Delta Air Lines in the fight for business travelers. However, unless Delta stumbles, American and United will have trouble overtaking it in customer appeal and profitability.
3 Companies Poised to Explode When Cable Dies
Cable is dying. And there are 3 stocks that are poised to explode when this faltering $2.2 trillion industry finally bites the dust. Just like newspaper publishers, telephone utilities, stockbrokers, record companies, bookstores, travel agencies, and big box retailers did when the Internet swept away their business models. And when cable falters, you don't want to miss out on these 3 companies that are positioned to benefit. Click here for their names. Hint: They'renot the ones you'd think!
The article American Airlines and United Continental Try to Win Over Business Travelers 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 - 2015 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 started down this road a couple of years ago by adopting a premium-heavy seat mix for the A321 planes it uses for transcontinental flights from New York to Los Angeles and San Francisco. However, United -- which has posted strong gains in on-time performance in the past few months -- is clearly trying to challenge travelers' perceptions that it is unreliable relative to Delta. Just like newspaper publishers, telephone utilities, stockbrokers, record companies, bookstores, travel agencies, and big box retailers did when the Internet swept away their business models.
|
Delta Air Lines , American Airlines , and United Continental all have business models built around serving business travelers. Doubling down on comfort American Airlines appears to be betting on superior passenger comfort to regain corporate travel share from Delta. 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 Air Lines , American Airlines , and United Continental all have business models built around serving business travelers. Its mainline planes are 17.1 years old on average, compared with an average of 13.5 years at United Airlines and 11.2 years at American Airlines. American Airlines and United Continental are both making progress to become more competitive with Delta Air Lines in the fight for business travelers.
|
Delta Air Lines , American Airlines , and United Continental all have business models built around serving business travelers. American Airlines is looking to woo business travelers by offering more premium seats to improve passenger comfort. Last year, Delta again beat out both American Airlines and United Continental on all four metrics.
|
8156.0
|
2015-12-14 00:00:00 UTC
|
Amazon Pulls Hoverboards from Website over Safety Concerns
|
AAL
|
https://www.nasdaq.com/articles/amazon-pulls-hoverboards-website-over-safety-concerns-2015-12-14
|
nan
|
nan
|
Image via Swagway.com
If you are planning to purchase a "hoverboard" on Amazon ( AMZN ) and capitalizing on their free two day shipping (if you are a Prime Member), well, you are going to need to find another retailer to purchase this (for some bizarre reason) hot holiday item.
Some of these "hoverboards" have redefined the term "hover" because they do not hover whatsoever; they are simply Segways without handlebars, are no longer going to be sold on Amazon. Leading "hoverboard" maker Swagway confirmed the online retailer is requesting companies producing and selling these misleading devices to prove these "hoverboards" are safe to use.
A spokesperson for Swagway provided a statement to The Verge regarding the issue: "Amazon just sent out a notice to all 'hoverboard' sellers to 'provide documentation demonstrating that all hoverboards you list are compliant with applicable safety standards, including UN 38.3 (battery), UL 1642 (battery), and UL 60950-1 (charger).'"
These "safety concerns" have nothing to do with people falling off of them, but rather due to the devices self-combusting and causing fires.
There have been at least ten reports of "hoverboard" fires in nine states in recent weeks, and the United States Consumer Product Safety Commission is actively investigating the situation. This safety concern has reached the point where major airlines like American Airlines ( AAL ), Delta ( DAL ), and United ( UAL ) will ban these handlebar-less Segways from flights. Prior to Amazon's move, Overstock.com ( OSTK ) announced this week that it would stop selling "hoverboards" for the same reasons.
Dating back to October of this year, UK government safety inspectors have been testing "hoverboards" imported into the country from knockoff manufacturers, which these days are all almost exclusively in China. Of the 17,000 "hoverboards" examined, 15,000, or 88%, were confiscated for these self-combusting and fire related safety reasons.
Anyone who actually wants to purchase these "hoverboard" imposters should take these safety concerns seriously and save their money until Hendo Hover works out the kinks of their hoverboard prototype that actually hovers and resembles the iconic devices in Back to the Future: Part II.
There are actual hoverboards being developed. Let's just stay patient. Otherwise, you may catch on fire.
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
AMAZON.COM INC (AMZN): 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.
|
This safety concern has reached the point where major airlines like American Airlines ( AAL ), Delta ( DAL ), and United ( UAL ) will ban these handlebar-less Segways from flights. Click to get this free report AMAZON.COM INC (AMZN): 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. Prior to Amazon's move, Overstock.com ( OSTK ) announced this week that it would stop selling "hoverboards" for the same reasons.
|
This safety concern has reached the point where major airlines like American Airlines ( AAL ), Delta ( DAL ), and United ( UAL ) will ban these handlebar-less Segways from flights. Click to get this free report AMAZON.COM INC (AMZN): 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.
|
Click to get this free report AMAZON.COM INC (AMZN): 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. This safety concern has reached the point where major airlines like American Airlines ( AAL ), Delta ( DAL ), and United ( UAL ) will ban these handlebar-less Segways from flights. There have been at least ten reports of "hoverboard" fires in nine states in recent weeks, and the United States Consumer Product Safety Commission is actively investigating the situation.
|
Click to get this free report AMAZON.COM INC (AMZN): 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. This safety concern has reached the point where major airlines like American Airlines ( AAL ), Delta ( DAL ), and United ( UAL ) will ban these handlebar-less Segways from flights. These "safety concerns" have nothing to do with people falling off of them, but rather due to the devices self-combusting and causing fires.
|
8157.0
|
2015-12-12 00:00:00 UTC
|
Better Investment Over the Next 10 Years: Railroads, Trucking, or Airlines?
|
AAL
|
https://www.nasdaq.com/articles/better-investment-over-next-10-years-railroads-trucking-or-airlines-2015-12-12
|
nan
|
nan
|
Image source: M@rioM via Flickr.
When you think of industrials, chances are your first thoughts are of heavy machinery and factories rather than planes and trucks. The machinery, however, is of little use until it's transported to the end user. And that's why the transportation sector - railroads, airlines, and trucking -- plays such a critical role in an economy's growth, even acting as a key indicator of economic activity.
While the importance of the transportation sector cannot be understated, each of the three industries mentioned above has distinct weaknesses, strengths, and opportunities. So we asked three of our contributors to weigh in on which industry they think is worth your money over the next 10 years. Here's what they said.
Jason Hall
The airline industry has had a lot of great performances over the past half-decade, but historically, it's been an awful investment. Warren Buffett said it best:
Now could be the worst time to invest in airline stocks. After all, the growth in the industry will come to a close at some point in the near future, and a bloody reversion to the mean seems likely. Trucking is a similar thin-margin, low-barrier-to-entry business, though not quite as historically ugly.
Railroads are capital-intensive, but few industries have higher barriers to entry. Furthermore, railroads are the arteries of commerce, connecting ports, factories, and farmlands to markets for their products, producing sizable and consistent cash flows.
The best investment in railroad is Canadian National Railway . Its stock is down 23% over the past year, largely due to the impact of weak oil, coal, and iron shipments. However, CN is one of the best-run railroads, and it has managed to keep profits flat even as shipments have declined.
Looking ahead a decade, CN is setting itself up for great results, connecting itself to several major U.S. Gulf Coast ports that will see significant traffic growth from Asia with the Panama Canal expansion.
Patient, long-term investors would do well to consider this top railroad operator before looking at any airline or trucking company.
Neha Chamaria
Railroads might be the "arteries of commerce," as Jason points out, but trucking is no less crucial. While railroads are preferred for long-distance shipments, trucking facilitates point-to-point delivery -- a critical component of intermodal transportation. That explains why trucking is such a big industry: Trucks move nearly 70% of the freight tonnage in the U.S., and trucking revenue crossed $700 billion for the first time last year. So you can't go wrong investing in an industry that virtually runs the economy.
Image source: PACCAR.
There are several ways to invest in trucking. On one hand, you have truck manufacturers like PACCAR , which owns big, trusted brands like Peterbilt, Kenworth, and DAF. PACCAR is a rapidly growing company with solid financials, having generated record revenue and its second-best net income in 2014.
On the other hand, you have freight trucking giants like United Parcel Service , the king of parcel delivery (that's where intermodal comes into the picture). UPS is well-poised to ride the e-commerce wave in coming years thanks to its massive fleet size and distribution network, which give it an edge over rivals like FedEx .
Or you can choose among the suppliers to the trucking industry, like Cummins , a leading manufacturer of engines and components, with more than one-third of the heavy-duty and nearly three-quarters of the medium-duty truck markets in North America under its belt. Two catalysts should fuel Cummins' growth in the future: stricter global emission regulations (the company is a leading innovator of clean, fuel-efficient engines) and increased adoption of natural gas (Cummins already has a strong presence in the alternative-fuel market).
Overall, trucking's significance to the economy makes it a smart investment choice for the next decade.
Dan Caplinger
The airline industry has taken off in recent years, defying its long-term reputation for destroying wealth. After waves of cutthroat competitive practices that left most of the major carriers in the business having to resort to bankruptcy protection, airlines finally figured out that a combination of new revenue-enhancing initiatives and consolidation to create a smaller number of larger players in the industry would produce better results. Those efforts have helped Delta Air Lines , American Airlines Group , and United Continental Holdings join perennially profitable Southwest Airlines with huge bottom-line success, and their stock prices have already soared in response to more favorable long-term prospects.
Right now, airlines enjoy rock-bottom fuel costs that aren't likely to last over the next 10 years. Yet smart capital expenditures to buy more efficient aircraft will pay off with long-term operating-cost savings. More broadly, the change in thinking among customers that has allowed Delta, United, and American to collect baggage fees, revenue for onboard food options, and money from Wi-Fi-hungry flyers has also made it easier for airlines to consider future moves to boost their results.
With the potential for a global economic turnaround, the next decade could be brighter than ever for airline stocks.
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 Investment Over the Next 10 Years: Railroads, Trucking, or Airlines? originally appeared on Fool.com.
Dan Caplinger has no position in any stocks mentioned. Jason Hall has no position in any stocks mentioned. Neha Chamaria has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Canadian National Railway, Cummins, and Paccar. The Motley Fool has the following options: long January 2017 $35 calls on American Airlines Group. The Motley Fool recommends FedEx and United Parcel Service. 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 - 2015 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.
|
Looking ahead a decade, CN is setting itself up for great results, connecting itself to several major U.S. Gulf Coast ports that will see significant traffic growth from Asia with the Panama Canal expansion. After waves of cutthroat competitive practices that left most of the major carriers in the business having to resort to bankruptcy protection, airlines finally figured out that a combination of new revenue-enhancing initiatives and consolidation to create a smaller number of larger players in the industry would produce better results. More broadly, the change in thinking among customers that has allowed Delta, United, and American to collect baggage fees, revenue for onboard food options, and money from Wi-Fi-hungry flyers has also made it easier for airlines to consider future moves to boost their results.
|
On the other hand, you have freight trucking giants like United Parcel Service , the king of parcel delivery (that's where intermodal comes into the picture). The Motley Fool owns shares of and recommends Canadian National Railway, Cummins, and Paccar. The Motley Fool recommends FedEx and United Parcel Service.
|
That explains why trucking is such a big industry: Trucks move nearly 70% of the freight tonnage in the U.S., and trucking revenue crossed $700 billion for the first time last year. Or you can choose among the suppliers to the trucking industry, like Cummins , a leading manufacturer of engines and components, with more than one-third of the heavy-duty and nearly three-quarters of the medium-duty truck markets in North America under its belt. The article Better Investment Over the Next 10 Years: Railroads, Trucking, or Airlines?
|
Overall, trucking's significance to the economy makes it a smart investment choice for the next decade. The article Better Investment Over the Next 10 Years: Railroads, Trucking, or Airlines? The Motley Fool owns shares of and recommends Canadian National Railway, Cummins, and Paccar.
|
8158.0
|
2015-12-11 00:00:00 UTC
|
Will Profits in the Airline Space Scale New Highs in 2016?
|
AAL
|
https://www.nasdaq.com/articles/will-profits-in-the-airline-space-scale-new-highs-in-2016-2015-12-11
|
nan
|
nan
|
Airline stocks will likely continue their bull run into 2016 as has been reinforced by the encouraging outlook provided by the International Air Transport Association (IATA) recently. The trade association now expects profits in the aviation industry to touch $36.3 billion in 2016 with a net profit margin of 5.1%.
IATA also projects profits of around $33 billion in 2015 with a net profit margin of 4.6%, marking an improvement from the previous guidance of $29.3 billion which was released in Jun 2015.
Impact on U.S. Airlines
Following the rosy profit outlook, stocks of the U.S. airlines industry had a bullish yesterday. Notably, Delta Air Lines Inc. DAL , United Continental Holdings UAL and Spirit Airlines SAVE rallied the most with a respective gain of 3.58%, 2.89% and 2.79%, in yesterday's trading session.
Factors Justifying the Bullish View
Fuel Price Effect: Airline profits largely depend on fuel prices which form nearly 30% of operating expenses and are also the major variable component in the industry. The firm holds that oil prices will continue to fall this year with the average price hovering around $55 per barrel of Brent crude. Likewise, in 2016, price of Brent crude is expected to decline further to $51 per barrel, thereby driving earnings for the overall aviation industry.
Solid Travel Demand: The busy Labor Day holiday period (Sep 2-8) and the Thanksgiving rush (Nov 20-Dec 1) will certainly drive profits beyond 2015. Moreover, Christmas holidays and summer vacations will contribute to traffic. IATA projects 6.7% and 6.9% growth in air traffic in 2015 and 2016 with load factor or percentage of seats filled by passengers pegged at 80.7%.%. IATA also believes that 3.8 billion passengers will travel in 2016.
Improving Economic Scenario: An improvement in U.S. economic conditions and strong recovery in most European nations continue to boost profits for airline carriers. In the U.S., unemployment rate stands at 5% which is quite encouraging while the U.S. Department of Commerce reported in its "second" estimate that the economy grew at a pace of 2.1% in the third quarter, compared to the earlier projected growth rate of 1.5%. Likewise, global GDP growth is forecasted at 2.7% for 2016 compared with 2.5% in 2015.
Improved Carrier Efficiency: Increased fleet restructuring programs retiring older and less efficient aircraft and placing new aircraft orders are anticipated to enhance the performance level of the company by trimming fuel and operating costs, and rendering a comfortable flying experience. Moreover, most carriers are focused on augmentation of ancillary revenues by launching value-added services at affordable rates. For example, JetBlue Airways Corp. JBLU has initiated Mint service which is gaining considerable popularity. Recently, American Airlines Group Inc. AAL rolled out Premium Economy service for its international customers. These value-added services are expected to retain customers and also ancillary revenues.
Region-Wise Contribution
North America continues to dominate more than half of the aviation industry with an expected profit of nearly $19.4 billion and $19.2 billion for 2015 and 2016, respectively. IATA also believes that the airline companies in North America will earn the maximum profits of $21.44 per passenger in 2016 against other regions with a net profit margin of 9.5%. Also, capacity expansion by North American airlines is anticipated to increase from 3.7% in 2015 to 4.8% in 2016 based on U.S. economic growth.
The other regions, namely, Europe, Asia-Pacific and Middle East are expected to generate post-tax net profit of $6.9 billion, $5.8 billion and $1.4 billion, in 2015 with profit margin of 3.5%, 2.9% and 2.3%, respectively.
However, Latin America and Africa are expected to incur loss of $1.05 billion and $3.84 billion, respectively, in the same period. Such a gloomy outlook for Latin America is mainly attributable to economic crisis in Brazil, adverse currency movements, and soft commodity prices. Similarly, an unstable political scenario and stiff competition from other international carriers have led to the somber outlook for Africa.
Likewise, for 2016, the profit guidance outside North America which include Europe, Asia-Pacific, Middle East and Latin America are estimated to produce post-tax net profit of $8.5 billion, $6.6 billion, $1.7 billion and $0.4 billion, respectively, and profit margin of 4.3%, 3.2%, 2.6% and 1.1%, respectively. However, Africa is anticipated to incur a loss of $0.1 billion.
Concerns Remain
Despite the strong profit outlook set by the IATA, we believe that earnings at the aviation industry will be offset by headwinds like travel alert stemming out of random terror attacks, strong U.S. dollar and labor-related issues. These negatives resulted in a 13% decline in the NYSE ARCA Airline index through the first eleven months of 2015.
In addition, declining air fares due to capacity expansion may also impact the top line of airline companies, thereby affecting profits. As per data released by the Bureau of Labor Statistics, airfares in Jul 2015 (on a seasonally adjusted basis) decreased 5.6% from Jun 2015. This decline marked the sharpest monthly drop since Dec 1995. Further, airfares declined 3.1% in the month of August.
The Bottom Line
We expect carriers to continue demonstrating impressive bottom-line growth going forward as oil prices are unlikely to touch the highs witnessed in mid-2014 anytime soon. Moreover, a higher demand for travel on the back of an improving labor market and consolidation should further aid 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
JETBLUE AIRWAYS (JBLU): 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.
|
Recently, American Airlines Group Inc. AAL rolled out Premium Economy service for its international customers. 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 SPIRIT AIRLINES (SAVE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Airline stocks will likely continue their bull run into 2016 as has been reinforced by the encouraging outlook provided by the International Air Transport Association (IATA) recently.
|
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 SPIRIT AIRLINES (SAVE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Recently, American Airlines Group Inc. AAL rolled out Premium Economy service for its international customers. The other regions, namely, Europe, Asia-Pacific and Middle East are expected to generate post-tax net profit of $6.9 billion, $5.8 billion and $1.4 billion, in 2015 with profit margin of 3.5%, 2.9% and 2.3%, respectively.
|
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 SPIRIT AIRLINES (SAVE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Recently, American Airlines Group Inc. AAL rolled out Premium Economy service for its international customers. The other regions, namely, Europe, Asia-Pacific and Middle East are expected to generate post-tax net profit of $6.9 billion, $5.8 billion and $1.4 billion, in 2015 with profit margin of 3.5%, 2.9% and 2.3%, respectively.
|
Recently, American Airlines Group Inc. AAL rolled out Premium Economy service for its international customers. 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 SPIRIT AIRLINES (SAVE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The trade association now expects profits in the aviation industry to touch $36.3 billion in 2016 with a net profit margin of 5.1%.
|
8159.0
|
2015-12-10 00:00:00 UTC
|
Why American Airlines Group, Inc. Shares Fell 11% in November
|
AAL
|
https://www.nasdaq.com/articles/why-american-airlines-group-inc-shares-fell-11-november-2015-12-10
|
nan
|
nan
|
What:American Airlines shares continued their disappointing year in November, with the stock falling nearly 11%, according to S&P Capital IQ data. This left the stock more than 25% below the all-time high it reached in January.
American Airlines November Stock Performance, data by YCharts
So what: There weren't any specific news events that caused American Airlines' poor November stock performance. The Paris terrorist attacks on Nov. 13 caused some skittishness among airline investors, but American Airlines shares had already begun falling before then.
More likely, the stock's drop reflected continuing pessimism from many investors about American Airlines' ability to get unit revenue growing again. Delta Air Lines seems to be way ahead of American Airlines in terms of responding to the challenging demand environment. Not only has Delta reacted aggressively to weak demand abroad by cutting capacity, its "Basic Economy" fare class has allowed Delta to match ultra-low cost carriers' prices without impacting its own profitability.
On the other hand, American Airlines has successfully completed the toughest parts of its merger integration process. This should allow it to unlock hundreds of millions of dollars of synergies in the next year or two.
American Airlines has completed the toughest part of its merger integration process. Photo: American Airlines
Moreover, American Airlines' EPS rose 70% year over year through the first nine months of 2015. This airline is fundamentally healthy. And with oil prices continuing to trend lower, American's fuel costs are on pace to decline again in 2016.
Now what: Airline stocks have historically been quite volatile, and that has definitely been the case in 2015. Investors shouldn't worry too much about these short-term fluctuations -- the long-term profit outlook is what really matters.
On that front, investors have gotten some good news recently. U.S. economic growth appears to be strengthening, as evidenced by another bullish jobs report that came out on Friday. Delta Air Lines also recently revealed that its Q4 unit revenue is likely to end up near the high end of its original guidance.
The result is that American Airlines stock rose 11% in the first five days of December, erasing nearly its entire November decline. (It has pulled back a bit since then.) As long as the company continues to execute well on its merger integration, long-term investors don't have much to worry about.
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 American Airlines Group, Inc. Shares Fell 11% in November 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 - 2015 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:American Airlines shares continued their disappointing year in November, with the stock falling nearly 11%, according to S&P Capital IQ data. More likely, the stock's drop reflected continuing pessimism from many investors about American Airlines' ability to get unit revenue growing again. The result is that American Airlines stock rose 11% in the first five days of December, erasing nearly its entire November decline.
|
American Airlines November Stock Performance, data by YCharts So what: There weren't any specific news events that caused American Airlines' poor November stock performance. 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 November Stock Performance, data by YCharts So what: There weren't any specific news events that caused American Airlines' poor November stock performance. The Paris terrorist attacks on Nov. 13 caused some skittishness among airline investors, but American Airlines shares had already begun falling before then. Photo: American Airlines Moreover, American Airlines' EPS rose 70% year over year through the first nine months of 2015.
|
American Airlines November Stock Performance, data by YCharts So what: There weren't any specific news events that caused American Airlines' poor November stock performance. The result is that American Airlines stock rose 11% in the first five days of December, erasing nearly its entire November decline. As long as the company continues to execute well on its merger integration, long-term investors don't have much to worry about.
|
8160.0
|
2015-12-10 00:00:00 UTC
|
American Airlines Plans Premium Economy on Non-US Flights
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-plans-premium-economy-on-non-us-flights-2015-12-10
|
nan
|
nan
|
American Airlines Group Inc.AAL plans to step-up 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 along with liquor and unlimited Wi-Fi usage. Moreover, passengers can check in two bags for no extra cost. The Premium Economy flight service will be available to Business Class and Main Cabin passengers.
These value-added services will not only improve customer satisfaction but also retain passengers for the premium carrier. Moreover, it will help American Airlines arrest customer churn and counter competition from other international carriers.
Meanwhile, American Airlines posted impressive air traffic numbers for the month of November. Traffic - measured in revenue passenger miles (RPMs) - stood at 16.86 billion, up 4.3% from 16.16 billion recorded a year ago. A substantial rise in travel demand during Thanksgiving drove the upside in traffic.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) dropped 0.2% to 20.76 billion. However, the load factor or percentage of seats filled by passengers decreased to 81.2% from 77.7% in Nov 2014. Meanwhile, American Airlines projects a 5% to 7% year-over-year decline in PRASM (passenger revenue per available seat mile) for fourth-quarter 2015.
Zacks Rank & Stocks to Consider
American Airlines currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same space are SkyWest Inc. SKYW , Hawaiian Holdings, Inc. HA and Delta Air Lines Inc. DAL . Both SkyWest and Hawaiian Holdings sport a Zacks Rank #1 (Strong Buy) while Delta Air Lines 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
DELTA AIR LINES (DAL): Free Stock Analysis Report
HAWAIIAN HLDGS (HA): Free Stock Analysis Report
SKYWEST INC (SKYW): 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 plans to step-up services on international flights with the rollout of Premium Economy. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Meanwhile, American Airlines projects a 5% to 7% year-over-year decline in PRASM (passenger revenue per available seat mile) for fourth-quarter 2015.
|
Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report SKYWEST INC (SKYW): 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 plans to step-up services on international flights with the rollout of Premium Economy. Better-ranked stocks in the same space are SkyWest Inc. SKYW , Hawaiian Holdings, Inc. HA and Delta Air Lines Inc. DAL .
|
Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report SKYWEST INC (SKYW): 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 plans to step-up services on international flights with the rollout of Premium Economy. Meanwhile, American Airlines projects a 5% to 7% year-over-year decline in PRASM (passenger revenue per available seat mile) for fourth-quarter 2015.
|
American Airlines Group Inc.AAL plans to step-up services on international flights with the rollout of Premium Economy. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Rank & Stocks to Consider American Airlines currently carries a Zacks Rank #3 (Hold).
|
8161.0
|
2015-12-10 00:00:00 UTC
|
Company News for December 10, 2015
|
AAL
|
https://www.nasdaq.com/articles/company-news-for-december-10-2015-2015-12-10
|
nan
|
nan
|
• Shares of Kinder Morgan, Inc. ( KMI ) declined 6.9% after the company reduced its quarterly dividend to 12.5 cents a share
• Shares of Costco Wholesale Corporation ( COST ) dropped 5.4% after the company reported first quarter fiscal 2016 earnings per share of $1.09 that fell short of the Zacks Consensus Estimate of $1.17
• Lululemon Athletica Inc.'s ( LULU ) shares plunged 13.1% after the company trimmed its yearly earnings per share to $1.81 to $1.84 from an earlier forecast of $1.87 to $1.92 a share
• Shares of American Airlines Group Inc. ( AAL ) dropped 2% after the company said it expects its passenger revenue per available seat mile fall between 5% to 7% in the fourth quarter compared to year ago period
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
KINDER MORGAN (KMI): Free Stock Analysis Report
COSTCO WHOLE CP (COST): Free Stock Analysis Report
LULULEMON ATHLT (LULU): 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.
|
• Shares of Kinder Morgan, Inc. ( KMI ) declined 6.9% after the company reduced its quarterly dividend to 12.5 cents a share • Shares of Costco Wholesale Corporation ( COST ) dropped 5.4% after the company reported first quarter fiscal 2016 earnings per share of $1.09 that fell short of the Zacks Consensus Estimate of $1.17 • Lululemon Athletica Inc.'s ( LULU ) shares plunged 13.1% after the company trimmed its yearly earnings per share to $1.81 to $1.84 from an earlier forecast of $1.87 to $1.92 a share • Shares of American Airlines Group Inc. ( AAL ) dropped 2% after the company said it expects its passenger revenue per available seat mile fall between 5% to 7% in the fourth quarter compared to year ago period Want the latest recommendations from Zacks Investment Research? Click to get this free report KINDER MORGAN (KMI): Free Stock Analysis Report COSTCO WHOLE CP (COST): Free Stock Analysis Report LULULEMON ATHLT (LULU): 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.
|
• Shares of Kinder Morgan, Inc. ( KMI ) declined 6.9% after the company reduced its quarterly dividend to 12.5 cents a share • Shares of Costco Wholesale Corporation ( COST ) dropped 5.4% after the company reported first quarter fiscal 2016 earnings per share of $1.09 that fell short of the Zacks Consensus Estimate of $1.17 • Lululemon Athletica Inc.'s ( LULU ) shares plunged 13.1% after the company trimmed its yearly earnings per share to $1.81 to $1.84 from an earlier forecast of $1.87 to $1.92 a share • Shares of American Airlines Group Inc. ( AAL ) dropped 2% after the company said it expects its passenger revenue per available seat mile fall between 5% to 7% in the fourth quarter compared to year ago period Want the latest recommendations from Zacks Investment Research? Click to get this free report KINDER MORGAN (KMI): Free Stock Analysis Report COSTCO WHOLE CP (COST): Free Stock Analysis Report LULULEMON ATHLT (LULU): 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.
|
• Shares of Kinder Morgan, Inc. ( KMI ) declined 6.9% after the company reduced its quarterly dividend to 12.5 cents a share • Shares of Costco Wholesale Corporation ( COST ) dropped 5.4% after the company reported first quarter fiscal 2016 earnings per share of $1.09 that fell short of the Zacks Consensus Estimate of $1.17 • Lululemon Athletica Inc.'s ( LULU ) shares plunged 13.1% after the company trimmed its yearly earnings per share to $1.81 to $1.84 from an earlier forecast of $1.87 to $1.92 a share • Shares of American Airlines Group Inc. ( AAL ) dropped 2% after the company said it expects its passenger revenue per available seat mile fall between 5% to 7% in the fourth quarter compared to year ago period Want the latest recommendations from Zacks Investment Research? Click to get this free report KINDER MORGAN (KMI): Free Stock Analysis Report COSTCO WHOLE CP (COST): Free Stock Analysis Report LULULEMON ATHLT (LULU): 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.
|
• Shares of Kinder Morgan, Inc. ( KMI ) declined 6.9% after the company reduced its quarterly dividend to 12.5 cents a share • Shares of Costco Wholesale Corporation ( COST ) dropped 5.4% after the company reported first quarter fiscal 2016 earnings per share of $1.09 that fell short of the Zacks Consensus Estimate of $1.17 • Lululemon Athletica Inc.'s ( LULU ) shares plunged 13.1% after the company trimmed its yearly earnings per share to $1.81 to $1.84 from an earlier forecast of $1.87 to $1.92 a share • Shares of American Airlines Group Inc. ( AAL ) dropped 2% after the company said it expects its passenger revenue per available seat mile fall between 5% to 7% in the fourth quarter compared to year ago period Want the latest recommendations from Zacks Investment Research? Click to get this free report KINDER MORGAN (KMI): Free Stock Analysis Report COSTCO WHOLE CP (COST): Free Stock Analysis Report LULULEMON ATHLT (LULU): 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.
|
8162.0
|
2015-12-09 00:00:00 UTC
|
Southwest Airlines Cuts Its Guidance -- and Drags Down Rivals
|
AAL
|
https://www.nasdaq.com/articles/southwest-airlines-cuts-its-guidance-and-drags-down-rivals-2015-12-09
|
nan
|
nan
|
Shares of Southwest Airlines have been on fire in the second half of 2015, rising from a 52-week low of $31.36 on July 1 to a peak of $51.34 on Monday. The party came to an end on Tuesday, though. Southwest stock slumped 9% -- pulling down shares of American Airlines , Delta Air Lines , and United Continental , too.
Major airline stock performance, data by YCharts .
The primary catalyst behind Southwest's 9% drop on Tuesday was a disappointing update to its Q4 unit revenue guidance. With the stock having dramatically outperformed peers since July, a relatively minor setback had a disproportionate impact on the share price.
The unit revenue forecast comes down
American Airlines, Delta Air Lines, and United Continental have all suffered from declining unit revenue throughout 2015. During Q2, Southwest was also in that club. However, in Q3, Southwest's unit revenue declined just 0.4%, buoyed by a lucrative new credit card agreement.
In conjunction with its Q3 earnings release in October, Southwest Airlines projected that its unit revenue would increase about 1% year over year in Q4. The company reaffirmed that guidance in early November.
Southwest Airlines had to cut its Q4 unit revenue guidance.
However, Southwest had to revise that guidance downward when it released its November traffic report this week. It now expects unit revenue to decline 0%-1% this quarter. The carrier continues to have more seats filled than ever, so the shortfall seems to be from pricing pressure, particularly on off-peak days.
An isolated issue
The unfavorable trend change that Southwest seems to have experienced in the past month isn't an industrywide issue. In fact, Delta Air Lines recently raised its Q4 unit revenue guidance. It now expects a 2.5% decline, compared to its original projection of a 2.5%-4.5% decline.
Meanwhile, the unit revenue outlook appears to be stable at American Airlines and United Continental. On Wednesday morning, American reaffirmed its forecast that passenger unit revenue would decline 5%-7% this quarter. United didn't update its unit revenue guidance this month, but it probably would have told investors when it published its monthly traffic report on Tuesday if it was in danger of falling short.
Other airlines haven't noticed a change in the fare environment.
Thus, Southwest's guidance cut isn't a sign of broader trouble for the airline industry. Either it had a company-specific demand issue or its original guidance was simply too aggressive.
What it means for the airlines
In any case, a 0%-1% unit revenue decline at Southwest is nothing to worry about. That's still likely to be the best unit revenue performance of any major airline this quarter. Furthermore, with oil prices continuing to slump, it's enough to drive significant margin expansion.
That said, Southwest Airlines stock has been trading for a premium within the airline industry. The company's market cap is higher than those of American Airlines and United Continental, both of which are twice its size. Investors demand superior performance from premium-valued companies, so it's not surprising that they dumped the stock after Southwest cut its guidance.
Southwest also faces several other challenges in the coming years. Labor tensions are growing at the discount carrier, and it will eventually need to hand out big raises -- and big ratification bonuses, too -- to settle these grievances. Meanwhile, its aggressive hedging policy means it will continue to suffer significant hedging losses for the next few years.
Shares of Delta, American, and United all look more attractive right now. They are all (still) significantly cheaper than Southwest Airlines stock and they all have little or no hedging exposure beyond 2015, putting them in a position to profit from the ongoing oil price slump.
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 Southwest Airlines Cuts Its Guidance -- and Drags Down 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 - 2015 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 stock slumped 9% -- pulling down shares of American Airlines , Delta Air Lines , and United Continental , too. Investors demand superior performance from premium-valued companies, so it's not surprising that they dumped the stock after Southwest cut its guidance. They are all (still) significantly cheaper than Southwest Airlines stock and they all have little or no hedging exposure beyond 2015, putting them in a position to profit from the ongoing oil price slump.
|
Southwest stock slumped 9% -- pulling down shares of American Airlines , Delta Air Lines , and United Continental , too. The unit revenue forecast comes down American Airlines, Delta Air Lines, and United Continental have all suffered from declining unit revenue throughout 2015. 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.
|
Southwest stock slumped 9% -- pulling down shares of American Airlines , Delta Air Lines , and United Continental , too. The unit revenue forecast comes down American Airlines, Delta Air Lines, and United Continental have all suffered from declining unit revenue throughout 2015. Southwest Airlines had to cut its Q4 unit revenue guidance.
|
Southwest stock slumped 9% -- pulling down shares of American Airlines , Delta Air Lines , and United Continental , too. The unit revenue forecast comes down American Airlines, Delta Air Lines, and United Continental have all suffered from declining unit revenue throughout 2015. Southwest Airlines had to cut its Q4 unit revenue guidance.
|
8163.0
|
2015-12-08 00:00:00 UTC
|
The Zacks Analyst Blog Highlights: Southwest Airlines, American Airlines Group, Delta Air Lines, Hawaiian Holdings and SkyWest
|
AAL
|
https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-southwest-airlines-american-airlines-group-delta-air
|
nan
|
nan
|
For Immediate Release
Chicago, IL - December 08, 2015 - 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 Southwest Airlines ( LUV ), American Airlines Group ( AAL ), Delta Air Lines ( DAL ), Hawaiian Holdings ( HA ) and SkyWest ( SKYW ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Monday's Analyst Blog:
4 Solid Picks for OPEC's Refusal to Curb Output
The decision of the Organization of the Petroleum Exporting Countries (OPEC) - the international cartel of oil producers - to not curb the output of crude, which was announced at its meeting in the Austrian capital of Vienna on Friday, Dec 4, turned out to be a boon for stocks in the airline space.
The gathering of the group's 12 member countries from the Middle East, Africa and Latin America decided that the daily crude production would be approximately 31.5 million barrels (the previous production cap was officially 30 million barrels). The cartel's move defied expectations of an output cut in response to the prevailing supply glut.
Airlines Soar on OPEC Decision
The group's ruling resulted in major airline players like Southwest Airlines ( LUV ) American Airlines Group ( AAL ) and Delta Air Lines ( DAL ) gaining significantly. Consequently, it was no surprise that the NYSE ARCA Airline index gained 2% to close at $92.75 on Dec 4 over the preceding day's figure.
In fact, the concern of oversupply is nothing new and has been responsible for the massive fall in oil prices . Currently, oil prices are hovering around the $40 per barrel mark. This represents a significant decline from the approximate $105 per barrel that oil traded in July, last year.
The drop in oil prices has reduced the airline companies' operating expenses significantly, thereby aiding the bottom line. OPEC's decision not to curb output despite the slump in prices means that the oversupply will continue to haunt the energy space. This implies good times ahead for airline carriers.
Given this backdrop, it is no surprise that the OPEC oil cartel's refusal to cut output and let the commodity slide has positively impacted the airline space.
Low Fuel Costs = Massive Savings, Surge in Buybacks
Weak oil prices have resulted in tremendous savings for carriers. The persistent drop in oil prices has significantly boosted the bottom line of airline stocks in the past quarters helping them deliver solid outcomes on the earnings front. For example, American Airlines Group, which does not hedge fuel costs, expects to generate savings of approximately $5 billion in 2015.
The massive savings have certainly cushioned the financial health of carriers. This has prompted the companies to launch share buyback programs, make increased dividend payments and significantly reduce their debt levels.
The OPEC decision is likely to further assure airline companies that they will continue to generate gigantic savings going forward. Consequently, their financial status will also remain solid. In view of this, buyback activity is likely to increase further in the airline space thereby benefiting shareholders.
Our Picks
The OPEC decision certainly bodes well for companies in the airline space. Given this scenario, this may be just the right time to pick stocks from the sector, which possess strong growth potential. Our selection is also backed by a good Zacks Growth Score and a favorable Zacks Rank.
We have narrowed our choices on the basis of new style score system .
Our research shows that stocks with a Growth Style Score of 'A' or 'B' when combined with a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities in the growth investing space.
Hawaiian Holdings ( HA ), the holding company of Hawaiian Airlines, was founded in 1929 and is headquartered in Honolulu, Hawaii. Hawaiian Holdings has a Zacks Rank #1 and a Growth Style Score of 'B.'
The company has expected earnings growth of 98.1% for the current year. Over the last 60 days, the 2015 Zacks Consensus Estimate of earnings has gone up 34 cents to $3.07 per share. Likewise, the estimate for 2016 has jumped 37 cents over the last 60 days to $3.31 per share. The long-term estimated earnings growth rate of 33.4% at the company exceeds the industry average of 18.4%.
SkyWest ( SKYW ) was founded in 1972 and is headquartered in St. George, UT. SkyWest sports a Zacks Rank #1 and a Growth Style Score of 'B.'
The company has expected earnings growth rate in excess of 100% for the current year. Earnings per share estimates have risen for 2015 (up 13 cents to $1.93 over the last 60 days) as well as 2016 (up 23 cents to $2.10 over the same period).
Delta Air Lines , based in Atlanta, GA and founded in 1924, provides scheduled air transportation for passengers and cargo worldwide. Delta has a Zacks Rank #2 and a Growth Style Score of 'A.'
The company has expected earnings growth rate of 41.25% for the current year. Over the last 60 days, the 2015 Zacks Consensus Estimate of earnings has gone up 8 cents to $4.62 per share. Likewise, the estimate for 2016 has jumped 17 cents over the last 60 days to $5.65 per share. The long-term estimated earnings growth rate of 23.8% at the company exceeds the industry average of 18.4%.
Our final choice rests on Dallas-based low-cost carrier Southwest Airlines . Southwest Airlines , founded in 1967, holds a Zacks Rank #2 (Buy) and a Growth Style Score of 'A.'
The company has an expected earnings growth rate of 75.58% for the current year. Over the last 60 days, the 2015 Zacks Consensus Estimate of earnings has gone up 6 cents to $3.53 per share. Likewise, the estimate for 2016 has jumped 24 cents over the 60 days to $3.98 per share. The long-term estimated earnings growth rate of 21.6% at the company exceeds the industry average of 18.4%.
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
SOUTHWEST AIR (LUV): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
HAWAIIAN HLDGS (HA): Free Stock Analysis Report
SKYWEST INC (SKYW): 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 Southwest Airlines ( LUV ), American Airlines Group ( AAL ), Delta Air Lines ( DAL ), Hawaiian Holdings ( HA ) and SkyWest ( SKYW ). Airlines Soar on OPEC Decision The group's ruling resulted in major airline players like Southwest Airlines ( LUV ) American Airlines Group ( AAL ) and Delta Air Lines ( DAL ) gaining significantly. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report To read this article on Zacks.com click here.
|
Stocks recently featured in the blog include Southwest Airlines ( LUV ), American Airlines Group ( AAL ), Delta Air Lines ( DAL ), Hawaiian Holdings ( HA ) and SkyWest ( SKYW ). Airlines Soar on OPEC Decision The group's ruling resulted in major airline players like Southwest Airlines ( LUV ) American Airlines Group ( AAL ) and Delta Air Lines ( DAL ) gaining significantly. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report To read this article on Zacks.com click here.
|
Airlines Soar on OPEC Decision The group's ruling resulted in major airline players like Southwest Airlines ( LUV ) American Airlines Group ( AAL ) and Delta Air Lines ( DAL ) gaining significantly. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks recently featured in the blog include Southwest Airlines ( LUV ), American Airlines Group ( AAL ), Delta Air Lines ( DAL ), Hawaiian Holdings ( HA ) and SkyWest ( SKYW ).
|
Stocks recently featured in the blog include Southwest Airlines ( LUV ), American Airlines Group ( AAL ), Delta Air Lines ( DAL ), Hawaiian Holdings ( HA ) and SkyWest ( SKYW ). Airlines Soar on OPEC Decision The group's ruling resulted in major airline players like Southwest Airlines ( LUV ) American Airlines Group ( AAL ) and Delta Air Lines ( DAL ) gaining significantly. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report To read this article on Zacks.com click here.
|
8164.0
|
2015-12-08 00:00:00 UTC
|
3 Airlines That Could Soar With Lower Oil Prices
|
AAL
|
https://www.nasdaq.com/articles/3-airlines-could-soar-lower-oil-prices-2015-12-08
|
nan
|
nan
|
Last week, OPEC once again failed to reach any agreement on reining in production to stabilize oil prices . The group didn't even attempt to set a production quota -- not that it would have mattered, since OPEC has been routinely exceeding its collective production target of 30 million barrels per day this year.
This development makes it look like oil prices will go even lower and could stay depressed for even longer than previously expected. January Brent crude futures fell below $41 a barrel on Monday, down from over $100 in mid-2014. Some pundits think oil prices could go as low as $20 a barrel.
The world's largest airline would be a big beneficiary of lower oil prices. Photo: American Airlines.
Cheap oil has been a big boon for airlines in 2015. If oil remains cheap going forward, American Airlines , Virgin America , and Spirit Airlines will be three of the biggest beneficiaries.
The biggest airline bets on cheap oil
American Airlines' management team made a wise decision years ago to avoid fuel hedging . This decision allowed the company to reap the full benefit of falling oil prices in 2015. Even as the cost of hedging future fuel needs has plummeted since mid-2014, American Airlines has stayed on the sidelines. This move amounts to an implicit bet that fuel prices will remain low for quite a while.
As a result, American Airlines will be one of the biggest beneficiaries of the ongoing oil-price rout. The company expects to pay an average price of $1.70 to $1.75 per gallon for jet fuel in 2015, down from $2.91 a gallon a year earlier.
Based on the current oil futures curve, American could end up paying less than $1.50 a gallon in 2016. That would generate $1 billion or more in year-over-year savings.
American Airlines CEO Doug Parker has warned that ongoing pricing pressure may cause the company's profit margin to shrink in 2016 from the record level reached this year. However, another drop in fuel prices could offset that pressure in whole or in part.
A stable profit margin combined with American's massive share repurchases could lead to significantly better-than-expected earnings per share next year. That situation could snap American Airlines stock out of its funk in a hurry.
The cost of comfort is declining
Another airline that should be a big beneficiary of lower oil prices is Virgin America. Unlike American Airlines, Virgin America faced significant hedging losses in the first half of 2015, paying an average of $2.32 a gallon for fuel during that period.
Virgin America is likely to face smaller hedging losses as well as an even lower market price for jet fuel in 2016. It will therefore realize significant fuel savings next year.
Virgin America is on pace for more fuel savings in 2016. Photo: Virgin America.
Virgin America is especially sensitive to fuel prices because it doesn't squeeze as many seats onto each plane as most other airlines. It should be no surprise that Spirit Airlines crams about 20% more seats onto its A319s and A320s than Virgin America. But even American Airlines fits a few more seats on its planes.
Offering passengers more space allows Virgin America to earn a revenue premium on many routes. However, it involves a trade-off in fuel efficiency. (That said, the youth of Virgin America's fleet helps offset this disadvantage.) With cheaper jet fuel, Virgin America will face a lower-cost penalty for offering its customers more space.
The fall in jet fuel prices comes at a particularly good time for Virgin America, which plans to ramp up its growth rate into double-digit territory next year. Lower unit costs will allow Virgin America to offer low introductory fares on new routes while remaining quite profitable.
More fuel-funded growth at Spirit Airlines Investors haven't been too pleased with Spirit Airlines' performance this year. The stock has lost about half of its value in the past year as the company had to cut its guidance multiple times during the year.
Spirit Airlines had to cut its guidance more than once this year. Photo: Spirit Airlines.
That said, Spirit Airlines expects to increase its pre-tax profit margin from the record level of 19.2% reached last year to a range of 21.5% to 23% in 2015, despite increasing capacity 30% this year. This performance is a remarkable achievement, but it probably wouldn't have happened without the sharp drop in fuel prices.
Spirit Airlines plans to increase its capacity by another 20% next year. This rapid growth will continue to weigh on its unit revenue. But if fuel prices fall again in 2016, Spirit could still produce a stellar pre-tax margin above 20% for the second straight year.
Indeed, Spirit Airlines hopes to grow 15% to 20% annually for the foreseeable future. The longer oil stays cheap, the more it will be able to grow while meeting or exceeding its target margin.
Warren Buffett: This new technology is a "real threat"
At the recent Berkshire Hathaway annual meeting, Warren Buffett admitted this emerging technology is threatening his biggest cash-cow. Buffett's fear can be your gain. Only a few investors are embracing this new market, which experts say will be worth over $2 trillion . Find out how you can cash in on this technology before the crowd catches on, by jumping onto one company that could get you the biggest piece of the action. Click here to access a free investor alert on the company we're calling the brains behind the technology.
The article 3 Airlines That Could Soar With Lower Oil Prices originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of Spirit Airlines and Virgin America 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 and 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 - 2015 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 CEO Doug Parker has warned that ongoing pricing pressure may cause the company's profit margin to shrink in 2016 from the record level reached this year. Unlike American Airlines, Virgin America faced significant hedging losses in the first half of 2015, paying an average of $2.32 a gallon for fuel during that period. The fall in jet fuel prices comes at a particularly good time for Virgin America, which plans to ramp up its growth rate into double-digit territory next year.
|
Unlike American Airlines, Virgin America faced significant hedging losses in the first half of 2015, paying an average of $2.32 a gallon for fuel during that period. That said, Spirit Airlines expects to increase its pre-tax profit margin from the record level of 19.2% reached last year to a range of 21.5% to 23% in 2015, despite increasing capacity 30% this year. Adam Levine-Weinberg owns shares of Spirit Airlines and Virgin America 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.
|
If oil remains cheap going forward, American Airlines , Virgin America , and Spirit Airlines will be three of the biggest beneficiaries. The biggest airline bets on cheap oil American Airlines' management team made a wise decision years ago to avoid fuel hedging . Adam Levine-Weinberg owns shares of Spirit Airlines and Virgin America 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.
|
If oil remains cheap going forward, American Airlines , Virgin America , and Spirit Airlines will be three of the biggest beneficiaries. Virgin America is likely to face smaller hedging losses as well as an even lower market price for jet fuel in 2016. The Motley Fool recommends Spirit Airlines and Virgin America.
|
8165.0
|
2015-12-07 00:00:00 UTC
|
Nasdaq 100 Movers: VIP, GMCR
|
AAL
|
https://www.nasdaq.com/articles/nasdaq-100-movers-vip-gmcr-2015-12-07
|
nan
|
nan
|
In early trading on Monday, shares of Keurig Green Mountain ( GMCR ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 73.1%. Year to date, Keurig Green Mountain has lost about 32.4% of its value.
And the worst performing Nasdaq 100 component thus far on the day is VimpelCom ( VIP ), trading down 4.2%. VimpelCom is lower by about 21.4% looking at the year to date performance.
Two other components making moves today are Micron Technology ( MU ), trading down 3.7%, and American Airlines Group ( AAL ), trading up 2.7% on the day.
VIDEO: Nasdaq 100 Movers: VIP, GMCR
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 Micron Technology ( MU ), trading down 3.7%, and American Airlines Group ( AAL ), trading up 2.7% on the day. In early trading on Monday, shares of Keurig Green Mountain ( GMCR ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 73.1%. And the worst performing Nasdaq 100 component thus far on the day is VimpelCom ( VIP ), trading down 4.2%.
|
Two other components making moves today are Micron Technology ( MU ), trading down 3.7%, and American Airlines Group ( AAL ), trading up 2.7% on the day. In early trading on Monday, shares of Keurig Green Mountain ( GMCR ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 73.1%. Year to date, Keurig Green Mountain has lost about 32.4% of its value.
|
Two other components making moves today are Micron Technology ( MU ), trading down 3.7%, and American Airlines Group ( AAL ), trading up 2.7% on the day. In early trading on Monday, shares of Keurig Green Mountain ( GMCR ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 73.1%. And the worst performing Nasdaq 100 component thus far on the day is VimpelCom ( VIP ), trading down 4.2%.
|
Two other components making moves today are Micron Technology ( MU ), trading down 3.7%, and American Airlines Group ( AAL ), trading up 2.7% on the day. In early trading on Monday, shares of Keurig Green Mountain ( GMCR ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 73.1%. And the worst performing Nasdaq 100 component thus far on the day is VimpelCom ( VIP ), trading down 4.2%.
|
8166.0
|
2015-12-06 00:00:00 UTC
|
Delta Air Lines, Inc. Soars: What Terrorist Attacks?
|
AAL
|
https://www.nasdaq.com/articles/delta-air-lines-inc-soars-what-terrorist-attacks-2015-12-06
|
nan
|
nan
|
The legacy airlines -- Delta Air Lines , American Airlines , and United Continental -- have faced significant revenue headwinds this year. The strong dollar, falling international fuel surcharges, and rapid capacity growth in some domestic markets combined to drive down unit revenue at all three carriers.
U.S. legacy carriers have faced steep unit revenue declines in 2015. Photo: American Airlines.
Delta Air Lines has been the most proactive about cutting capacity to reverse the weak revenue trend. Last month's terrorist attacks in Paris threatened to derail Delta's momentum , though, by stifling demand.
That outcome doesn't seem to have been the case. In fact, Delta is on pace to reach the top end of its original revenue guidance range this quarter. This performance indicates that the Paris attacks have had little to no impact on travel demand.
Unit revenue declines moderating
In the second and third quarters, Delta Air Lines' passenger unit revenue declined 4.6% and 4.9% year over year, respectively. To stabilize unit revenue, Delta implemented steep cuts to its international capacity for its fall schedule.
In October, Delta projected that its Q4 passenger unit revenue would decline 2.5% to 4.5%, which would mark a solid sequential improvement. Within a few weeks, that forecast seemed quite conservative; in early November, Delta reported that its October passenger unit revenue had decreased just 1% year over year. This strong performance made it seem likely that Delta would meet or exceed the high end of its revenue guidance.
However, the terrorist attacks that struck Paris on Nov. 13 made many investors nervous. It seemed plausible that people would dramatically cut back on travel because of fear about potential follow-on attacks.
The Paris terrorist attacks threatened Delta's revenue recovery. Photo: The Motley Fool.
A demand interruption like this would primarily affect Delta, American, and United rather than smaller airlines, which tend to be U.S.-focused. Delta was in a particularly vulnerable position because it has a small hub in Paris and it participates in a trans-Atlantic joint venture with Air France.
No immediate impact from Paris
So far, it appears these worries were blown out of proportion. Last week, Delta reported that its passenger unit revenue increased 1.5% year over year in November, lifted by a shift in the timing of Thanksgiving relative to the end of the month. It also confirmed that unit revenue for the fourth quarter would be near the high end of its original guidance (i.e., down about 2.5%).
This guidance implies that Delta will post a mid- to high-single-digit passenger unit revenue decline in December. That's not a cause for concern, though; it merely reflects the impact of two calendar effects.
First, the shift in the timing of Thanksgiving that benefited Delta's November results will have a corresponding negative impact on December. Additionally, the Christmas travel season will be more compressed this year. With Christmas falling on a Friday rather than a Thursday, travelers are less likely to take that whole week off.
Good news for American and United, too
Delta's improving unit revenue trajectory is also good news for American Airlines and United Continental investors. They have less capacity deployed in Paris than Delta does, so if the terrorist attacks didn't appreciably affect Delta's unit revenue, American and United aren't likely to see a noticeable impact, either.
More broadly, Delta's rapidly improving unit revenue trajectory is a sign that American Airlines and United Continental should also be able to stabilize unit revenue in the next few quarters. However, to do so, they may need to adopt Delta's more aggressive approach to capacity management.
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. Soars: What Terrorist Attacks? 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 - 2015 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 strong dollar, falling international fuel surcharges, and rapid capacity growth in some domestic markets combined to drive down unit revenue at all three carriers. Delta was in a particularly vulnerable position because it has a small hub in Paris and it participates in a trans-Atlantic joint venture with Air France. This guidance implies that Delta will post a mid- to high-single-digit passenger unit revenue decline in December.
|
The legacy airlines -- Delta Air Lines , American Airlines , and United Continental -- have faced significant revenue headwinds this year. Good news for American and United, too Delta's improving unit revenue trajectory is also good news for American Airlines and United Continental investors. 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.
|
Good news for American and United, too Delta's improving unit revenue trajectory is also good news for American Airlines and United Continental investors. They have less capacity deployed in Paris than Delta does, so if the terrorist attacks didn't appreciably affect Delta's unit revenue, American and United aren't likely to see a noticeable impact, either. More broadly, Delta's rapidly improving unit revenue trajectory is a sign that American Airlines and United Continental should also be able to stabilize unit revenue in the next few quarters.
|
This performance indicates that the Paris attacks have had little to no impact on travel demand. Unit revenue declines moderating In the second and third quarters, Delta Air Lines' passenger unit revenue declined 4.6% and 4.9% year over year, respectively. They have less capacity deployed in Paris than Delta does, so if the terrorist attacks didn't appreciably affect Delta's unit revenue, American and United aren't likely to see a noticeable impact, either.
|
8167.0
|
2015-12-04 00:00:00 UTC
|
Nasdaq 100 Movers: GMCR, AAL
|
AAL
|
https://www.nasdaq.com/articles/nasdaq-100-movers-gmcr-aal-2015-12-04
|
nan
|
nan
|
In early trading on Friday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 3.7%. Year to date, American Airlines Group has lost about 16.3% of its value.
And the worst performing Nasdaq 100 component thus far on the day is Keurig Green Mountain ( GMCR ), trading down 3.2%. Keurig Green Mountain is lower by about 60.3% looking at the year to date performance.
Two other components making moves today are Wynn Resorts ( WYNN ), trading down 2.0%, and Mattel ( MAT ), trading up 2.7% on the day.
VIDEO: Nasdaq 100 Movers: GMCR, 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 Friday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 3.7%. VIDEO: Nasdaq 100 Movers: GMCR, AAL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. And the worst performing Nasdaq 100 component thus far on the day is Keurig Green Mountain ( GMCR ), trading down 3.2%.
|
VIDEO: Nasdaq 100 Movers: GMCR, 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 Friday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 3.7%. Year to date, American Airlines Group has lost about 16.3% of its value.
|
In early trading on Friday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 3.7%. VIDEO: Nasdaq 100 Movers: GMCR, AAL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. And the worst performing Nasdaq 100 component thus far on the day is Keurig Green Mountain ( GMCR ), trading down 3.2%.
|
In early trading on Friday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 3.7%. VIDEO: Nasdaq 100 Movers: GMCR, AAL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. And the worst performing Nasdaq 100 component thus far on the day is Keurig Green Mountain ( GMCR ), trading down 3.2%.
|
8168.0
|
2015-12-04 00:00:00 UTC
|
S&P 500 Movers: CNX, NEM
|
AAL
|
https://www.nasdaq.com/articles/sp-500-movers-cnx-nem-2015-12-04
|
nan
|
nan
|
In early trading on Friday, shares of Newmont Mining ( NEM ) topped the list of the day's best performing components of the S&P 500 index, trading up 3.7%. Year to date, Newmont Mining registers a 2.7% gain.
And the worst performing S&P 500 component thus far on the day is CONSOL Energy ( CNX ), trading down 7.7%. CONSOL Energy is lower by about 76.3% looking at the year to date performance.
Two other components making moves today are Kinder Morgan ( KMI ), trading down 7.1%, and American Airlines Group ( AAL ), trading up 3.2% on the day.
VIDEO: S&P 500 Movers: CNX, NEM
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 Kinder Morgan ( KMI ), trading down 7.1%, and American Airlines Group ( AAL ), trading up 3.2% on the day. Year to date, Newmont Mining registers a 2.7% gain. And the worst performing S&P 500 component thus far on the day is CONSOL Energy ( CNX ), trading down 7.7%.
|
Two other components making moves today are Kinder Morgan ( KMI ), trading down 7.1%, and American Airlines Group ( AAL ), trading up 3.2% on the day. And the worst performing S&P 500 component thus far on the day is CONSOL Energy ( CNX ), trading down 7.7%. VIDEO: S&P 500 Movers: CNX, NEM 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 Kinder Morgan ( KMI ), trading down 7.1%, and American Airlines Group ( AAL ), trading up 3.2% on the day. In early trading on Friday, shares of Newmont Mining ( NEM ) topped the list of the day's best performing components of the S&P 500 index, trading up 3.7%. VIDEO: S&P 500 Movers: CNX, NEM 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 Kinder Morgan ( KMI ), trading down 7.1%, and American Airlines Group ( AAL ), trading up 3.2% on the day. In early trading on Friday, shares of Newmont Mining ( NEM ) topped the list of the day's best performing components of the S&P 500 index, trading up 3.7%. And the worst performing S&P 500 component thus far on the day is CONSOL Energy ( CNX ), trading down 7.7%.
|
8169.0
|
2015-12-01 00:00:00 UTC
|
Will American Airlines Group, Inc. Continue Its Buyback Binge?
|
AAL
|
https://www.nasdaq.com/articles/will-american-airlines-group-inc-continue-its-buyback-binge-2015-12-01
|
nan
|
nan
|
Image source: American Airlines.
Delta Air Lines surprised many investors earlier this year when it announced a massive $5 billion share buyback program . Delta had entered the year with more than $1 billion remaining on a $2 billion share repurchase program announced a year earlier, and this move signaled an even more aggressive approach toward returning cash to shareholders.
However, while Delta Air Lines holds the record for the biggest single share buyback program in the airline industry, its close rival, American Airlines , has actually been more aggressive. It has executed a series of smaller buyback programs this year, and looks set to continue doing so during Q4 and throughout 2016.
American Airlines outguns Delta
When Delta announced its $5 billion share repurchase program in May, American Airlines was working on a $2 billion share repurchase program that its board authorized in January. American bought back $190 million of stock in Q1 of this year and spent another $753 million on buybacks in Q2.
American Airlines Stock Performance, data by YCharts .
The stock started to recover in October, but it has since fallen back into a rut, mainly due to concerns about American's aggressive price-matching policy and potential demand destruction related to the Paris terrorist attacks. However, neither of these is likely to significantly damage the company's strong profitability, especially from a long-run perspective.
On the flip side, American Airlines completed a big integration task in October, combining the US Airways reservation system with its own. By avoiding major snafus there, it significantly reduced the likelihood of a profit meltdown. Additionally, jet fuel prices remain as low as they have been in years, which is a major earnings tailwind.
US Gulf Coast Kerosene-Type Jet Fuel Spot Price , data by YCharts .
With earnings remaining strong and the stock price remaining depressed, the rationale for heavy share buybacks is as sound as ever. American Airlines can dramatically reduce its share count by repurchasing its stock, thereby boosting earnings per share. It had about $8.3 billion in unrestricted cash as of the end of September (excluding cash trapped in Venezuela), so it has plenty of firepower for buybacks, too.
As a result, American Airlines' share repurchases will probably remain elevated for the time being. At a minimum, it is likely to complete the existing authorizations of $3.5 billion by the end of 2016, which would be an average of $700 million in share buybacks per quarter.
However, there's a good chance that the company will increase its buyback plans again in 2016. American's heavy capex spending of the past few years will start to moderate next year before moving significantly lower in 2018. That will free up more cash for capital returns.
Furthermore, the current management team has shown in dramatic fashion this year that it is willing to prioritize buybacks over debt reduction when the stock looks cheap and financing costs are low. Until either the stock price or interest rates rise significantly -- or both -- large share buybacks will be a routine occurrence at American Airlines.
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 Will American Airlines Group, Inc. Continue Its Buyback Binge? 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 - 2015 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 started to recover in October, but it has since fallen back into a rut, mainly due to concerns about American's aggressive price-matching policy and potential demand destruction related to the Paris terrorist attacks. Furthermore, the current management team has shown in dramatic fashion this year that it is willing to prioritize buybacks over debt reduction when the stock looks cheap and financing costs are low. Until either the stock price or interest rates rise significantly -- or both -- large share buybacks will be a routine occurrence at American Airlines.
|
Delta Air Lines surprised many investors earlier this year when it announced a massive $5 billion share buyback program . American Airlines outguns Delta When Delta announced its $5 billion share repurchase program in May, American Airlines was working on a $2 billion share repurchase program that its board authorized in January. Adam Levine-Weinberg is long January 2017 $40 calls on Delta Air Lines and long January 2017 $30 calls on American Airlines Group.
|
Delta had entered the year with more than $1 billion remaining on a $2 billion share repurchase program announced a year earlier, and this move signaled an even more aggressive approach toward returning cash to shareholders. However, while Delta Air Lines holds the record for the biggest single share buyback program in the airline industry, its close rival, American Airlines , has actually been more aggressive. American Airlines outguns Delta When Delta announced its $5 billion share repurchase program in May, American Airlines was working on a $2 billion share repurchase program that its board authorized in January.
|
Delta had entered the year with more than $1 billion remaining on a $2 billion share repurchase program announced a year earlier, and this move signaled an even more aggressive approach toward returning cash to shareholders. American Airlines can dramatically reduce its share count by repurchasing its stock, thereby boosting earnings per share. The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
8170.0
|
2015-12-01 00:00:00 UTC
|
American Airlines Passenger Service Staff to Get Higher Pay
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-passenger-service-staff-to-get-higher-pay-2015-12-01
|
nan
|
nan
|
Labor disputes are not new to the airline industry. It is a known fact that airlines, being a service industry primarily, can be significantly bogged down by labor problems that tend to disrupt operations of a carrier. On the other hand, smooth and amicable solutions to labor issues make things much easier in the aviation space. Thankfully, the latest development on the labor front at American Airlines GroupAAL calls for celebrations.
Members of the union (Communications Workers of America and International Brotherhood of Teamsters) representing the reservations and gate agents of this Fort Worth, TX-based carrier recently ratified a five-year contract which guarantees them higher pay. The contract covers around 14,500 passenger service employees of the company in the U.S.
The CWA-IBT represents the gate and ticket agents, Premium Service representatives, Reservations representatives and Travel Center representatives of the carrier. We note that the workers had not been unionized previously. They united under the CWA-IBT umbrella only last year. According to the update, approximately 9,500 members took part in the voting procedure, which was conducted by an independent third party. Approximately 73% of the votes cast were in favor of the deal.
According to a Bloomberg report, following the ratification of the deal, the concerned employees would see their wages go up by 30% on an average, with immediate effect. The initial increase apart, there would be further financial gains for the passenger service employees as per the contract.
We are not surprised by the outcome of the ratification voting procedure as the tentative agreement between the concerned parties was already inked in September this year. However, tentative agreements do not always culminate in the ratification of a deal. The latest example to this effect is Southwest Airlines LUV . Pilots at the Dallas, Texas-based low-cost carrier turned down a tentative labor contract pertaining to their pay raise on two major grounds, as per media reports. Apparently, the issues pertained to code share agreements and retro pay.
Republic Airways Holdings Inc. RJET , meanwhile, received positive news on the labor front just like American Airlines. Pilots at the Indianapolis-based carrier agreed to a deal that will ensure industry-leading compensation, job security and improved work rules for the pilots at Republic Airways.
With most airline companies enjoying robust financial health, it is quite natural that their employees would demand higher pays. As airline employees look to boost their pay, negotiations between carriers and various labor groups on new contracts pertaining to pay and other benefits continue to take the airline industry by storm.
Zacks Rank
American Airlines presently carries a Zacks Rank #3 (Hold). Investors interested in the airline space may consider Hawaiian Holdings HA , 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
REPUBLIC AIRWAY (RJET): 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.
|
Thankfully, the latest development on the labor front at American Airlines GroupAAL calls for celebrations. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report REPUBLIC AIRWAY (RJET): 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. It is a known fact that airlines, being a service industry primarily, can be significantly bogged down by labor problems that tend to disrupt operations of a carrier.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report REPUBLIC AIRWAY (RJET): 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. Thankfully, the latest development on the labor front at American Airlines GroupAAL calls for celebrations. The CWA-IBT represents the gate and ticket agents, Premium Service representatives, Reservations representatives and Travel Center representatives of the carrier.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report REPUBLIC AIRWAY (RJET): 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. Thankfully, the latest development on the labor front at American Airlines GroupAAL calls for celebrations. Members of the union (Communications Workers of America and International Brotherhood of Teamsters) representing the reservations and gate agents of this Fort Worth, TX-based carrier recently ratified a five-year contract which guarantees them higher pay.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report REPUBLIC AIRWAY (RJET): 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. Thankfully, the latest development on the labor front at American Airlines GroupAAL calls for celebrations. We are not surprised by the outcome of the ratification voting procedure as the tentative agreement between the concerned parties was already inked in September this year.
|
8171.0
|
2015-11-28 00:00:00 UTC
|
1 Super Stock for 2025
|
AAL
|
https://www.nasdaq.com/articles/1-super-stock-2025-2015-11-28
|
nan
|
nan
|
Many investors distinguish between two kinds of stocks: growth stocks and value stocks. Growth stocks tend to be expensive, but have lots of room to expand their businesses and grow their earnings. Value stocks tend to be more mature companies. They aren't expected to grow much, but they can sometimes be found at a very cheap price.
But what if you could get the upside potential of a true growth stock at the cheap price of a value stock? Then you would have a super stock! Opportunities like that don't come around often -- but Spirit Airlines just might be one.
Strong profitability
First, let's take a look at Spirit Airlines' enviable profitability. In 2014, it produced an adjusted pre-tax margin of 19.2%, among the best in the history of the U.S. airline industry.
Spirit Airlines is one of the most profitable airlines in the world. Image source: Spirit Airlines
Investors have panicked this year about a steep decline in Spirit's average fare. Yet the company is on pace to earn an even higher profit margin in 2015, as fuel prices have plummeted. Spirit has projected that its operating margin will be in the 21.5% to 23% range for the full year.
Depending on fuel price trends and how the industry fare environment develops next year, it's possible that Spirit's earnings will fall modestly in 2016. American Airlines has started to aggressively match Spirit's low prices, putting pressure on its fares. But Spirit's average fare is already on pace to drop below $60 this quarter -- it's not likely to go much lower.
Even with this fare war going on, analysts expect Spirit to earn more money in 2016 than the record profit it produced in 2014. In the long term, its industry-leading cost structure means that it should be able to remain profitable in good times and bad. In bad times, higher-cost carriers like American Airlines will run into trouble and start cutting back their capacity well before Spirit Airlines would have to.
Huge growth potential
Next, let's look at Spirit Airlines' massive growth opportunities. The company ended last quarter with 76 airplanes. That makes it one of the smaller commercial airlines in the U.S. By contrast, American Airlines has nearly 1,000 planes in its mainline fleet.
Spirit is still quite small compared to megacarriers like American Airlines. Image source: American Airlines
Spirit Airlines has firm plans to grow its fleet to 145 planes by the end of 2021. However, that's a very conservative estimate, as Spirit intends to increase its capacity by 15% to 20% annually for the foreseeable future. If it grows its fleet just 15% annually, it would end 2021 with about 185 planes -- more than twice as many as it has today.
There will be plenty of opportunities for growth beyond that. Spirit Airlines' management has stated that the company could potentially earn a 15% or higher profit margin on any route in the U.S. with more than 200 daily passengers. Hundreds of routes fit that description. Even in 2025, Spirit Airlines will have ample room left for growth.
Cheap valuation
The average U.S. stock trades for about 17 times forward earnings. Spirit Airlines clearly has a lot more growth potential than the average company. Yet its stock has lost more than half of its value in the past year, and now trades for less than 10 times earnings.
As Spirit Airlines executes its growth plan for the next decade and beyond, its earnings per share should skyrocket. EPS could quite plausibly quadruple or quintuple in that timeframe. If so, this beaten-down stock isn't likely to stay cheap for very long. Buying Spirit Airlines shares today and holding them until 2025 -- or longer -- could therefore be the first step to building long-term wealth.
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 1 Super Stock for 2025 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 - 2015 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.
|
Depending on fuel price trends and how the industry fare environment develops next year, it's possible that Spirit's earnings will fall modestly in 2016. In the long term, its industry-leading cost structure means that it should be able to remain profitable in good times and bad. Spirit Airlines' management has stated that the company could potentially earn a 15% or higher profit margin on any route in the U.S. with more than 200 daily passengers.
|
Image source: American Airlines Spirit Airlines has firm plans to grow its fleet to 145 planes by the end of 2021. 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 is one of the most profitable airlines in the world. Image source: American Airlines Spirit Airlines has firm plans to grow its fleet to 145 planes by the end of 2021. 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 is one of the most profitable airlines in the world. Spirit Airlines clearly has a lot more growth potential than the average company. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
|
8172.0
|
2015-11-27 00:00:00 UTC
|
The Zacks Analyst Blog Highlights: United Continental Holdings, Delta Air Lines, Spirit Airlines, American Airlines Group and Deutsche Lufthansa
|
AAL
|
https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-united-continental-holdings-delta-air-lines-spirit
|
nan
|
nan
|
For Immediate Release
Chicago, IL - November 27, 2015 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include United Continental Holdings ( UAL ), Delta Air Lines ( DAL ), Spirit Airlines ( SAVE ), American Airlines Group ( AAL ) and Deutsche Lufthansa Aktiengesellschaft ( DLAKY ).
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: Global Travel Alert Hurts Carriers; Delta, United Continental in Focus
The aftermath of the Nov 13 terror attacks in Paris, which claimed over a hundred lives apart from injuring many, refuses to die down. Other acts of terror prior to that, like the bombing of a Russian plane flying over Egypt, have made the possibility of such deadly attacks even more potent. In view of this grim backdrop, the U.S. State Department issued a worldwide travel alert for U.S. citizens on Monday.
The alert, which was the most eye-catching update in the space over the past week, adversely impacted the overall travel industry, which includes airline players. Moreover, the timing of the alert is also unfavorable as it comes just ahead of the otherwise travel-busy Thanksgiving week.
This apart, the other major updates in the airline space included the tentative labor deal inked by United Continental Holdings ( UAL ), the parent company of United Airlines, with its pilots' union and Delta Air Lines' ( DAL ) decision to increase its stake in the Mexican carrier Grupo Aeromexico S.A.B. de C.V.
On the price front, the NYSE ARCA Airline index inched up 1.1% over the past week. However, the negative impact of the travel alert on airline stocks can be gauged from the 2.4% decline in the index on Nov 24 to $90.89 compared to the Nov 23 figure of $93.11.
1. In a bid to bolster its presence in Latin America, Delta Air Lines announced its intention to increase its stake in Grupo Aeromexico S.A.B. de C.V. Delta aims to more than double its current holding in the Mexican carrier.
2. United Continental Holdings received encouraging news on the labor front with the company reaching "an agreement in principle" with its pilots' union (Air Line Pilots Association International or ALPA) to extend the agreement by two more years. The Chicago-based carrier reached the tentative deal with ALPA, which covers 12,000+ pilots at United Continental, more than a year before the current deal is scheduled to expire (in early 2017). The tentative agreement can be viewed as a positive development for United Continental, which saw a change at its helm recently. In Sep 2015, Jeff Smisek was replaced by Oscar Munoz as the company's chief executive officer (CEO). Even though Munoz is currently on medical leave, with Brett Hart temporarily in charge, the tentative deal is being deemed by market watchers as a result of the new CEO's efforts to improve labor relations. This marks a significant achievement for the company on the labor front, as Smisek's tenure had been characterized by frequent problems on the issue.
In a separate development, United Airlines struck a deal with Italy-based coffee firm, IllyCaffe, to offer premium blend coffee at its lounge and on board. Beginning next month, Illy dark roast and espresso will be served in United Club lounges in the U.S. airports replacing the FreshBrew brand.
3. The U.S. State Department issued a global travel alert to U.S. citizens citing the possibility of more terrorist attacks following the one in Paris and recent barbaric events worldwide. The alert, issued on Nov 23, 2015, is valid through Feb 24, 2016. Although the department does not advise citizens against traveling, the advisory does ask them to be more vigilant, especially in crowded places or while using any mode of transportation. The alert comes close on the heels of the discovery of an explosive belt near Paris and the mobile phone of a fugitive who is believed to have taken part in the Nov 13 attacks in the City of Light. The alert asks traveling U.S. citizens to take certain precautionary measures like following instructions provided by local authorities, staying in touch with family members, and registering with the department's Smart Traveler Enrollment Program. Naturally, the alert, which comes ahead of the busy Thanksgiving week, has badly hit the travel industry, including airline stocks. Carriers such as Spirit Airlines ( SAVE ), Delta, American Airlines Group ( AAL ) and United Continental shed value following the alert.
4. Germany's Deutsche Lufthansa Aktiengesellschaft ( DLAKY ), which has been constantly plagued by labor issues, looked slightly relieved with a Bloomberg report stating that its cabin crew has called off a strike that was scheduled for later this week. According to the report, Independent Flight Attendants Organization (UFO) cabin crew union may reach an agreement with the carrier by Dec 2 on the dispute pertaining to retirement and pension benefits. A meeting (employment summit) of the carrier with unions including representatives of pilots and ground crew is scheduled for that date. The German carrier and the UFO will enter arbitration regarding crew contracts as per report.
What's Next in the Airline Biz?
Apart from the investor day presentation of Hawaiian Holdings which is scheduled for Dec 2, investors are expected to remain glued to further travel related updates, if any, which will tend to impact stocks in the space. Moreover, it is likely to be a busy week for carriers ahead with the Thanksgiving week in progress. Stay tuned for further updates on the issue.
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
UNITED CONT HLD (UAL): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
SPIRIT AIRLINES (SAVE): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
LUFTHANSA -ADR (DLAKY): 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 United Continental Holdings ( UAL ), Delta Air Lines ( DAL ), Spirit Airlines ( SAVE ), American Airlines Group ( AAL ) and Deutsche Lufthansa Aktiengesellschaft ( DLAKY ). Carriers such as Spirit Airlines ( SAVE ), Delta, American Airlines Group ( AAL ) and United Continental shed value following the alert. Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report To read this article on Zacks.com click here.
|
Stocks recently featured in the blog include United Continental Holdings ( UAL ), Delta Air Lines ( DAL ), Spirit Airlines ( SAVE ), American Airlines Group ( AAL ) and Deutsche Lufthansa Aktiengesellschaft ( DLAKY ). Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report To read this article on Zacks.com click here. Carriers such as Spirit Airlines ( SAVE ), Delta, American Airlines Group ( AAL ) and United Continental shed value following the alert.
|
Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks recently featured in the blog include United Continental Holdings ( UAL ), Delta Air Lines ( DAL ), Spirit Airlines ( SAVE ), American Airlines Group ( AAL ) and Deutsche Lufthansa Aktiengesellschaft ( DLAKY ). Carriers such as Spirit Airlines ( SAVE ), Delta, American Airlines Group ( AAL ) and United Continental shed value following the alert.
|
Stocks recently featured in the blog include United Continental Holdings ( UAL ), Delta Air Lines ( DAL ), Spirit Airlines ( SAVE ), American Airlines Group ( AAL ) and Deutsche Lufthansa Aktiengesellschaft ( DLAKY ). Carriers such as Spirit Airlines ( SAVE ), Delta, American Airlines Group ( AAL ) and United Continental shed value following the alert. Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report To read this article on Zacks.com click here.
|
8173.0
|
2015-11-24 00:00:00 UTC
|
Nasdaq 100 Movers: AAL, NXPI
|
AAL
|
https://www.nasdaq.com/articles/nasdaq-100-movers-aal-nxpi-2015-11-24
|
nan
|
nan
|
In early trading on Tuesday, shares of NXP Semiconductors ( NXPI ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 6.8%. Year to date, NXP Semiconductors registers a 9.8% gain.
And the worst performing Nasdaq 100 component thus far on the day is American Airlines Group ( AAL ), trading down 2.9%. American Airlines Group is lower by about 23.4% looking at the year to date performance.
Two other components making moves today are VimpelCom ( VIP ), trading down 2.9%, and Analog Devices ( ADI ), trading up 5.8% on the day.
VIDEO: Nasdaq 100 Movers: AAL, NXPI
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.
|
And the worst performing Nasdaq 100 component thus far on the day is American Airlines Group ( AAL ), trading down 2.9%. VIDEO: Nasdaq 100 Movers: AAL, NXPI 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 is lower by about 23.4% looking at the year to date performance.
|
And the worst performing Nasdaq 100 component thus far on the day is American Airlines Group ( AAL ), trading down 2.9%. VIDEO: Nasdaq 100 Movers: AAL, NXPI 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.
|
And the worst performing Nasdaq 100 component thus far on the day is American Airlines Group ( AAL ), trading down 2.9%. VIDEO: Nasdaq 100 Movers: AAL, NXPI 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 Tuesday, shares of NXP Semiconductors ( NXPI ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 6.8%.
|
And the worst performing Nasdaq 100 component thus far on the day is American Airlines Group ( AAL ), trading down 2.9%. VIDEO: Nasdaq 100 Movers: AAL, NXPI 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 Tuesday, shares of NXP Semiconductors ( NXPI ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 6.8%.
|
8174.0
|
2015-11-23 00:00:00 UTC
|
What to Expect from Raven Industries' (RAVN) Q3 Earnings?
|
AAL
|
https://www.nasdaq.com/articles/what-to-expect-from-raven-industries-ravn-q3-earnings-2015-11-23
|
nan
|
nan
|
Raven Industries Inc.RAVN is scheduled to release third-quarter fiscal 2016 results before the opening bell on Nov 24, 2015. Last quarter, the company posted a negative earnings surprise of 33.33%. Moreover, Raven delivered an average negative surprise of 8.46% in the trailing four quarters.
Let's see how things are shaping up for this announcement.
Factors at Play
Raven will continue to invest in its business by funding key R&D initiatives and growth related capital projects to maintain competitive advantage in the marketplace. The company announced significant restructuring actions to address the market conditions.
Notably, the company's efforts to transform its business by investing in essential strategic initiatives will likely enhance its performance. The company will optimize internal investments in each of the three operating divisions and invest in projects with greatest long-term growth potential.
Raven is positive about its Aerostar segment's performance in the second half of fiscal 2016 as the second half is a seasonally stronger period for sales of proprietary products as well as the traditional time for contract awards. The potential of Google's Project Loon and Vista Research are intact and the company continues to progress considerably.
However, Raven remains cautious about expenses to be incurred in order to improve its performance in the second half. Further, Raven expects end-market conditions for Applied Technology to further deteriorate through the rest of fiscal 2016 as several original equipment manufacturers (OEM) are reducing production levels. The company is also worried about recovery in demand due to persistently rising input costs and waning grower sentiment.
Moreover, Raven's performance will be hurt by reduced capital expenditure, decline in oil prices , fluctuation in exchange rates, increased competition and volatility in monetary and fiscal policies.
Earnings Whispers
Our proven model does not conclusively show that Raven will beat estimates this season. 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. This is not the case here as you will see below.
Zacks ESP: The Earnings ESP for Raven is 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are at 17 cents.
Zacks Rank: Raven has a Zacks Rank #3 (Hold), which combined with a 0.00% ESP, makes a surprise prediction difficult. 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 negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
ADTRAN Inc. ADTN has an earnings ESP of +100% and a Zacks Rank #3.
United Technologies Corporation UTX has an earnings ESP of +0.67% and a Zacks Rank #3.
American Airlines Group Inc. AAL has an earnings ESP of +0.53% and a Zacks Rank #3.
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
ADTRAN INC (ADTN): Free Stock Analysis Report
UTD TECHS CORP (UTX): Free Stock Analysis Report
RAVEN INDS INC (RAVN): 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 has an earnings ESP of +0.53% and a Zacks Rank #3. Click to get this free report ADTRAN INC (ADTN): Free Stock Analysis Report UTD TECHS CORP (UTX): Free Stock Analysis Report RAVEN INDS INC (RAVN): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Factors at Play Raven will continue to invest in its business by funding key R&D initiatives and growth related capital projects to maintain competitive advantage in the marketplace.
|
Click to get this free report ADTRAN INC (ADTN): Free Stock Analysis Report UTD TECHS CORP (UTX): Free Stock Analysis Report RAVEN INDS INC (RAVN): 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 has an earnings ESP of +0.53% and a Zacks Rank #3. Stocks to Consider Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter: ADTRAN Inc. ADTN has an earnings ESP of +100% and a Zacks Rank #3.
|
Click to get this free report ADTRAN INC (ADTN): Free Stock Analysis Report UTD TECHS CORP (UTX): Free Stock Analysis Report RAVEN INDS INC (RAVN): 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 has an earnings ESP of +0.53% and a Zacks Rank #3. 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 negative estimate revisions.
|
American Airlines Group Inc. AAL has an earnings ESP of +0.53% and a Zacks Rank #3. Click to get this free report ADTRAN INC (ADTN): Free Stock Analysis Report UTD TECHS CORP (UTX): Free Stock Analysis Report RAVEN INDS INC (RAVN): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Factors at Play Raven will continue to invest in its business by funding key R&D initiatives and growth related capital projects to maintain competitive advantage in the marketplace.
|
8175.0
|
2015-11-23 00:00:00 UTC
|
Zacks Industry Outlook Highlights: Southwest Airlines, JetBlue Airways, American Airlines and Delta Air Lines
|
AAL
|
https://www.nasdaq.com/articles/zacks-industry-outlook-highlights%3A-southwest-airlines-jetblue-airways-american-airlines
|
nan
|
nan
|
For Immediate Release
Chicago, IL - November 23, 2015 - Today, Zacks Equity Research discusses the Airlines, part 3, including Southwest Airlines ( LUV ), JetBlue Airways Corporation ( JBLU ), American Airlines Group ( AAL ) and Delta Air Lines Inc. ( DAL ).
Industry: Airlines, part 3
Link: http://www.zacks.com/commentary/62947/should-airline-stocks-de-plane-your-portfolio
Despite the massive benefits reaped by airline stocks, courtesy the downswing in oil prices , the industry still has several hurdles facing it. Issues like capacity woes, declining passenger revenue per available seat mile (PRASM), multiple probes and labor strife continue to hurt stocks in the aviation space. These headwinds resulted in the NYSE ARCA Airline index losing over 11% through the first ten months of 2015.
We hereby discuss a few key factors that investors should watch out for when investing in the airlines sector.
Capacity Issues
It is no secret that pricing and capacity worries have plagued airline stocks for most of 2015. The concerns originated in May 2015, courtesy Southwest Airlines' ( LUV ) announcement of its plans to raise its capacity in the band of 7% to 8% in 2015 as opposed to the earlier projection of a 7% increase. Following widespread investor panic, the carrier reverted to a 7% capacity growth plan and reiterated the same in the recent third quarter 2015 conference call.
The fact that capacity fears are not a thing of the past was reflected again when shares of low-cost carrier JetBlue Airways Corporation ( JBLU ) declined on Oct 27 despite recording higher-than-expected revenues and earnings in the third quarter of 2015. The company voiced its expectation of a capacity increase in the band of 8.5% to 10.5% for the fourth quarter and in the band of 8.5% to 9.5% for full year 2015. The prior guidance had hinted at a capacity expansion at the higher end of the 7% to 9% range for 2015. This increased capacity guidance for 2015 triggered fresh capacity-related fears among investors, dragging the stock down.
PRASM Woes
Stocks in the airline space have been hurt by the continuous decline in PRASM, a measure of sales relative to capacity for a carrier. For example, consolidated PRASM at American Airlines Group ( AAL ) declined 6.8% to 13.16 cents in the third quarter of 2015. The metric is projected to decline in the range of 5% to 7% in the fourth quarter. PRASM at Delta Air Lines Inc. ( DAL ) declined 5% year over year in the third quarter to 14.10 cents mainly due to currency fluctuations. The metric is projected to decline in the band of 2.5% to 4.5% in the fourth quarter.
In fact, the 0.6% decline in PRASM at JetBlue in the third quarter was responsible for the stock losing value on Oct 27, 2015, apart from the increased capacity guidance discussed above. Evidently thus, PRASM has, for quite some time now, become the Achilles' heel of airline companies.
Moreover, Delta will apparently exit the Airlines for America Trade Association next year as it aims to make "better use" of the annual membership fee it paid to the trade group. Apparently, the carrier did not see eye to eye with other members on some key issues. Whatever the reason, we believe the exit of such a high-profile airline player from the group cannot be seen in a very positive light.
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
SOUTHWEST AIR (LUV): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
AMER AIRLINES (AAL): 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 - November 23, 2015 - Today, Zacks Equity Research discusses the Airlines, part 3, including Southwest Airlines ( LUV ), JetBlue Airways Corporation ( JBLU ), American Airlines Group ( AAL ) and Delta Air Lines Inc. ( DAL ). For example, consolidated PRASM at American Airlines Group ( AAL ) declined 6.8% to 13.16 cents in the third quarter of 2015. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report AMER AIRLINES (AAL): 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 - November 23, 2015 - Today, Zacks Equity Research discusses the Airlines, part 3, including Southwest Airlines ( LUV ), JetBlue Airways Corporation ( JBLU ), American Airlines Group ( AAL ) and Delta Air Lines Inc. ( DAL ). Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here. For example, consolidated PRASM at American Airlines Group ( AAL ) declined 6.8% to 13.16 cents in the third quarter of 2015.
|
For Immediate Release Chicago, IL - November 23, 2015 - Today, Zacks Equity Research discusses the Airlines, part 3, including Southwest Airlines ( LUV ), JetBlue Airways Corporation ( JBLU ), American Airlines Group ( AAL ) and Delta Air Lines Inc. ( DAL ). Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here. For example, consolidated PRASM at American Airlines Group ( AAL ) declined 6.8% to 13.16 cents in the third quarter of 2015.
|
For Immediate Release Chicago, IL - November 23, 2015 - Today, Zacks Equity Research discusses the Airlines, part 3, including Southwest Airlines ( LUV ), JetBlue Airways Corporation ( JBLU ), American Airlines Group ( AAL ) and Delta Air Lines Inc. ( DAL ). For example, consolidated PRASM at American Airlines Group ( AAL ) declined 6.8% to 13.16 cents in the third quarter of 2015. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
8176.0
|
2015-11-23 00:00:00 UTC
|
United Airlines, IllyCaffe Unite to Boost Customer Experience
|
AAL
|
https://www.nasdaq.com/articles/united-airlines-illycaffe-unite-to-boost-customer-experience-2015-11-23
|
nan
|
nan
|
Recently, United Airlines - the wholly owned subsidiary of United Continental Holdings Inc.UAL - struck a deal with Italy-based coffee firm, IllyCaffe, to offer premium blend coffee at its lounge and on board.
Beginning next month, the Illy dark roast and espresso will be served in United Club lounges in the U.S. airports replacing the FreshBrew brand. However, onboard passengers will have to wait till summer 2016 to enjoy the coffee.
Three premium U.S. carriers - United Continental, Delta Air Lines DAL and American Airlines Group Inc. AAL - have a strong international presence as well as huge demand for business class seats. Hence, these carriers need to be more careful while selecting a particular brand of coffee. United Continental conducted several taste tests before signing the deal with IllyCaffe.
In order to retain its loyal customer base, United Continental consistently makes efforts to improve passenger comfort levels. The carrier recently opened United Club lounges in Atlanta and San Francisco. In fact, it plans to invest nearly $100 million over the next few years in this regard.
United Continental will also offer chef-inspired dishes to premium cabin passengers traveling to North and Latin America. The carrier is also offering comfortable, custom-made seats in first-class cabins in nearly 200 narrowbody aircrafts.
We believe that the introduction of such value-added services will help United Airlines to not only retain passengers but also improve air traffic, moving ahead.
United Continental currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same space is Southwest Airlines Co. LUV 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
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.
|
Three premium U.S. carriers - United Continental, Delta Air Lines DAL and American Airlines Group Inc. AAL - have a strong international presence as well as huge demand for business class seats. 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. Beginning next month, the Illy dark roast and espresso will be served in United Club lounges in the U.S. airports replacing the FreshBrew brand.
|
Three premium U.S. carriers - United Continental, Delta Air Lines DAL and American Airlines Group Inc. AAL - have a strong international presence as well as huge demand for business class seats. 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.
|
Three premium U.S. carriers - United Continental, Delta Air Lines DAL and American Airlines Group Inc. AAL - have a strong international presence as well as huge demand for business class seats. 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. Recently, United Airlines - the wholly owned subsidiary of United Continental Holdings Inc.UAL - struck a deal with Italy-based coffee firm, IllyCaffe, to offer premium blend coffee at its lounge and on board.
|
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. Three premium U.S. carriers - United Continental, Delta Air Lines DAL and American Airlines Group Inc. AAL - have a strong international presence as well as huge demand for business class seats. Recently, United Airlines - the wholly owned subsidiary of United Continental Holdings Inc.UAL - struck a deal with Italy-based coffee firm, IllyCaffe, to offer premium blend coffee at its lounge and on board.
|
8177.0
|
2015-11-20 00:00:00 UTC
|
Is American Airlines (AAL) Stock a Solid Choice Right Now?
|
AAL
|
https://www.nasdaq.com/articles/is-american-airlines-aal-stock-a-solid-choice-right-now-2015-11-20
|
nan
|
nan
|
One stock that might be an intriguing choice for investors right now is American Airlines Group Inc.AAL . This is because this security in the Airlines space is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective.
This is important because, often times, a rising tide will lift all boats in an industry, as there can be broad trends taking place in a segment that are boosting securities across the board. This is arguably taking place in the Airlines space as it currently has a Zacks Industry Rank of 72 out of more than 250 industries, suggesting it is well-positioned from this perspective, especially when compared to other segments out there.
Meanwhile, American Airlines is actually looking pretty good on its own too. The firm has seen solid earnings estimate revision activity over the past month, suggesting analysts are becoming a bit more bullish on the firm's prospects in both the short and long term.
In fact, over the past month, current quarter estimates have risen from $1.85 per share to $1.88 per share, while current year estimates have risen from $8.89 a share to $8.98 a share. The company currently carries a Zacks Rank #3 (Hold), which is also a favorable signal.
So, if you are looking for a decent pick in a strong industry, consider American Airlines. Not only is its industry currently in the top third, but it is seeing solid estimate revisions as of late, suggesting it could be a very interesting choice for investors seeking a name in this great industry segment.
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.
|
One stock that might be an intriguing choice for investors right now is American Airlines Group Inc.AAL . Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. This is because this security in the Airlines space is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective.
|
One stock that might be an intriguing choice for investors right now is American Airlines Group Inc.AAL . Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. This is because this security in the Airlines space is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective.
|
One stock that might be an intriguing choice for investors right now is American Airlines Group Inc.AAL . Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. This is because this security in the Airlines space is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective.
|
One stock that might be an intriguing choice for investors right now is American Airlines Group Inc.AAL . Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. This is because this security in the Airlines space is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective.
|
8178.0
|
2015-11-20 00:00:00 UTC
|
Spirit Airlines Is Poised To Be The Next Ryanair
|
AAL
|
https://www.nasdaq.com/articles/spirit-airlines-poised-be-next-ryanair-2015-11-20
|
nan
|
nan
|
By Whitney Tilson :
On Monday afternoon I presented Spirit Airlines ( SAVE ) as my favorite long idea at the Robin Hood Investors Conference. Since then, I've updated my slides and posted them here .
My investment thesis can be summarized in one sentence: there are very few companies I'm aware of that are growing 20%+, with 25%+ operating margins, 25%+ returns on equity, with net cash positions, whose stocks are trading at a P/E of less than 9x.
After soaring from $10 to $85 from 2011 through 2014, the stock has been crushed this year for a variety of reasons that I'll discuss below, tumbling 51%, far worse than any other airline, as these two charts show:
I think this selloff is massively overdone. Despite its significant customer service problems and current price war with American Airlines ( AAL ), Spirit is - and will remain - an excellent business and has tremendous room to grow over the next decade.
Background
Spirit has 76 aircraft operating more than 350 daily flights to 56 destinations in the U.S., Latin America and the Caribbean. It is an ultra-low-cost carrier ((ULCC)), which is not to be confused with low-cost carriers like Southwest ( LUV ), JetBlue ( JBLU ) and Virgin America ( VA ). ULCCs include Allegiant (ALGT) and Frontier in the U.S. and Ryanair (RYAAY) in Europe.
Growth
Spirit has been growing like a weed, tripling its revenue and more than quadrupling its operating income since the 2009 low, as this chart shows:
More importantly, Spirit has an enormous growth runway in front of it. It serves fewer than 200 markets currently, but believes that more than 500 markets meet its threshold for growth. I don't doubt this and think that Spirit will continue to grow at a rapid clip for at least another decade, just as Ryanair has done in Europe over the past decade, as shown in this chart (courtesy of Kellogg MBAs Justin Hess, Alexander Hunstad and David van der Keyl):
If I'm right, then I expect Spirit's stock will perform along the same lines as Ryanair's. Here's a chart showing how well Ryanair's stock ((ADR)) has done over the past 14 years:
Spirit's Cost Advantage
The key to Spirit's success is its ultra-low costs, which translate into almost absurdly low prices (one personal example: yesterday I booked a round-trip nonstop flight on Dec. 8-9 from NYC (LaGuardia) to Dallas ((DFW)), for $43.09 each way). Here's a chart from Spirit's investor presentation showing its cost advantage vs. its major competitors:
(Note in particular the 62% cost advantage vs. American, which has started a price war against Spirit - discussed below. Hmmm, I wonder who's going to win that one???)
In fact, Spirit's costs are so low that its total average price (including extras and the company's very high profit margin) is lower than its competitors' costs , as this chart shows:
Spirit's extremely low costs are driven by many factors:
One type of plane and one class of service
Cramming the maximum number of seats (~20% more) onto every plane by reducing legroom and having seats that don't recline
No seat-back pockets, wifi or entertainment systems
All direct flights (no hub-and-spoke)
A limited frequent flyer program
Personnel who do multiple jobs (e.g., flight attendants who also clean the plane and act as gate agents)
Turning aircraft quickly and flying at all hours, thereby maximizing daily flight time (12.7 hours/day for Spirit; 11.8 for JetBlue; 10.9 for Southwest)
Rapid growth means lots of new airplanes, which reduces maintenance expense
Every one of these factors, other than the last one, strikes me as sustainable - as Ryanair has proved.
Spirit's Price Advantage
Spirit charges extremely low base fares ($66.96 in Q3) and then charges extra for nearly everything such as a seat assignment, any bag beyond a small carry-on item, all drinks and food, etc. These extras averaged $53.39 for Spirit last quarter, resulting in total revenue per passenger flight segment of $120.35. While these extras cause some travelers to feel nickeled-and-dimed, almost all travelers on Spirit pay less in total than they would on any other airline (even if one adds Spirit's charge for seat selection and one bag), as this chart shows:
Spirit Stimulates Demand
Spirit's prices are so low, in fact, that its entry into a market stimulates demand, as these two charts show:
This demand stimulation is really important because if Spirit is filling its planes in new markets with new travelers (rather than stealing them from another airline), there's less likely to be a fierce competitive response.
Stable Revenue from Extras
While charging for everything beyond a seat and a small carry-on bag may irritate some customers, it provides Spirit with a very stable and profitable source of revenue. As one can see from this chart, Spirit's average ticket price has dropped significantly (by 15%) this year, yet total revenue is down only 10% because of stable non-ticket revenue.
Why Has the Stock Been Cut in Half this Year?
The stock's halving this year is due to a variety of factors, the most important of which is that American, perhaps emboldened by low fuel prices, rolled out an aggressive price-matching strategy in June that has impacted Spirit's pricing, causing Spirit to report in Q3:
In addition, Spirit's load factor in Q3 fell from 87.6% to 85.2% YOY and Q4 guidance is for unit revenue to decline even more than Q3.
This price war is affecting both Spirit's revenue and margins, which has led analysts to project that earnings per share will be roughly flat in 2016. The growth investors who owned this stock above $80 hate no growth, even for a year, so they've fled - and no self-respecting value investor would ever own an airline stock, right?
There's also concern that Spirit is growing too fast (available seat miles rose 34% in Q3), though this will likely be the peak as capacity growth is projected to be only ~20% in 2016.
In summary, the near-term outlook for Spirit is cloudy, leading analysts and investors to fear the worst (more revenue and earnings reductions), so most of them don't want to own the stock until there's more clarity. Here is the typical analyst view today (from Credit Suisse): "We see few catalysts near-term to bring investors back. Q4 needs a revenue beat & guidance that shows unit revenue declines have bottomed - this won't be known until February."
Why I Think the Analysts Are Wrong
Analysts are, I think, making the classic mistake of projecting the immediate past indefinitely into the future. This chart shows Spirit's total revenue per flight segment, with 2016-2018 numbers based on current analyst estimates:
I think this is overly pessimistic. Analysts are not just projecting a continuation of the depressed 2015 number - they're forecasting that the decline from 2014 doubles , resulting in total revenue per flight segment of barely over $100, and staying that way for years. This is ridiculous.
First, with 62% higher costs, American is surely incurring significant losses trying to match Spirit's pricing, which is clearly unsustainable. My understanding is that this may be a temporary strategy to push Spirit out of a few key markets.
And it may succeed. Spirit has demonstrated a willingness to avoid share battles and move aircraft to more attractive markets, which is likely what will happen if the price war persists. As Spirit noted in its latest investor presentation, it has "no emotional attachment to any particular route - if a route is underperforming expectations and we no longer believe it will be able to achieve its target threshold, it is cut from the schedule."
In summary, as this chart (again, courtesy of the three Kellogg MBAs) shows, the major drivers of Spirit's revenue decline in 2015 are very likely to at least stabilize and even reverse in 2016 (and thereafter):
Spirit's Mouth-Watering Economic Characteristics
Spirit has astonishingly good economic characteristics. It was one of the only airlines to make a profit in both 2008 and 2009, and has consistently high margins that are the envy of the industry. This chart shows Spirit's net income margin every quarter since Q1 '09:
Now here's the same chart showing Spirit's margin compared to every other U.S. airline - note that while Spirit isn't the highest every quarter, it's consistently one of the best:
Lastly, this chart shows Spirit's high and rising returns on assets and equity:
Spirit's Ridiculously Cheap Stock
So what would you pay for the stock of a company with an enormous (and likely permanent) cost advantage, growing 20%+ annually, with 25%+ operating margins, 25%+ returns on equity, and a net cash position? 15x earnings? 20x? In fact, Ryanair today trades at 23x 2015 earnings and Southwest in its early years (when it was the size of Spirit today) also traded at similar multiples.
Yet Spirit today trades at less than 9x trailing, 2015 and 2016 estimated earnings, at close to the lowest P/E ratio it's traded at in years, as this chart shows:
Spirit is also trading at a steep discount to all of its peers, both domestically and internationally, as this table shows:
Lastly, despite growing both its revenue and profits faster than its most similar peer, Allegiant, Spirit's stock trades at a huge discount to Allegiant's on every metric, as this chart shows:
But What About Travelers Hating Spirit?
A quick Google search reveals endless stories that are summarized in this blurb in AirlineReporter.com:
Heck, even my wife cringed when I told her I bought the stock, and when I disclosed this purchase to my investors, I felt compelled to write: "I know, I know, it's really horrible airline - but at least read my slides with an open mind."
So let's look at the facts. Spirit's customer service problems fall into two areas: reality and perception. Regarding the former, according to the Department of Transportation, Spirit consistently is among the worst airlines in terms of on-time arrivals, though its cancellation rate it about average (in the first nine months of 2015, Spirit's percentage of flights cancelled was better than the industry in four months and worse in five, with the average slightly worse: 1.94% vs. 1.73%).
On the plus side, the rate of mishandled bags is 18% better than average (2.73 vs. 3.33 reports/1,000 passengers), and the rate of "bumping" passengers is half the average.
So, overall, Spirit does indeed have a genuine service problem, but its perception problem might be worse. Many of Spirit's customers (especially first-time ones) aren't used to being charged for so many extras, so clearly Spirit needs to do a better job of setting expectations (which it's trying to do).
Add up both the reality and perception problems and Spirit's complaint rate in the first nine months of this year was 6x higher than average (11.93 complaints/100,000 enplanements vs. 1.97). (While terrible, it's still only one complaint for every 8,400 passengers.) Perhaps the best that can be said about Spirit's customer service is that there's a lot of room for improvement!
Surely so many customers hating Spirit will eventually cripple the business, right? This was my concern when I first looked at this stock three years ago - and was the main reason I didn't buy it (causing me to miss the run from $20 to over $80 - arrrrh!).
I now realize that this was a serious mistake, mainly because I was thinking about this business from my perspective - but I'm not the customer Spirit is targeting! I am willing/able to pay an extra $50-$100 for a flight with better service, a few extra inches of legroom, a seat that reclines, etc., but many (most?) Americans don't have this luxury.
An article in AirReporter.com has a good summary:
Price Target
Most companies with Spirit's characteristics - growing 20%+ annually with a long runway, 25%+ operating margins and returns on equity, and a net cash position - trade above 20x earnings. Indeed, Ryanair and Southwest consistently traded at 15-20x forward earnings in the early stages of their growth cycles.
Applying a 15 multiple to 2016 estimates of $4.03 results in a stock price of $60.45, 64% above today's price. That sounds about right to me for a one-year target - and I think the upside is much higher over many years, which is how long I hope to own this stock.
See also Peabody Energy, Illinois Basin Coal And Cognitive Dissonance on seekingalpha.com
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.
|
Despite its significant customer service problems and current price war with American Airlines ( AAL ), Spirit is - and will remain - an excellent business and has tremendous room to grow over the next decade. In fact, Spirit's costs are so low that its total average price (including extras and the company's very high profit margin) is lower than its competitors' costs , as this chart shows: Spirit's extremely low costs are driven by many factors: One type of plane and one class of service Cramming the maximum number of seats (~20% more) onto every plane by reducing legroom and having seats that don't recline No seat-back pockets, wifi or entertainment systems All direct flights (no hub-and-spoke) A limited frequent flyer program Personnel who do multiple jobs (e.g., flight attendants who also clean the plane and act as gate agents) Turning aircraft quickly and flying at all hours, thereby maximizing daily flight time (12.7 hours/day for Spirit; 11.8 for JetBlue; 10.9 for Southwest) Rapid growth means lots of new airplanes, which reduces maintenance expense Every one of these factors, other than the last one, strikes me as sustainable - as Ryanair has proved. A quick Google search reveals endless stories that are summarized in this blurb in AirlineReporter.com: Heck, even my wife cringed when I told her I bought the stock, and when I disclosed this purchase to my investors, I felt compelled to write: "I know, I know, it's really horrible airline - but at least read my slides with an open mind."
|
Despite its significant customer service problems and current price war with American Airlines ( AAL ), Spirit is - and will remain - an excellent business and has tremendous room to grow over the next decade. Here's a chart from Spirit's investor presentation showing its cost advantage vs. its major competitors: (Note in particular the 62% cost advantage vs. American, which has started a price war against Spirit - discussed below. This chart shows Spirit's total revenue per flight segment, with 2016-2018 numbers based on current analyst estimates: I think this is overly pessimistic.
|
Despite its significant customer service problems and current price war with American Airlines ( AAL ), Spirit is - and will remain - an excellent business and has tremendous room to grow over the next decade. While these extras cause some travelers to feel nickeled-and-dimed, almost all travelers on Spirit pay less in total than they would on any other airline (even if one adds Spirit's charge for seat selection and one bag), as this chart shows: Spirit Stimulates Demand Spirit's prices are so low, in fact, that its entry into a market stimulates demand, as these two charts show: This demand stimulation is really important because if Spirit is filling its planes in new markets with new travelers (rather than stealing them from another airline), there's less likely to be a fierce competitive response. This chart shows Spirit's net income margin every quarter since Q1 '09: Now here's the same chart showing Spirit's margin compared to every other U.S. airline - note that while Spirit isn't the highest every quarter, it's consistently one of the best: Lastly, this chart shows Spirit's high and rising returns on assets and equity: Spirit's Ridiculously Cheap Stock So what would you pay for the stock of a company with an enormous (and likely permanent) cost advantage, growing 20%+ annually, with 25%+ operating margins, 25%+ returns on equity, and a net cash position?
|
Despite its significant customer service problems and current price war with American Airlines ( AAL ), Spirit is - and will remain - an excellent business and has tremendous room to grow over the next decade. In fact, Spirit's costs are so low that its total average price (including extras and the company's very high profit margin) is lower than its competitors' costs , as this chart shows: Spirit's extremely low costs are driven by many factors: One type of plane and one class of service Cramming the maximum number of seats (~20% more) onto every plane by reducing legroom and having seats that don't recline No seat-back pockets, wifi or entertainment systems All direct flights (no hub-and-spoke) A limited frequent flyer program Personnel who do multiple jobs (e.g., flight attendants who also clean the plane and act as gate agents) Turning aircraft quickly and flying at all hours, thereby maximizing daily flight time (12.7 hours/day for Spirit; 11.8 for JetBlue; 10.9 for Southwest) Rapid growth means lots of new airplanes, which reduces maintenance expense Every one of these factors, other than the last one, strikes me as sustainable - as Ryanair has proved. The growth investors who owned this stock above $80 hate no growth, even for a year, so they've fled - and no self-respecting value investor would ever own an airline stock, right?
|
8179.0
|
2015-11-19 00:00:00 UTC
|
Zacks Industry Outlook Highlights: Delta Air Lines, American Airlines, United Continental, JetBlue Airways and Southwest Airlines
|
AAL
|
https://www.nasdaq.com/articles/zacks-industry-outlook-highlights%3A-delta-air-lines-american-airlines-united-continental
|
nan
|
nan
|
For Immediate Release
Chicago, IL - November 19, 2015 - Today, Zacks Equity Research discusses the Airlines, part 1, including Delta Air Lines Inc. ( DAL ), American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ).
Industry: Airlines, part 1
Link: http://www.zacks.com/commentary/62723/airline-industry-stock-outlook---nov-2015
Weak Oil Drives Q3 Earnings Performances
The series of earnings beats by airline companies has reinforced the well-documented fact that soft oil prices are nothing short of a godsend for stocks in the aviation space. Delta Air Lines Inc. ( DAL ) kick-started the third quarter earnings season for airline stocks on Oct 14, with a positive earnings surprise of 1.75%, courtesy of weak oil prices.
Other major carriers like American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ) followed Delta in delivering third quarter earnings beats on the back of low fuel costs. Needless to say, the oil glut that has been on for well over a year now has resulted in massive savings for carriers.
For example, American Airlines Group, which does not hedge fuel costs, expects to generate savings of approximately $5 billion in 2015. The robust financial health of most U.S. carriers has prompted them to invest substantially toward improving the flying experience for travelers, in a bid to stay afloat in the competitive airline space.
Additionally, financial stability has allowed for the launch of share repurchase programs, increased dividend payments and significant reduction of debt levels at the companies. On its third quarter conference call, American Airlines announced that its board has authorized an additional $2 billion share buyback program that is expected to be completed by Dec 31, 2016.
However, as in the second quarter, revenue growth was sluggish in the third quarter as well, owing to the dollar's strength.
Oil Weakness Key to IATA's Bullish Forecast
That airline stocks are likely to continue their profitable run through the rest of 2015 had been hinted at by the International Air Transport Association's (IATA) rosy forecast earlier in the year. The trade association now expects profits from the aviation industry to touch $29.3 billion in 2015 as opposed to the earlier projection of $25 billion, thanks to weak oil prices.
The bulk of the global profits ($15.7 billion) is expected from the North American region. The other regions, namely Asia-Pacific, Europe, Latin America, Middle East and Africa, are expected to generate post-tax net profit of $5.1 billion, $5.8 billion, $0.6 billion, $1.8 billion and $0.1 billion, respectively. Global net profit margin is expected to expand to 4% in 2015. However, global revenues are anticipated to decline 0.7% to $727 billion, mainly due to the strength of the dollar.
The IATA suggests that demand for passenger travel will improve in 2015 from 2014 levels, thanks to an improving economy. Customers will benefit from cheaper air travel, thanks to low oil prices, as one-way fares are expected to be slashed by 9.3% this year. According to the forecast, load factor (% of seats filled by passengers) for 2015 is expected to touch a record-high of 80.2%.
The research firm has also predicted that airline companies will earn $8.27 per passenger in 2015, up 67.4% year over year. The firm holds that oil prices will continue to fall in 2015 with the average price in the year hovering around $78 per barrel, down 33%.
The busy Labor Day holiday period (Sep 2-8) enjoyed by U.S. carriers this year further highlights the current prosperity. Moreover, the monthly global traffic numbers released by the IATA for September highlight the increased travel demand. Global travel demand improved 7.3% during the month.
Load factor climbed to 80.7% as traffic growth outpaced capacity expansion which was up 6.6%. International travel demand (up 7%) was driven by strong performance of carriers mainly from North America, the Asia-Pacific, Latin America, Europe and the Middle East while strong numbers from India, Russia and China resulted in a healthy increase in domestic traffic (up 7.8%). In Aug 2015, global travel demand had improved by 7.1%.
Not All Roses, Some Brickbats as Well
Despite the massive fall in airlines' largest input cost, it has not been all smooth sailing for them this year. The industry has experienced quite a few challenges led by capacity and pricing worries. Investors feared that airline capacity growth at a rate higher than the U.S. GDP will lead to an oversupplied market.
The worries originated in May 2015, courtesy Southwest Airlines' announcement of its plans to raise its capacity in the band of 7% to 8% in 2015 as opposed to the earlier projection of a 7% increase. However, following widespread investor panic, the carrier reverted to a 7% capacity growth plan and reiterated the same in the recent third quarter 2015 conference call.
Moreover, the ongoing weakness in passenger revenue per available seat mile (PRASM: a measure of unit revenue), which has hurt stocks in the space, can also be attributed partly to weak oil prices, making it a double-edged sword for carriers. Currency headwinds, coupled with lower fuel surcharges on international flights due to weak oil prices, pressurized this key metric.
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
UNITED CONT HLD (UAL): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
SOUTHWEST AIR (LUV): 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 - November 19, 2015 - Today, Zacks Equity Research discusses the Airlines, part 1, including Delta Air Lines Inc. ( DAL ), American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ). Other major carriers like American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ) followed Delta in delivering third quarter earnings beats on the back of low fuel costs. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report To read this article on Zacks.com click here.
|
For Immediate Release Chicago, IL - November 19, 2015 - Today, Zacks Equity Research discusses the Airlines, part 1, including Delta Air Lines Inc. ( DAL ), American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ). Other major carriers like American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ) followed Delta in delivering third quarter earnings beats on the back of low fuel costs. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report To read this article on Zacks.com click here.
|
For Immediate Release Chicago, IL - November 19, 2015 - Today, Zacks Equity Research discusses the Airlines, part 1, including Delta Air Lines Inc. ( DAL ), American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ). Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report To read this article on Zacks.com click here. Other major carriers like American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ) followed Delta in delivering third quarter earnings beats on the back of low fuel costs.
|
For Immediate Release Chicago, IL - November 19, 2015 - Today, Zacks Equity Research discusses the Airlines, part 1, including Delta Air Lines Inc. ( DAL ), American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ). Other major carriers like American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ) followed Delta in delivering third quarter earnings beats on the back of low fuel costs. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report To read this article on Zacks.com click here.
|
8180.0
|
2015-11-18 00:00:00 UTC
|
The Zacks Analyst Blog Highlights: Deutsche Lufthansa, American Airlines Group, United Continental Holdings and Delta Air Lines
|
AAL
|
https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-deutsche-lufthansa-american-airlines-group-united
|
nan
|
nan
|
For Immediate Release
Chicago, IL - November 18, 2015 - 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 Deutsche Lufthansa AG ( DLAKY ), American Airlines Group Inc. ( AAL ), United Continental Holdings Inc. ( UAL ) and Delta Air Lines Inc. ( DAL ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Tuesday's Analyst Blog:
U.S. Airlines Dip as Terror Strikes Paris
The Paris attack has shamed humanity again, with its effects rippling far and wide. The shameful act of brutality has cast a shadow on the various industries worldwide, and the tourism and other related sectors were no exception.
Often referred to as the "city of lights," Paris has been plunged into darkness following the terror act. The city attracts millions of travelers every year and as per MasterCard Global Destinations Cities Index projection, it secured the third position with 16.06 million travelers paying it a visit in 2015.
However, the massacre will have a widespread effect, affecting travel plans to Paris as well as the neighboring cities in Europe during the upcoming holiday season, thereby hurting profits for most carriers.
Airline stocks are vulnerable to such assaults as government-issued emergency periods cause disruption in flight services as is evident from the cancellation of most Paris-bound flights post the Friday attack.
Shares of Air France-KLM SA was affected the most with a 5.7% decline followed by a 2.1% drop in Deutsche Lufthansa Aktiengesellschaft ( DLAKY ) shares.
Impact on U.S. Airlines
Following the terror strike, shares of three dominant U.S. carriers, namely, American Airlines Group Inc. ( AAL ), United Continental Holdings Inc. ( UAL ) and Delta Air Lines Inc. ( DAL ), all of which enjoy a strong presence in Europe, witnessed 1.4%, 1.2% and 2.2% decline in stock prices. Even the U.S. Global Jets exchange-traded fund (JETS) declined 2%.
Delta Air Lines was dealt a heavy blow recording the maximum decline among these carriers because of its collaboration with Air France-KLM and Alitalia over transatlantic flights.
Conclusion
The 9/11 terror attack had been another devastating event for the U.S. airline industry. As per IATA, overall U.S. airline revenues in 2002 fell 17.7% from the 2001 levels. Further, global airline revenues declined by 6.7% in the same period. Both American Airlines and United Airlines witnessed a respective decline in stock prices of 39% and 42% on Sep 17, 2001.
Though the 9/11 attack has been the most severe one, assaults like the Madrid train bombings in 2004 and London terror act in 2005 had short-lived effects on overall airline industry. Such incidents have disrupted travel plans in the past for a short period and will likely affect flight services in Paris and the neighboring regions this time as well.
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
LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report
AMER AIRLINES (AAL): 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.
|
Stocks recently featured in the blog include the Deutsche Lufthansa AG ( DLAKY ), American Airlines Group Inc. ( AAL ), United Continental Holdings Inc. ( UAL ) and Delta Air Lines Inc. ( DAL ). Impact on U.S. Airlines Following the terror strike, shares of three dominant U.S. carriers, namely, American Airlines Group Inc. ( AAL ), United Continental Holdings Inc. ( UAL ) and Delta Air Lines Inc. ( DAL ), all of which enjoy a strong presence in Europe, witnessed 1.4%, 1.2% and 2.2% decline in stock prices. Click to get this free report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AMER AIRLINES (AAL): 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 the Deutsche Lufthansa AG ( DLAKY ), American Airlines Group Inc. ( AAL ), United Continental Holdings Inc. ( UAL ) and Delta Air Lines Inc. ( DAL ). Impact on U.S. Airlines Following the terror strike, shares of three dominant U.S. carriers, namely, American Airlines Group Inc. ( AAL ), United Continental Holdings Inc. ( UAL ) and Delta Air Lines Inc. ( DAL ), all of which enjoy a strong presence in Europe, witnessed 1.4%, 1.2% and 2.2% decline in stock prices. Click to get this free report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AMER AIRLINES (AAL): 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.
|
Impact on U.S. Airlines Following the terror strike, shares of three dominant U.S. carriers, namely, American Airlines Group Inc. ( AAL ), United Continental Holdings Inc. ( UAL ) and Delta Air Lines Inc. ( DAL ), all of which enjoy a strong presence in Europe, witnessed 1.4%, 1.2% and 2.2% decline in stock prices. Click to get this free report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AMER AIRLINES (AAL): 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 the Deutsche Lufthansa AG ( DLAKY ), American Airlines Group Inc. ( AAL ), United Continental Holdings Inc. ( UAL ) and Delta Air Lines Inc. ( DAL ).
|
Stocks recently featured in the blog include the Deutsche Lufthansa AG ( DLAKY ), American Airlines Group Inc. ( AAL ), United Continental Holdings Inc. ( UAL ) and Delta Air Lines Inc. ( DAL ). Impact on U.S. Airlines Following the terror strike, shares of three dominant U.S. carriers, namely, American Airlines Group Inc. ( AAL ), United Continental Holdings Inc. ( UAL ) and Delta Air Lines Inc. ( DAL ), all of which enjoy a strong presence in Europe, witnessed 1.4%, 1.2% and 2.2% decline in stock prices. Click to get this free report LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report AMER AIRLINES (AAL): 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.
|
8181.0
|
2015-11-18 00:00:00 UTC
|
Airline Industry Stock Outlook - Nov. 2015
|
AAL
|
https://www.nasdaq.com/articles/airline-industry-stock-outlook-nov.-2015-2015-11-18
|
nan
|
nan
|
Weak Oil Drives Q3 Earnings Performances
The series of earnings beats by airline companies has reinforced the well-documented fact that soft oil prices are nothing short of a godsend for stocks in the aviation space. Delta Air Lines Inc. ( DAL ) kick-started the third quarter earnings season for airline stocks on Oct 14, with a positive earnings surprise of 1.75%, courtesy of weak oil prices.
Other major carriers like American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ) followed Delta in delivering third quarter earnings beats on the back of low fuel costs. Needless to say, the oil glut that has been on for well over a year now has resulted in massive savings for carriers.
For example, American Airlines Group, which does not hedge fuel costs, expects to generate savings of approximately $5 billion in 2015. The robust financial health of most U.S. carriers has prompted them to invest substantially toward improving the flying experience for travelers, in a bid to stay afloat in the competitive airline space.
Additionally, financial stability has allowed for the launch of share repurchase programs, increased dividend payments and significant reduction of debt levels at the companies. On its third quarter conference call, American Airlines announced that its board has authorized an additional $2 billion share buyback program that is expected to be completed by Dec 31, 2016.
However, as in the second quarter, revenue growth was sluggish in the third quarter as well, owing to the dollar's strength.
Oil Weakness Key to IATA's Bullish Forecast
That airline stocks are likely to continue their profitable run through the rest of 2015 had been hinted at by the International Air Transport Association's (IATA) rosy forecast earlier in the year. The trade association now expects profits from the aviation industry to touch $29.3 billion in 2015 as opposed to the earlier projection of $25 billion, thanks to weak oil prices.
The bulk of the global profits ($15.7 billion) is expected from the North American region. The other regions, namely Asia-Pacific, Europe, Latin America, Middle East and Africa, are expected to generate post-tax net profit of $5.1 billion, $5.8 billion, $0.6 billion, $1.8 billion and $0.1 billion, respectively. Global net profit margin is expected to expand to 4% in 2015. However, global revenues are anticipated to decline 0.7% to $727 billion, mainly due to the strength of the dollar.
The IATA suggests that demand for passenger travel will improve in 2015 from 2014 levels, thanks to an improving economy. Customers will benefit from cheaper air travel, thanks to low oil prices, as one-way fares are expected to be slashed by 9.3% this year. According to the forecast, load factor (% of seats filled by passengers) for 2015 is expected to touch a record-high of 80.2%.
The research firm has also predicted that airline companies will earn $8.27 per passenger in 2015, up 67.4% year over year. The firm holds that oil prices will continue to fall in 2015 with the average price in the year hovering around $78 per barrel, down 33%.
The busy Labor Day holiday period (Sep 2-8) enjoyed by U.S. carriers this year further highlights the current prosperity. Moreover, the monthly global traffic numbers released by the IATA for September highlight the increased travel demand. Global travel demand improved 7.3% during the month.
Load factor climbed to 80.7% as traffic growth outpaced capacity expansion which was up 6.6%. International travel demand (up 7%) was driven by strong performance of carriers mainly from North America, the Asia-Pacific, Latin America, Europe and the Middle East while strong numbers from India, Russia and China resulted in a healthy increase in domestic traffic (up 7.8%). In Aug 2015, global travel demand had improved by 7.1%.
Not All Roses, Some Brickbats as Well
Despite the massive fall in airlines' largest input cost, it has not been all smooth sailing for them this year. The industry has experienced quite a few challenges led by capacity and pricing worries. Investors feared that airline capacity growth at a rate higher than the U.S. GDP will lead to an oversupplied market.
The worries originated in May 2015, courtesy Southwest Airlines' announcement of its plans to raise its capacity in the band of 7% to 8% in 2015 as opposed to the earlier projection of a 7% increase. However, following widespread investor panic, the carrier reverted to a 7% capacity growth plan and reiterated the same in the recent third quarter 2015 conference call.
Moreover, the ongoing weakness in passenger revenue per available seat mile (PRASM: a measure of unit revenue), which has hurt stocks in the space, can also be attributed partly to weak oil prices, making it a double-edged sword for carriers. Currency headwinds, coupled with lower fuel surcharges on international flights due to weak oil prices, pressurized this key metric.
Furthermore, a series of ongoing probes have hurt airline stocks. For instance, the ongoing internal investigation as well as the federal probe pertaining to United Continental Holdings' alleged improper dealings with the Port Authority of New York and New Jersey resulted in a change at the helm of the carrier. As a result of the probe, Jeff Smisek resigned in Sep 2015 from his roles as chairman, president and CEO and as a director of United Continental.
On the other hand, the U.S. Department of Justice sued United Continental to block the carrier from acquiring 24 take-off and landing spots from Delta at the Newark Liberty International Airport in New Jersey. The Justice Department filed the lawsuit to prevent United Continental from expanding further at its New Jersey hub, in a bid to protect competition and prices at the airport.
The ongoing dispute between leading U.S. carriers and their Gulf counterparts also raises concerns. In fact, Delta, which will apparently exit the Airlines for America Trade Association next year, will stop flying to Dubai from Atlanta effective early next year, due to excessive competition from Middle East carriers.
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 #48 for the "Trans-Airline" segment 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 third-quarter 2015 earnings results, the aggregate earnings beat ratio is an impressive 85.7%. On the other hand, the revenue beat ratio is just 28.6%. Average earnings growth is 22.5% while year-over-year top-line growth has treaded into the negative territory and stands at a negative 1.3%.
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 >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
UNITED CONT HLD (UAL): Free Stock Analysis Report
SOUTHWEST AIR (LUV): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
DELTA AIR LINES (DAL): 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 major carriers like American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ) followed Delta in delivering third quarter earnings beats on the back of low fuel costs. Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. For instance, the ongoing internal investigation as well as the federal probe pertaining to United Continental Holdings' alleged improper dealings with the Port Authority of New York and New Jersey resulted in a change at the helm of the carrier.
|
Other major carriers like American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ) followed Delta in delivering third quarter earnings beats on the back of low fuel costs. Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The other regions, namely Asia-Pacific, Europe, Latin America, Middle East and Africa, are expected to generate post-tax net profit of $5.1 billion, $5.8 billion, $0.6 billion, $1.8 billion and $0.1 billion, respectively.
|
Other major carriers like American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ) followed Delta in delivering third quarter earnings beats on the back of low fuel costs. Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Weak Oil Drives Q3 Earnings Performances The series of earnings beats by airline companies has reinforced the well-documented fact that soft oil prices are nothing short of a godsend for stocks in the aviation space.
|
Other major carriers like American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ) followed Delta in delivering third quarter earnings beats on the back of low fuel costs. Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): 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 ) kick-started the third quarter earnings season for airline stocks on Oct 14, with a positive earnings surprise of 1.75%, courtesy of weak oil prices.
|
8182.0
|
2015-11-18 00:00:00 UTC
|
Airline Industry Stock Outlook - Nov. 2015
|
AAL
|
https://www.nasdaq.com/articles/airline-industry-stock-outlook-nov.-2015-2015-11-18-0
|
nan
|
nan
|
Weak Oil Drives Q3 Earnings Performances
The series of earnings beats by airline companies has reinforced the well-documented fact that soft oil prices are nothing short of a godsend for stocks in the aviation space. Delta Air Lines Inc. ( DAL ) kick-started the third quarter earnings season for airline stocks on Oct 14, with a positive earnings surprise of 1.75%, courtesy of weak oil prices.
Other major carriers like American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ) followed Delta in delivering third quarter earnings beats on the back of low fuel costs. Needless to say, the oil glut that has been on for well over a year now has resulted in massive savings for carriers.
For example, American Airlines Group, which does not hedge fuel costs, expects to generate savings of approximately $5 billion in 2015. The robust financial health of most U.S. carriers has prompted them to invest substantially toward improving the flying experience for travelers, in a bid to stay afloat in the competitive airline space.
Additionally, financial stability has allowed for the launch of share repurchase programs, increased dividend payments and significant reduction of debt levels at the companies. On its third quarter conference call, American Airlines announced that its board has authorized an additional $2 billion share buyback program that is expected to be completed by Dec 31, 2016.
However, as in the second quarter, revenue growth was sluggish in the third quarter as well, owing to the dollar's strength.
Oil Weakness Key to IATA's Bullish Forecast
That airline stocks are likely to continue their profitable run through the rest of 2015 had been hinted at by the International Air Transport Association's (IATA) rosy forecast earlier in the year. The trade association now expects profits from the aviation industry to touch $29.3 billion in 2015 as opposed to the earlier projection of $25 billion, thanks to weak oil prices.
The bulk of the global profits ($15.7 billion) is expected from the North American region. The other regions, namely Asia-Pacific, Europe, Latin America, Middle East and Africa, are expected to generate post-tax net profit of $5.1 billion, $5.8 billion, $0.6 billion, $1.8 billion and $0.1 billion, respectively. Global net profit margin is expected to expand to 4% in 2015. However, global revenues are anticipated to decline 0.7% to $727 billion, mainly due to the strength of the dollar.
The IATA suggests that demand for passenger travel will improve in 2015 from 2014 levels, thanks to an improving economy. Customers will benefit from cheaper air travel, thanks to low oil prices, as one-way fares are expected to be slashed by 9.3% this year. According to the forecast, load factor (% of seats filled by passengers) for 2015 is expected to touch a record-high of 80.2%.
The research firm has also predicted that airline companies will earn $8.27 per passenger in 2015, up 67.4% year over year. The firm holds that oil prices will continue to fall in 2015 with the average price in the year hovering around $78 per barrel, down 33%.
The busy Labor Day holiday period (Sep 2-8) enjoyed by U.S. carriers this year further highlights the current prosperity. Moreover, the monthly global traffic numbers released by the IATA for September highlight the increased travel demand. Global travel demand improved 7.3% during the month.
Load factor climbed to 80.7% as traffic growth outpaced capacity expansion which was up 6.6%. International travel demand (up 7%) was driven by strong performance of carriers mainly from North America, the Asia-Pacific, Latin America, Europe and the Middle East while strong numbers from India, Russia and China resulted in a healthy increase in domestic traffic (up 7.8%). In Aug 2015, global travel demand had improved by 7.1%.
Not All Roses, Some Brickbats as Well
Despite the massive fall in airlines' largest input cost, it has not been all smooth sailing for them this year. The industry has experienced quite a few challenges led by capacity and pricing worries. Investors feared that airline capacity growth at a rate higher than the U.S. GDP will lead to an oversupplied market.
The worries originated in May 2015, courtesy Southwest Airlines' announcement of its plans to raise its capacity in the band of 7% to 8% in 2015 as opposed to the earlier projection of a 7% increase. However, following widespread investor panic, the carrier reverted to a 7% capacity growth plan and reiterated the same in the recent third quarter 2015 conference call.
Moreover, the ongoing weakness in passenger revenue per available seat mile (PRASM: a measure of unit revenue), which has hurt stocks in the space, can also be attributed partly to weak oil prices, making it a double-edged sword for carriers. Currency headwinds, coupled with lower fuel surcharges on international flights due to weak oil prices, pressurized this key metric.
Furthermore, a series of ongoing probes have hurt airline stocks. For instance, the ongoing internal investigation as well as the federal probe pertaining to United Continental Holdings' alleged improper dealings with the Port Authority of New York and New Jersey resulted in a change at the helm of the carrier. As a result of the probe, Jeff Smisek resigned in Sep 2015 from his roles as chairman, president and CEO and as a director of United Continental.
On the other hand, the U.S. Department of Justice sued United Continental to block the carrier from acquiring 24 take-off and landing spots from Delta at the Newark Liberty International Airport in New Jersey. The Justice Department filed the lawsuit to prevent United Continental from expanding further at its New Jersey hub, in a bid to protect competition and prices at the airport.
The ongoing dispute between leading U.S. carriers and their Gulf counterparts also raises concerns. In fact, Delta, which will apparently exit the Airlines for America Trade Association next year, will stop flying to Dubai from Atlanta effective early next year, due to excessive competition from Middle East carriers.
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 #48 for the "Trans-Airline" segment 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 third-quarter 2015 earnings results, the aggregate earnings beat ratio is an impressive 85.7%. On the other hand, the revenue beat ratio is just 28.6%. Average earnings growth is 22.5% while year-over-year top-line growth has treaded into the negative territory and stands at a negative 1.3%.
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 >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
UNITED CONT HLD (UAL): Free Stock Analysis Report
SOUTHWEST AIR (LUV): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
DELTA AIR LINES (DAL): 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 major carriers like American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ) followed Delta in delivering third quarter earnings beats on the back of low fuel costs. Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. For instance, the ongoing internal investigation as well as the federal probe pertaining to United Continental Holdings' alleged improper dealings with the Port Authority of New York and New Jersey resulted in a change at the helm of the carrier.
|
Other major carriers like American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ) followed Delta in delivering third quarter earnings beats on the back of low fuel costs. Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The other regions, namely Asia-Pacific, Europe, Latin America, Middle East and Africa, are expected to generate post-tax net profit of $5.1 billion, $5.8 billion, $0.6 billion, $1.8 billion and $0.1 billion, respectively.
|
Other major carriers like American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ) followed Delta in delivering third quarter earnings beats on the back of low fuel costs. Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Weak Oil Drives Q3 Earnings Performances The series of earnings beats by airline companies has reinforced the well-documented fact that soft oil prices are nothing short of a godsend for stocks in the aviation space.
|
Other major carriers like American Airlines Group ( AAL ), United Continental Holdings ( UAL ), JetBlue Airways ( JBLU ) and Southwest Airlines ( LUV ) followed Delta in delivering third quarter earnings beats on the back of low fuel costs. Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): 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 ) kick-started the third quarter earnings season for airline stocks on Oct 14, with a positive earnings surprise of 1.75%, courtesy of weak oil prices.
|
8183.0
|
2015-11-17 00:00:00 UTC
|
US Airlines Dip as Terror Strikes City of Light
|
AAL
|
https://www.nasdaq.com/articles/us-airlines-dip-as-terror-strikes-city-of-light-2015-11-17
|
nan
|
nan
|
The Paris attack has shamed humanity again, with its effects rippling far and wide. The shameful act of brutality has cast a shadow on the various industries worldwide, and the tourism and other related sectors were no exception.
Often referred to as the "city of lights," Paris has been plunged into darkness following the terror act. The city attracts millions of travelers every year and as per MasterCard Global Destinations Cities Index projection, it secured the third position with 16.06 million travelers paying it a visit in 2015.
However, the massacre will have a widespread effect, affecting travel plans to Paris as well as the neighboring cities in Europe during the upcoming holiday season, thereby hurting profits for most carriers.
Airline stocks are vulnerable to such assaults as government-issued emergency periods cause disruption in flight services as is evident from the cancellation of most Paris-bound flights post the Friday attack.
Shares of Air France-KLM SA was affected the most with a 5.7% decline followed by a 2.1% drop in Deutsche Lufthansa Aktiengesellschaft DLAKY shares.
Impact on U.S. Airlines
Following the terror strike, shares of three dominant U.S. carriers, namely, American Airlines Group Inc. AAL , United Continental Holdings Inc. UAL and Delta Air Lines Inc. DAL , all of which enjoy a strong presence in Europe, witnessed 1.4%, 1.2% and 2.2% decline in stock prices. Even the U.S. Global Jets exchange-traded fund (JETS) declined 2%.
Delta Air Lines was dealt a heavy blow recording the maximum decline among these carriers because of its collaboration with Air France-KLM and Alitalia over transatlantic flights.
Conclusion
The 9/11 terror attack had been another devastating event for the U.S. airline industry. As per IATA, overall U.S. airline revenues in 2002 fell 17.7% from the 2001 levels. Further, global airline revenues declined by 6.7% in the same period. Both American Airlines and United Airlines witnessed a respective decline in stock prices of 39% and 42% on Sep 17, 2001.
Though the 9/11 attack has been the most severe one, assaults like the Madrid train bombings in 2004 and London terror act in 2005 had short-lived effects on overall airline industry. Such incidents have disrupted travel plans in the past for a short period and will likely affect flight services in Paris and the neighboring regions this time as well.
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
UNITED CONT HLD (UAL): 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.
|
Impact on U.S. Airlines Following the terror strike, shares of three dominant U.S. carriers, namely, American Airlines Group Inc. AAL , United Continental Holdings Inc. UAL and Delta Air Lines Inc. DAL , all of which enjoy a strong presence in Europe, witnessed 1.4%, 1.2% and 2.2% decline in stock prices. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): 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, the massacre will have a widespread effect, affecting travel plans to Paris as well as the neighboring cities in Europe during the upcoming holiday season, thereby hurting profits for most carriers.
|
Impact on U.S. Airlines Following the terror strike, shares of three dominant U.S. carriers, namely, American Airlines Group Inc. AAL , United Continental Holdings Inc. UAL and Delta Air Lines Inc. DAL , all of which enjoy a strong presence in Europe, witnessed 1.4%, 1.2% and 2.2% decline in stock prices. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): 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.
|
Impact on U.S. Airlines Following the terror strike, shares of three dominant U.S. carriers, namely, American Airlines Group Inc. AAL , United Continental Holdings Inc. UAL and Delta Air Lines Inc. DAL , all of which enjoy a strong presence in Europe, witnessed 1.4%, 1.2% and 2.2% decline in stock prices. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): 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. Both American Airlines and United Airlines witnessed a respective decline in stock prices of 39% and 42% on Sep 17, 2001.
|
Impact on U.S. Airlines Following the terror strike, shares of three dominant U.S. carriers, namely, American Airlines Group Inc. AAL , United Continental Holdings Inc. UAL and Delta Air Lines Inc. DAL , all of which enjoy a strong presence in Europe, witnessed 1.4%, 1.2% and 2.2% decline in stock prices. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): 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, the massacre will have a widespread effect, affecting travel plans to Paris as well as the neighboring cities in Europe during the upcoming holiday season, thereby hurting profits for most carriers.
|
8184.0
|
2015-11-16 00:00:00 UTC
|
7 Stocks to Profit From Cuba's Coming Boom
|
AAL
|
https://www.nasdaq.com/articles/7-stocks-profit-cubas-coming-boom-2015-11-16
|
nan
|
nan
|
American companies have long dreamed of setting up shop in Cuba--rebuilding its roads, tapping its vast mineral deposits and turning the Communist country into the Disneyland of the Caribbean. A couple of guys named Castro (not to mention a series of U.S. administrations) haven't exactly shared that vision. But after more than 50 years of hostility, relations between the U.S. and Havana are thawing, and Cuba is now eager for foreign business. That promises to clear the way for global companies to eventually cash in.
See Also: Best Emerging Markets to Invest In Now: India, Taiwan, Philippines
Though you won't see a Hilton in Havana tomorrow, the easing of U.S. sanctions is ushering in a pro-business era for the country. Under new government rules, U.S. banks can handle transactions from Cuban banks, and U.S. companies can export a wider array of goods, including telecommunications equipment and supplies for "private entrepreneurs." Companies can now open offices, warehouses and stores in Cuba. The U.S. has also relaxed travel restrictions for its citizens, who no longer have to carry wads of cash or traveler's checks; they can use credit and debit cards in the country.
Despite these changes, a complicated web of U.S. laws, including the Kennedy-era trade embargo, prevents American firms and most foreign companies from doing much business in Cuba. U.S. companies aren't allowed to extend credit to Cuban customers, a major impediment for a cash-strapped economy. The U.S. also blocks Cuba from tapping financing through such institutions as the World Bank.
Havana makes life difficult for business as well. The government keeps a tight leash on labor, requiring foreign companies to use government "employment agencies" to hire workers and set wages. Protections for legal and property rights remain questionable in a country that confiscated vast amounts of privately owned property after the Communists took control in 1959. The upshot is that only a handful of publicly traded global companies do significant business in Cuba, among them Spain's Melia Hotels (symbol SMIZF , $14) and Canadian miner Sherritt International ( SHERF , $0.60). (Prices are as of September 30; only stocks in boldface are recommended.)
Indeed, without some major political and economic reforms, the country isn't likely to experience a sea change in foreign investment, says Tomas Bilbao, head of the Cuba Study Group, a nonprofit organization that promotes Cuban development. "The Cuban government needs to create a more attractive investment environment," he says, "and the U.S. needs to get out of the way."
Nonetheless, Cuba is taking steps to lure foreign business and liberalize its economy. A law passed in 2014 included measures to encourage more foreign investment in the country, and the government created a special economic development zone around Mariel Bay, aiming to turn it into a regional shipping hub with looser labor rules for foreign companies. Also on the agenda: unifying the country's dual-class currency system and reforming state-run enterprises, which account for about 25% of the economy. "Business conditions will improve because Cuba needs to attract more foreign investment," says Paolo Spadoni, a Cuba expert at Augusta University, in Augusta, Ga. "Companies have a sense of urgency to be there because they think the embargo will end soon."
As the largest economy in the Caribbean, Cuba offers tantalizing possibilities if those reforms do come. Its workforce is both highly educated and underemployed. Cuba has vast mineral deposits, a developed biotech industry, ports close to the U.S., and gorgeous beaches for resort development.
Investing in Cuba-related stocks now means taking a flier on companies that don't do a meaningful amount of business, if any, on the island. Indeed, it could take years for an investment in Cuba to pay off. Some stocks look attractive in their own right, though, and could get a lift from Cuba-related business if the country does open up.
Carnival ( CCL , $50), for example, may be the first major cruise-ship company to drop anchor in Havana. It plans to start "cultural exchange" cruises to Cuba under its Fathom brand in the spring of 2016, pending approval by Cuban authorities. Carnival CEO Arnold Donald says Cuba presents a "huge opportunity" for the industry and could "refresh" the company's lineup of Caribbean cruises.
With more than $15 billion in annual revenues, Carnival will have to sell a lot of Cuban cruises to move the sales needle. But analysts expect Carnival's earnings per share to climb by 28% in its fiscal year that ends in November 2016--healthy growth with or without Cuba. The shares yield 2.4%, compared with 2.2% for Standard & Poor's 500-stock index.
Airlines such as American Airlines Group ( AAL , $39) and Panama-based Copa Holdings ( CPA , $42) could pick up Cuban business, too. With a major hub in Miami, American offers more charter flights to Cuba than any major U.S. carrier. It's starting charter service from Los Angeles and says it's ready to begin regular commercial flights once they're allowed. Even then, Cuban business would likely represent a tiny fraction of American's $42.6 billion in annual revenues. Meanwhile, American's stock looks exceptionally cheap, selling for just 5 times estimated earnings.
Copa is already the largest foreign airline in Cuba, with six flights to and from the island daily. Cuba trips accounted for just 1.3% of its 2014 revenue of $2.7 billion, and sales have been hammered by a slowdown in Latin American travel. Still, Copa looks "poised to profit from any pickup in flights" to Cuba, according to a report by the Herzfeld Caribbean Basin Fund ( CUBA ), a closed-end fund that was set up in 1993 to try to profit from Cuba-related businesses. At last word, Copa was its top holding.
A building boom in Cuba could benefit Vulcan Materials ( VMC , $89), the largest U.S. producer of construction materials such as crushed stone, gravel, asphalt and concrete. Along with more than 440 production sites in the U.S, the company runs a large quarry and marine terminal on Mexico's Yucatán Peninsula--a prime location for exports to Cuba. Vulcan's profits have rallied with the recovery in U.S. housing. The stock is pricey, at 32 times estimated year-ahead earnings. But Vulcan may deserve the rich valuation, as analysts expect the company's profits to soar 66% in 2016, to $3.47 per share.
Several Mexican companies may also be Cuba winners. Latin American telecom giant America Movil ( AMX , $17), cement maker Cemex ( CX , $7) and soft drink bottler Coca-Cola Femsa ( KOF , $69) look well positioned to gain sales in Cuba, according to the Herzfeld fund. Mexican stocks, along with other emerging markets, have performed poorly over the past year, and these three, which trade in the U.S. as American depositary receipts, are no exception. But the companies are all leaders in their respective industries and should recover over time. A few years from now, Americans might even get to toast their gains over Cuba Libre cocktails in a Havana beach cabana.
See Also: The World's Greatest Stocks
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.
|
Airlines such as American Airlines Group ( AAL , $39) and Panama-based Copa Holdings ( CPA , $42) could pick up Cuban business, too. The upshot is that only a handful of publicly traded global companies do significant business in Cuba, among them Spain's Melia Hotels (symbol SMIZF , $14) and Canadian miner Sherritt International ( SHERF , $0.60). Indeed, without some major political and economic reforms, the country isn't likely to experience a sea change in foreign investment, says Tomas Bilbao, head of the Cuba Study Group, a nonprofit organization that promotes Cuban development.
|
Airlines such as American Airlines Group ( AAL , $39) and Panama-based Copa Holdings ( CPA , $42) could pick up Cuban business, too. American companies have long dreamed of setting up shop in Cuba--rebuilding its roads, tapping its vast mineral deposits and turning the Communist country into the Disneyland of the Caribbean. With a major hub in Miami, American offers more charter flights to Cuba than any major U.S. carrier.
|
Airlines such as American Airlines Group ( AAL , $39) and Panama-based Copa Holdings ( CPA , $42) could pick up Cuban business, too. Despite these changes, a complicated web of U.S. laws, including the Kennedy-era trade embargo, prevents American firms and most foreign companies from doing much business in Cuba. "Business conditions will improve because Cuba needs to attract more foreign investment," says Paolo Spadoni, a Cuba expert at Augusta University, in Augusta, Ga. "Companies have a sense of urgency to be there because they think the embargo will end soon."
|
Airlines such as American Airlines Group ( AAL , $39) and Panama-based Copa Holdings ( CPA , $42) could pick up Cuban business, too. With more than $15 billion in annual revenues, Carnival will have to sell a lot of Cuban cruises to move the sales needle. With a major hub in Miami, American offers more charter flights to Cuba than any major U.S. carrier.
|
8185.0
|
2015-11-16 00:00:00 UTC
|
Will the Paris Terrorist Attacks Hurt Major Airlines?
|
AAL
|
https://www.nasdaq.com/articles/will-paris-terrorist-attacks-hurt-major-airlines-2015-11-16
|
nan
|
nan
|
The terrorist attacks that struck Paris last Friday have put airline investors on the defensive. Shares of American Airlines , Delta Air Lines , and United Continental had already started to give up their October gains last week, and they all fell again by 2%-3% on Monday morning.
Weekly Airline Stock Performance, data by YCharts
Does this pullback in major airline stocks represent a warning sign of more trouble to come? Or is it a good opportunity to invest in these companies? Let's take a look.
The terrorism threat will hit demand
Among U.S. commercial airlines, American, Delta, and United are the only three that fly to Europe.
The direct impact to them from the terrorist attacks last week was relatively minimal. While France closed its borders immediately following the attacks, the airports remained open. So while there were some delays and one cancellation (an American Airlines roundtrip from Dallas-Fort Worth), most flights operated normally.
However, just because flights are operating doesn't mean that customers will want to fly. Several people that spoke to the Associated Press had canceled trips to France or were considering doing so due to fear about potential follow-on attacks.
Some people are canceling planned trips to Paris. Photo: American Airlines
Aside from security concerns, tourists have also faced uncertainty about what they would be able to do in Paris. Numerous major landmarks like the Louvre and the Eiffel Tower were closed over the weekend, although they reopened on Monday afternoon. Travelers have also been warned that movement through the city may be restricted.
Notable geopolitical events also have a way of disrupting demand more broadly in the short term. For example, United Continental reported that China's relatively insignificant devaluation of the yuan in August caused a temporary drop-off in bookings for travel between China and the U.S. A major terrorist attack could have a much bigger effect.
How big is the impact?
That said, American, Delta, and United don't have so much capacity deployed in France that a downturn there would have a dramatic impact on their results.
Delta Air Lines has the most to lose, as it has a joint venture with Air France-KLM and Alitalia for transatlantic flights. As part of that JV, Delta operates more flights to Paris than either American Airlines or United Continental, allowing customers to connect via Air France to other destinations. The JV also includes a revenue-sharing and cost-sharing scheme for transatlantic flights, so Delta has a stake in Air France's profitability on transatlantic routes.
Even for Delta, the entire transatlantic market represents less than 20% of total revenue. Much of that traffic flows through other major European hubs -- mainly London and Amsterdam -- or directly from the U.S. to other cities in Europe, Africa, India, and the Middle East. This should blunt the impact of any drop in demand for travel to (or through) Paris.
Delta has the most exposure to France of any U.S. airline. Photo: The Motley Fool
Additionally, while American, Delta, and United all waived change fees for customers traveling to or through Paris, none of these waivers extends beyond Nov. 22. Furthermore, airlines are offering only to change customers' travel dates. They aren't providing refunds for non-refundable tickets. The tickets they have already sold for the next few months represent a cushion against any short-term drop in travel demand.
This too shall pass
Unlike the 9/11 attacks, the attacks in Paris last week did not specifically target air travel. As a result, while there was a broad-based downturn in air travel following 9/11, there is no reason to expect that to occur here.
Airlines -- and airline investors -- should be prepared for a few weeks or even a few months with significantly fewer people buying tickets to Paris. There could even be a modest impact on other air travel due to the inevitable uncertainty about whether other major cities will be next.
However, American Airlines, Delta Air Lines, and United Continental face this situation from a position of strength -- they all have double-digit profit margins. This makes a travel downturn that is mainly limited to a small proportion of their global route networks quite manageable.
Furthermore, oil prices are sliding again, providing another tailwind for airline profitability. Finally, all three airline stocks already trade for less than 10 times projected 2016 earnings, so there's plenty of margin for error in case it takes longer than expected for demand to recover in the coming weeks and months. This should help the airlines bounce back relatively quickly from this unfortunate incident.
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 Will the Paris Terrorist Attacks Hurt Major Airlines? originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of United Continental Holdings, and is long November 2015 $40 calls on American Airlines Group and long January 2017 $40 calls on Delta Air Lines, 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 - 2015 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 American Airlines , Delta Air Lines , and United Continental had already started to give up their October gains last week, and they all fell again by 2%-3% on Monday morning. As part of that JV, Delta operates more flights to Paris than either American Airlines or United Continental, allowing customers to connect via Air France to other destinations. Finally, all three airline stocks already trade for less than 10 times projected 2016 earnings, so there's plenty of margin for error in case it takes longer than expected for demand to recover in the coming weeks and months.
|
As part of that JV, Delta operates more flights to Paris than either American Airlines or United Continental, allowing customers to connect via Air France to other destinations. However, American Airlines, Delta Air Lines, and United Continental face this situation from a position of strength -- they all have double-digit profit margins. Adam Levine-Weinberg owns shares of United Continental Holdings, and is long November 2015 $40 calls on American Airlines Group and long January 2017 $40 calls on Delta Air Lines, The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
As part of that JV, Delta operates more flights to Paris than either American Airlines or United Continental, allowing customers to connect via Air France to other destinations. Photo: The Motley Fool Additionally, while American, Delta, and United all waived change fees for customers traveling to or through Paris, none of these waivers extends beyond Nov. 22. Adam Levine-Weinberg owns shares of United Continental Holdings, and is long November 2015 $40 calls on American Airlines Group and long January 2017 $40 calls on Delta Air Lines, The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
The direct impact to them from the terrorist attacks last week was relatively minimal. As part of that JV, Delta operates more flights to Paris than either American Airlines or United Continental, allowing customers to connect via Air France to other destinations. There could even be a modest impact on other air travel due to the inevitable uncertainty about whether other major cities will be next.
|
8186.0
|
2015-11-15 00:00:00 UTC
|
Shares of the Top 4 U.S. Airlines Soared in October: Here's Why
|
AAL
|
https://www.nasdaq.com/articles/shares-top-4-us-airlines-soared-october-heres-why-2015-11-15
|
nan
|
nan
|
Shares of American Airlines , Delta Air Lines , Southwest Airlines , and United Continental all took off last month. The biggest gain went to Southwest, which rose more than 21%, while Delta brought up the rear with an increase of "only" 13% during October.
Airline October Stock Performances, data by YCharts .
The airlines clearly fed off of each other's performances last month. However, each one had good news of its own to report. Let's take a look at what each airline did to please investors.
American Airlines completes a major task -- and buys back tons of stock
American Airlines stock spent most of the summer in the doldrums around $40. Last month, the company revealed that it had taken this opportunity to repurchase a stunning $1.56 billion of stock in Q3 -- about 6% of its shares. American Airlines plans to keep the buybacks coming; the board authorized another $2 billion program to be completed by the end of 2016.
This huge share repurchase showed that American's management has a ton of confidence in the company's long-term prospects. But ultimately, confidence only goes so far -- you also have to deliver results.
American Airlines did just that, pulling off a virtually seamless reservations system integration in mid-October. While major integration tasks like this are prone to huge technology failures, everything went as planned for the American Airlines-US Airways integration. In the minds of investors, these positive developments outweighed CEO Doug Parker's prediction that airline profit margins could narrow next year.
Delta Air Lines projects more strong earnings growth
During October, Delta reported that earnings growth accelerated in the third quarter, as its adjusted operating margin rose to 21% from 15.8% a year earlier. This was largely due to Delta finally capturing the full benefit of lower oil prices . (In the first half of 2015, it absorbed big hedging losses.) Delta projected that fuel would remain a tailwind for the next few quarters.
Low fuel prices drove strong earnings growth at Delta in Q3.Shares of the Top 4 U.S. Airlines Soared in October: Here's Why
Investors were also pleased by Delta Air Lines' commitment to capacity discipline . The company has cut service in a number of weaker international markets this fall, holding total capacity flat year over year in Q4. It then plans modest 0%-2% capacity growth for 2016.
This is already starting to have a positive impact on Delta's results. Delta's unit revenue is still declining, but at a slower rate than in Q2 and Q3, and it could start to grow again within the next few quarters. This solid outlook led analysts to revise their 2016 earnings estimates higher by about 3% on average during October.
Southwest Airlines returns to unit revenue growth
Southwest Airlines put together the biggest gain among the top four airlines last month, and for good reason. Southwest confirmed that its unit revenue decline moderated to just 0.4% in Q3, allowing it to post 71% year-over-year growth in adjusted EPS.
Southwest Airlines is returning to unit revenue growth this quarter.
Even more importantly, Southwest Airlines projected that unit revenue will rise 1% in Q4, making it the first of the "Big Four" airlines to return to unit revenue growth. Unit revenue gains could accelerate next year as the carrier's new routes in Dallas start to mature. That should allow Southwest to continue its stellar margin performance in 2016.
United Continental posts rapid margin expansion
Finally, United Continental also had lots of good news for investors last month. Unit revenue came in at the favorable end of the company's original guidance, while unit costs were lower than expected due to falling oil prices and the impact of the strong dollar on costs outside the U.S.
As a result, the company's adjusted pre-tax margin reached 16.6%, well above the 13.5%-15.5% guidance range provided in July. Like Delta, United Continental expects an ongoing tailwind from lower hedging losses in the next few quarters.
United's strong results could have justified an even bigger share price gain in October. However, recently installed CEO Oscar Munoz suffered a heart attack last month, adding a lot of uncertainty for investors. Fortunately, he is now on the road to recovery, and plans to return in a few months. In the meantime, the rest of the management team seems to be maintaining its focus.
Clearly, October was a great month to own airline stocks. With fuel prices likely to remain low for the foreseeable future, and airline management teams working hard to get unit revenue back on a growth trajectory, shares of all four airlines could still have room to run.
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 Shares of the Top 4 U.S. Airlines Soared in October: Here's Why originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of United Continental Holdings, and is long November 2015 $40 calls on American Airlines Group and long January 2017 $40 calls on Delta Air Lines, 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 - 2015 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 the minds of investors, these positive developments outweighed CEO Doug Parker's prediction that airline profit margins could narrow next year. Unit revenue came in at the favorable end of the company's original guidance, while unit costs were lower than expected due to falling oil prices and the impact of the strong dollar on costs outside the U.S. As a result, the company's adjusted pre-tax margin reached 16.6%, well above the 13.5%-15.5% guidance range provided in July. However, recently installed CEO Oscar Munoz suffered a heart attack last month, adding a lot of uncertainty for investors.
|
Shares of American Airlines , Delta Air Lines , Southwest Airlines , and United Continental all took off last month. Delta Air Lines projects more strong earnings growth During October, Delta reported that earnings growth accelerated in the third quarter, as its adjusted operating margin rose to 21% from 15.8% a year earlier. Adam Levine-Weinberg owns shares of United Continental Holdings, and is long November 2015 $40 calls on American Airlines Group and long January 2017 $40 calls on Delta Air Lines, The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
Southwest Airlines returns to unit revenue growth Southwest Airlines put together the biggest gain among the top four airlines last month, and for good reason. Even more importantly, Southwest Airlines projected that unit revenue will rise 1% in Q4, making it the first of the "Big Four" airlines to return to unit revenue growth. Adam Levine-Weinberg owns shares of United Continental Holdings, and is long November 2015 $40 calls on American Airlines Group and long January 2017 $40 calls on Delta Air Lines, The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
Shares of American Airlines , Delta Air Lines , Southwest Airlines , and United Continental all took off last month. Delta Air Lines projects more strong earnings growth During October, Delta reported that earnings growth accelerated in the third quarter, as its adjusted operating margin rose to 21% from 15.8% a year earlier. Southwest Airlines returns to unit revenue growth Southwest Airlines put together the biggest gain among the top four airlines last month, and for good reason.
|
8187.0
|
2015-11-13 00:00:00 UTC
|
Embraer Could Be on the Verge of a Major Coup in the U.S.
|
AAL
|
https://www.nasdaq.com/articles/embraer-could-be-verge-major-coup-us-2015-11-13
|
nan
|
nan
|
Brazilian aircraft manufacturer Embraer has had great success in the U.S. market lately. As the regional airline industry has migrated toward 76-seat jets, it has captured a slew of orders for its E175 jet from legacy carriers like American Airlines and United Continental and their regional airline partners. For the past few years, more than half of Embraer's commercial aircraft deliveries have gone to the U.S.
Embraer now has its eyes on an even bigger prize in its top market. The company believes it could soon land orders for its larger -- and more profitable -- E190 and E195 jets in the U.S.
Filling the void
For the past 10-20 years, U.S. network carriers like United and American have mainly operated planes with 120-130 or more seats, while contracting out with regional airlines to fly numerous planes with 76 or fewer seats. This has left a big void in the 100-seat range.
This is a legacy of the wide gap in pilot pay between mainline carriers and regional airlines. It was more economical to contract out to a regional airline for a 70- to 76-seat jet (or even a 50-seat jet) than to pay mainline wages for a somewhat larger plane. However, the growing regional airline pilot shortage is raising the cost of regional airline capacity and limiting its availability.
76-seat regional jets have become very prominent in U.S. airline fleets. Image source: Republic Airways.
In this context, 100-seat planes are starting to look more attractive. Additionally, most legacy carrier pilot contracts cap the number of 76-seat jets that can be flown by regional airlines, but allow this cap to rise if the airline also adds 100-seat jets.
Delta Air Lines was farsighted about these trends, and made plans in 2012 to add 88 used 110-seat Boeing 717s to its mainline fleet. By contrast, while American Airlines has 20 99-seat Embraer E190s, that represents just 2% of its mainline fleet. United doesn't have any planes in the 100-seat segment today.
There's definitely interest
United Continental has already publicly stated that it is interested in adding smaller jets like the E190 and E195 to its fleet. Under United's pilot contract, for every five jets in that size class that it flies with mainline pilots, it can add four 76-seat jets to its regional fleet -- up to a maximum of 70 additional regional jets.
American Airlines hasn't said whether it is considering expanding its 100-seat jet fleet. At the moment, it has hundreds of larger aircraft on order and is working through a major merger integration process. But if United makes a big move toward using small mainline planes, it would increase the likelihood of American Airlines eventually growing its 100-seat jet fleet.
Embraer is the likely winner
The head of Embraer's commercial airplanes unit stated last week that he thinks his company could get an initial deal within the next six months -- presumably from United.
His confidence probably stems from the fact that Embraer doesn't face much competition in this segment. Bombardier's CS100 is the main alternative, but it is significantly more expensive than any of Embraer's products. Airlines may also be worried about Bombardier's long-term health, as massive cost overruns for CSeries development have severely damaged its financial position.
United Airlines has expressed interest in Embraer's next-generation planes. Photo: Embraer
The big choice for United is between buying the current-generation E190 or E195 from Embraer, buying used E190s (which are quite cheap right now), or waiting a few years for the next-generation E190-E2 and E195-E2. Those planes will enter service in 2018 and 2019, respectively.
Former United Continental CFO John Rainey said back in June that the company was evaluating the E2-series jets. However, United probably doesn't want to wait until 2018 or later to start adding planes in the 100-seat range.
Thus, Embraer's best strategy might be to offer 20-30 current-generation E-Jets at a big discount for delivery between late 2016 and 2018, followed by early deliveries of E2-series jets beginning in 2018.
It's quite possible that United Continental will instead buy some used E190s -- it has shown growing interest in mid-aged used planes in the past year or two. However, even if it buys used planes to meet its near-term needs, United may also order some E2 jets for delivery a few years from now. And in 10-15 years, it would probably replace the used E190s with new E2-series jets.
A big deal could move the needle
Embraer is a relatively small aircraft manufacturer. This year, it expects to build about 100 commercial jets. Thus, a single big order can have a significant impact on Embraer's finances.
If United opts to buy 88 new Embraer planes -- which would unlock the ability to add 70 large regional jets under its pilot contract -- it would boost Embraer's backlog by nearly a year. If American Airlines eventually followed suit, that would magnify the impact.
Furthermore, the E190 and E195 planes are more profitable for Embraer than the smaller E175. The E2-series E-Jets will be even more profitable -- since they incorporate newer technology, they can command higher prices. That makes these potential orders even more valuable than the big E175 orders Embraer has bagged in recent years.
Obviously, there's no guarantee that a deal will materialize (or that it will come in the expected six-month timeframe). However, this is a huge opportunity for Embraer to gain a bigger foothold in a lucrative piece of the U.S. aircraft market where it has previously been marginalized.
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 Embraer Could Be on the Verge of a Major Coup in the U.S. originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of Embraer-Empresa Brasileira,The Boeing Company, and United Continental Holdings,, and is long January 2016 $30 calls on Embraer-Empresa Brasileira, long November 2015 $40 calls on American Airlines Group, and long January 2017 $40 calls on Delta Air Lines, The Motley Fool is long January 2017 $35 calls on American Airlines Group. The Motley Fool recommends Embraer-Empresa Brasileira. 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 - 2015 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.
|
But if United makes a big move toward using small mainline planes, it would increase the likelihood of American Airlines eventually growing its 100-seat jet fleet. Airlines may also be worried about Bombardier's long-term health, as massive cost overruns for CSeries development have severely damaged its financial position. However, this is a huge opportunity for Embraer to gain a bigger foothold in a lucrative piece of the U.S. aircraft market where it has previously been marginalized.
|
As the regional airline industry has migrated toward 76-seat jets, it has captured a slew of orders for its E175 jet from legacy carriers like American Airlines and United Continental and their regional airline partners. Filling the void For the past 10-20 years, U.S. network carriers like United and American have mainly operated planes with 120-130 or more seats, while contracting out with regional airlines to fly numerous planes with 76 or fewer seats. Adam Levine-Weinberg owns shares of Embraer-Empresa Brasileira,The Boeing Company, and United Continental Holdings,, and is long January 2016 $30 calls on Embraer-Empresa Brasileira, long November 2015 $40 calls on American Airlines Group, and long January 2017 $40 calls on Delta Air Lines, The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
As the regional airline industry has migrated toward 76-seat jets, it has captured a slew of orders for its E175 jet from legacy carriers like American Airlines and United Continental and their regional airline partners. If United opts to buy 88 new Embraer planes -- which would unlock the ability to add 70 large regional jets under its pilot contract -- it would boost Embraer's backlog by nearly a year. Adam Levine-Weinberg owns shares of Embraer-Empresa Brasileira,The Boeing Company, and United Continental Holdings,, and is long January 2016 $30 calls on Embraer-Empresa Brasileira, long November 2015 $40 calls on American Airlines Group, and long January 2017 $40 calls on Delta Air Lines, The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
As the regional airline industry has migrated toward 76-seat jets, it has captured a slew of orders for its E175 jet from legacy carriers like American Airlines and United Continental and their regional airline partners. United Airlines has expressed interest in Embraer's next-generation planes. However, even if it buys used planes to meet its near-term needs, United may also order some E2 jets for delivery a few years from now.
|
8188.0
|
2015-11-12 00:00:00 UTC
|
American Airlines Adds Kiwi Destination; October Traffic Rises
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-adds-kiwi-destination-october-traffic-rises-2015-11-12
|
nan
|
nan
|
American Airlines Group Inc.AAL , formed following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways, has been engaged in constant efforts to expand its operations and attract more fliers.
To this end, the Fort Worth, TX-based carrier recently announced its intention to operate direct flights daily connecting Los Angeles and Auckland in New Zealand. The decision to fly to Auckland is a smart one, as it is a popular tourist destination. The carrier intends to start the service from June next year, after it gets all the necessary regulatory approvals. In fact, the last three years have seen American Airlines adding six new trans-Pacific routes, as it focuses intensively on strengthening its presence in the area. The latest move, apart from strengthening its ties with Australia's Qantas Airways, is a step in that direction.
Apart from announcing the new route, the carrier also unveiled impressive Oct 2015 traffic data earlier this week. Traffic - measured in revenue passenger miles (RPMs) - came in at 18.9 billion during the month, up 5.8% from 17.9 billion recorded a year ago. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) improved 2.1% to 22.2 billion. Since air traffic growth outpaced capacity expansion, the load factor (percentage of seats filled by passengers) increased to 85.2% from 82.2% in Oct 2014. The levels reached by all the three metrics were the highest recorded ever for October.
The record October traffic numbers at American Airlines represent another positive for the carrier that is already enjoying massive on the back of weak oil prices . American Airlines Group, which does not hedge fuel costs, expects to generate savings of approximately $5 billion in 2015 courtesy soft oil prices.
For the first ten months of 2015, American Airlines generated RPMs of 187.8 billion (up 2.3% from the corresponding period last year) and ASMs of 225.5 billion (up 1.4%). Load factor improved 70 basis points year over year to 83.3% as traffic growth outpaced the increase in capacity.
American Airlines still forecasts a 5% to 7% drop in passenger revenue per available seat mile (PRASM: a measure of unit revenue) for the fourth quarter of 2015. Currency headwinds, coupled with lower fuel surcharges on international flights due to weak oil prices, have pressurized this key metric. Moreover, pre-tax margin (exclusive of special items) is likely to remain in the band of 12% to 14%.
Zacks Rank
American Airlines carries a Zacks Rank #3 (Hold). Better-ranked stocks in the airline space include SkyWest Inc SKYW , Southwest Airlines Co. LUV and Hawaiian Holdings HA . 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
SOUTHWEST AIR (LUV): Free Stock Analysis Report
HAWAIIAN HLDGS (HA): Free Stock Analysis Report
SKYWEST INC (SKYW): 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 , formed following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways, has been engaged in constant efforts to expand its operations and attract more fliers. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. To this end, the Fort Worth, TX-based carrier recently announced its intention to operate direct flights daily connecting Los Angeles and Auckland in New Zealand.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report SKYWEST INC (SKYW): 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 , formed following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways, has been engaged in constant efforts to expand its operations and attract more fliers. Load factor improved 70 basis points year over year to 83.3% as traffic growth outpaced the increase in capacity.
|
American Airlines Group Inc.AAL , formed following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways, has been engaged in constant efforts to expand its operations and attract more fliers. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The record October traffic numbers at American Airlines represent another positive for the carrier that is already enjoying massive on the back of weak oil prices .
|
American Airlines Group Inc.AAL , formed following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways, has been engaged in constant efforts to expand its operations and attract more fliers. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Since air traffic growth outpaced capacity expansion, the load factor (percentage of seats filled by passengers) increased to 85.2% from 82.2% in Oct 2014.
|
8189.0
|
2015-11-08 00:00:00 UTC
|
American Airlines Group, Inc. Is Finally Flying Back to Tokyo's Haneda Airport
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-group-inc-finally-flying-back-tokyos-haneda-airport-2015-11-08
|
nan
|
nan
|
For more than a year, American Airlines and Delta Air Lines have been caught up in a dogfight concerning access to Tokyo's Haneda Airport.
Haneda is preferred by many business travelers because it is much closer to Tokyo than Narita Airport, which handles most international flights. However, U.S. airlines are currently limited by the Japanese government to just four daily roundtrips to Haneda Airport. Delta and American have been squabbling over one of those four slots since last October.
American Airlines has set a start date for its Los Angeles-Tokyo Haneda route. Image source: American Airlines.
After more than a year of effort, American Airlines finally appears to have won this battle, as it announced an official start date of February 11 for its new Los Angeles-Tokyo Haneda route. Unfortunately, this may prove to be a pyrrhic victory.
Troubled history at Haneda
It has only been five years since U.S. carriers were allowed back into Haneda Airport, but there have already been numerous setbacks . For a while, American Airlines flew between New York and Haneda, but it finally dropped the loss-making route in late 2013. Delta started with two Haneda routes, but its flights from Detroit also didn't work out, leading the carrier to apply for a Seattle-Haneda route instead.
That was the origin of the most recent dispute between American Airlines and Delta Air Lines. Delta discovered that flight demand between Seattle and Haneda was highly seasonal, so it cut back to just a handful of flights during the fall and winter last year: the bare minimum needed to satisfy the government's conditions for awarding the route to Delta.
American Airlines complained to the Department of Transportation that Delta was violating the spirit -- if not the letter -- of its agreement. Rather than have one of the country's four Haneda slots sit nearly idle for half the year, American argued that Delta should be required to fly every day, or else give the route authority to another airline (such as American) that would do so.
The DOT ultimately informed Delta that it would have to operate its Seattle-Haneda route 365 days a year, or drop the route entirely. The DOT also selected American's proposed Los Angeles-Haneda route as a "back-up" in case Delta didn't meet its conditions.
A familiar situation
Delta decided it couldn't make money flying the Seattle-Haneda route on a daily basis year-round and informed the DOT in June that it would end the route on September 30. That enabled American Airlines to start its Los Angeles-Haneda flights at the beginning of October.
Delta has been fighting American Airlines tooth and nail on Haneda access.
However, October 1 came and went without American Airlines starting those flights or putting any tickets on sale. Not surprisingly, Delta immediately lodged a formal complaint, arguing that American had violated its agreement to start service within 60 days and should lose the Haneda route authority.
American Airlines countered that it had been unable to obtain "commercially viable" slots at Haneda despite significant effort. It finally seems to have completed that task as of last week, allowing it to belatedly start selling tickets for Los Angeles-Haneda flights.
Best of luck
While American Airlines seems to feel it can't be the only major airline left out of Haneda, I don't have great hopes for this route to be profitable. Delta and Japanese airline ANA both already operate daily Los Angeles-Haneda flights, and there may not be enough demand to support a third flight.
Due to Japanese restrictions limiting flights between Haneda and the U.S. to overnight hours (10 p.m. to 7 a.m.), American's schedule is very similar to Delta's -- and rather inconvenient for most travelers. Some people may be willing to put up with that inconvenience to fly into Haneda Airport, but most would probably prefer to just fly into the more distant Narita Airport.
Looking back on this episode in a few years, it's quite possible American's management will be reminded of the famous proverb: Be careful what you wish for -- you just might get it.
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 Group, Inc. Is Finally Flying Back to Tokyo's Haneda Airport originally appeared on Fool.com.
Adam Levine-Weinberg is long November 2015 $40 calls on American Airlines Group and long January 2017 $40 calls on Delta Air Lines. 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 - 2015 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.
|
After more than a year of effort, American Airlines finally appears to have won this battle, as it announced an official start date of February 11 for its new Los Angeles-Tokyo Haneda route. Not surprisingly, Delta immediately lodged a formal complaint, arguing that American had violated its agreement to start service within 60 days and should lose the Haneda route authority. Due to Japanese restrictions limiting flights between Haneda and the U.S. to overnight hours (10 p.m. to 7 a.m.), American's schedule is very similar to Delta's -- and rather inconvenient for most travelers.
|
The article American Airlines Group, Inc. Is Finally Flying Back to Tokyo's Haneda Airport originally appeared on Fool.com. Adam Levine-Weinberg is long November 2015 $40 calls on American Airlines Group and long January 2017 $40 calls on Delta Air Lines. The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
For more than a year, American Airlines and Delta Air Lines have been caught up in a dogfight concerning access to Tokyo's Haneda Airport. Rather than have one of the country's four Haneda slots sit nearly idle for half the year, American argued that Delta should be required to fly every day, or else give the route authority to another airline (such as American) that would do so. Best of luck While American Airlines seems to feel it can't be the only major airline left out of Haneda, I don't have great hopes for this route to be profitable.
|
For more than a year, American Airlines and Delta Air Lines have been caught up in a dogfight concerning access to Tokyo's Haneda Airport. Delta started with two Haneda routes, but its flights from Detroit also didn't work out, leading the carrier to apply for a Seattle-Haneda route instead. The article American Airlines Group, Inc. Is Finally Flying Back to Tokyo's Haneda Airport originally appeared on Fool.com.
|
8190.0
|
2015-11-05 00:00:00 UTC
|
Spirit & Frontier Airlines Hike Bag Fees for Holiday Season
|
AAL
|
https://www.nasdaq.com/articles/spirit-frontier-airlines-hike-bag-fees-for-holiday-season-2015-11-05
|
nan
|
nan
|
In order to boost ancillary revenues as well as to efficiently manage the anticipated excess in baggage, low-cost U.S. carriers Spirit AirlinesSAVE and Frontier Airlines announced a hike in baggage fees for the upcoming holiday season.
Last month, Frontier announced plans of raising both checked and carry-on baggage fees by $5 to $10 for flights operating between Nov 19, 2015 and Jan 5, 2016. Likewise, Spirit announced an extra $2 payment for each way on all standard-sized checked bags for fliers during Dec 16, 2015, to Jan 4, 2016, as stated to FareCompare.com.
Interestingly, these low-cost carriers charge discounted ticket rates as compared to other premium carriers. Even after considering value-added services, the ticket prices have been kept at significantly low rates. This largely attracts budget-conscious passengers who can avail flight services to their favorite destinations at such reasonable costs. Moreover, the company's Ultra-Low Bare Fares(TM) program and the Frill Control(TM) service allow passengers to pay for only those services that they require.
At present, the U.S. legacy airline operators are facing tough competition from low- budget carriers. Riding primarily on weak fuel costs, American Airlines Group Inc. AAL recently decided to offer exclusive low-priced air tickets, starting next year. This will help the company counter competition from low-cost carriers like Spirit and Frontier. Meanwhile, Delta Air Lines, Inc. DAL also offers low-priced "Basic Economy" tickets to its customers.
Such a strategic move by premium U.S. carriers will certainly impact profits of ultra-low cost airline companies. Hence, we are skeptical about both Frontier and Spirit's decision to raise baggage fees in such a competitive environment, as it may hurt their business moving ahead.
Spirit currently carries a Zacks Rank #4 (Sell). A better-ranked stock in the same space is JetBlue Airways Corporation JBLU with 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
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.
|
Riding primarily on weak fuel costs, American Airlines Group Inc. AAL recently decided to offer exclusive low-priced air tickets, starting next year. Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): 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. Last month, Frontier announced plans of raising both checked and carry-on baggage fees by $5 to $10 for flights operating between Nov 19, 2015 and Jan 5, 2016.
|
Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): 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. Riding primarily on weak fuel costs, American Airlines Group Inc. AAL recently decided to offer exclusive low-priced air tickets, starting next year. In order to boost ancillary revenues as well as to efficiently manage the anticipated excess in baggage, low-cost U.S. carriers Spirit AirlinesSAVE and Frontier Airlines announced a hike in baggage fees for the upcoming holiday season.
|
Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): 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. Riding primarily on weak fuel costs, American Airlines Group Inc. AAL recently decided to offer exclusive low-priced air tickets, starting next year. In order to boost ancillary revenues as well as to efficiently manage the anticipated excess in baggage, low-cost U.S. carriers Spirit AirlinesSAVE and Frontier Airlines announced a hike in baggage fees for the upcoming holiday season.
|
Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): 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. Riding primarily on weak fuel costs, American Airlines Group Inc. AAL recently decided to offer exclusive low-priced air tickets, starting next year. Moreover, the company's Ultra-Low Bare Fares(TM) program and the Frill Control(TM) service allow passengers to pay for only those services that they require.
|
8191.0
|
2015-11-04 00:00:00 UTC
|
Delta Air Lines, Inc. Gets Closer to a Revenue Recovery
|
AAL
|
https://www.nasdaq.com/articles/delta-air-lines-inc-gets-closer-revenue-recovery-2015-11-04
|
nan
|
nan
|
The United States' three big global airlines -- American Airlines , Delta Air Lines , and United Continental -- have all reported declining unit revenue during 2015.
This unit revenue weakness has three main causes. First, because all three sell many tickets for international flights in foreign currencies, the strong dollar has negatively affected unit revenue. Second, a number of countries (particularly in Asia) have mechanistic fuel surcharges that follow jet fuel prices. As a result, the drop in jet fuel prices since mid-2014 has reduced unit revenue. Third, rising competition has driven down fares in several markets.
A variety of factors have led to unit revenue declines at the legacy carriers. Photo: The Motley Fool
American, Delta, and United all recognize that they can't rely on fuel prices continuing to fall. In order to maintain their high profit margins, they will need to get back to unit revenue growth: preferably sooner rather than later. This has led to a "race" of sorts to improve unit revenue -- and Delta is winning.
Delta has a clear plan
While Delta, American, and United have all outlined steps that could help bolster unit revenue, Delta has by far the clearest plan. First, it has broadly rolled out "branded fares" that allow it to better segment its customer base. (That's airline-speak for selling tickets at different prices to different customers, depending on how much they are willing to pay.)
The crux of this strategy has been the introduction of "Basic Economy" fares that Delta uses to match ultra-low cost carriers' fares. Basic Economy tickets don't include seat assignments or any flexibility for flight changes or upgrades. Highly price-sensitive customers buy these tickets, but most Delta customers voluntarily pay more for a Main Cabin fare with fewer restrictions.
Meanwhile, Delta is aggressively slashing capacity in weak international markets. Back in April, the carrier announced that it would reduce international capacity by 3% year over year beginning with its winter schedule, with cuts focused in Japan, Brazil, Russia, Africa, India, and the Middle East. By October, it had increased the scope of its capacity cuts, projecting a 4.5% year-over-year reduction in international capacity for Q4.
United and American face big challenges
By contrast, American Airlines' most recent plan calls for 0%-1% international capacity growth in Q4 and 4%-6% international capacity growth in 2016. It has already dramatically cut capacity to Brazil, one of its top international markets, but results remain terrible there, as the Brazilian real has fallen precipitously against the dollar this year and the economy has tilted into recession.
American Airlines is growing international capacity despite unit revenue pressures. Photo: American Airlines
American Airlines executives have indicated that they aren't willing to cut any further in Brazil for now. They have also stressed the need to keep growing in the transpacific market, where American is much weaker than United and Delta. American also faces the most direct competition from budget carriers . These factors will probably lead to further unit revenue declines for at least a few more quarters.
As for United Continental, it expects modest capacity reductions in the Atlantic and Pacific regions to be more than offset by growth in Latin America during Q4. It's also planning 2%-3% growth in international capacity for 2016.
Like American Airlines in Brazil, United is holding the line on capacity in China even as unit revenue has come under pressure there. Rapid capacity growth by Chinese carriers has thrown the market out of balance, and United has opted to wait things out rather than risk damaging its leading market share in China. United's unique exposure to the oil industry through its Houston hub isn't helping its unit revenue, either.
Capacity cuts are already driving results at Delta
Delta's international capacity cuts went into effect at the beginning of October and are already shoring up its unit revenue. International capacity declined 3.9% year over year last month, with most of the cuts concentrated in the Pacific region (primarily Japan). As a result, Delta estimates that passenger revenue per available seat mile (PRASM) declined just 1% year over year.
Delta's unit revenue nearly reached the flat line last month. Photo: The Motley Fool
Last month, Delta's management projected that PRASM would decline 2.5%-4.5% year over year in Q4, with November being the best month, December being the worst, and October somewhere in between. The carrier's strong October performance makes that guidance seem conservative, though.
It's true that the timing of Thanksgiving and Christmas compared to last year will dampen airlines' December unit revenue. However, with October PRASM being down just 1% and November PRASM potentially being flat or better, even a mid-high single digit PRASM decline in December would leave Delta at or above the top end of its guidance range.
That's likely to put Delta well ahead of its competitors in the quest to return to unit revenue growth. United Continental has projected that PRASM will decline 4%-6% year over year in Q4, while American Airlines expects a 5%-7% drop.
Delta's improving unit revenue trajectory puts it on pace to get its unit revenue performance to the flat line in the first half of 2015 and into positive territory by the middle of the year. The recovery is likely to take a little longer at American Airlines and United Continental.
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 Closer to a Revenue Recovery originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of United Continental Holdings, and is long November 2015 $40 calls on American Airlines Group and long January 2017 $40 calls on Delta Air Lines, 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 - 2015 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.
|
Photo: The Motley Fool American, Delta, and United all recognize that they can't rely on fuel prices continuing to fall. It has already dramatically cut capacity to Brazil, one of its top international markets, but results remain terrible there, as the Brazilian real has fallen precipitously against the dollar this year and the economy has tilted into recession. As for United Continental, it expects modest capacity reductions in the Atlantic and Pacific regions to be more than offset by growth in Latin America during Q4.
|
The United States' three big global airlines -- American Airlines , Delta Air Lines , and United Continental -- have all reported declining unit revenue during 2015. United and American face big challenges By contrast, American Airlines' most recent plan calls for 0%-1% international capacity growth in Q4 and 4%-6% international capacity growth in 2016. Adam Levine-Weinberg owns shares of United Continental Holdings, and is long November 2015 $40 calls on American Airlines Group and long January 2017 $40 calls on Delta Air Lines, The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
The United States' three big global airlines -- American Airlines , Delta Air Lines , and United Continental -- have all reported declining unit revenue during 2015. Delta has a clear plan While Delta, American, and United have all outlined steps that could help bolster unit revenue, Delta has by far the clearest plan. Capacity cuts are already driving results at Delta Delta's international capacity cuts went into effect at the beginning of October and are already shoring up its unit revenue.
|
The United States' three big global airlines -- American Airlines , Delta Air Lines , and United Continental -- have all reported declining unit revenue during 2015. United and American face big challenges By contrast, American Airlines' most recent plan calls for 0%-1% international capacity growth in Q4 and 4%-6% international capacity growth in 2016. United Continental has projected that PRASM will decline 4%-6% year over year in Q4, while American Airlines expects a 5%-7% drop.
|
8192.0
|
2015-11-04 00:00:00 UTC
|
Airline Stock Roundup: Virgin America Outperforms in Q3, Delta's October Traffic Impresses on Capacity Cuts
|
AAL
|
https://www.nasdaq.com/articles/airline-stock-roundup%3A-virgin-america-outperforms-in-q3-deltas-october-traffic-impresses
|
nan
|
nan
|
The past week saw California-based low-cost carrier Virgin America VA churning out impressive financial numbers for the third quarter of 2015, with both earnings and revenues exceeding expectations.
On the traffic front, airline behemoth Delta Air Lines, Inc. DAL reported impressive traffic data for October on the back of substantial international capacity reduction. However, Alaska Air Group ALK , unlike Delta, reported a decrease in its October load factor (% of seats filled with passengers), as capacity growth outpaced the rise in air traffic for the month.
On the price front, the NYSE ARCA Airline index climbed 2.7% to $93.75 over the past week on the back of weak oil prices .
(Read the last Airline Stock Roundup for Oct 28, 2015 ).
Recap of the Past Week's Most Important Stories
1. As has been the case with carriers who have already reported their third quarter financial numbers, low fuel costs aided Virgin America's quarterly results as well. The low-cost carrier, which went public in Nov 2014, reported earnings of $1.64 per share outpacing the Zacks Consensus Estimate by 7 cents.
Operating revenues came in at $410.9 million, surpassing the Zacks Consensus Estimate of $406 million and the year-ago figure by 1.3% (read more: Virgin America Q3 Earnings, Revenues Top on Low Fuel Cost ).
2. Delta is living up to its forecast to reduce international capacity in the fourth quarter of 2015. On the third quarter conference call, the carrier stated that it will cut its international capacity in the fourth quarter by 4.5% with major reductions in Japan, Brazil, Russia, and the Middle East. A 4% cut in its international capacity to match the weak demand aided the carrier's October traffic results.
Airline traffic, measured in revenue passenger miles, went up 3.5% year over year on a consolidated basis. Consolidated capacity or available seat miles (ASMs) declined 0.2% on the international capacity cuts. Load factor on a consolidated basis was up 310 basis points (bps) to 86.9%. The company registered a completion factor of 100%, with 92.1% of its flights on schedule.
Delta further stated that its passenger unit revenue (PRASM: a measure of unit revenue) for the month, on a consolidated basis, declined merely 1% year over year due to foreign exchange pressure. The marginal fall in PRASM was encouraging given that the metric has witnessed significant declines in the past few months.
Moreover, according to media reports, Delta, which will apparently exit the Airlines for America Trade Association next year, will stop flying to Dubai from Atlanta effective early next year, due to excessive competition from Middle East carriers.
3. Alaska Air Group, the parent company of Alaska Airlines, reported 12% growth in its October air traffic on a 12.9% rise in capacity. Load factor fell 70 bps to 82.3%, courtesy a greater rise in capacity compared with air traffic.
Moreover, Alaska Airlines, which is constantly making efforts to expand its operations, announced that it has started flying to Costa Rica. Costa Rica, a favorite tourist spot, is the first international destination for the carrier in 24 years (read more: Alaska Airlines Adds Routes, Targets International Expansion ).
4. In keeping with its expansion initiatives, Dallas-based low-cost carrier Southwest Airlines LUV stated that it will launch ten new non-stop routes in 2016. According to media reports, the carrier intends to stop operating certain flights like the ones between Dayton International Airport and Baltimore, Denver and Orlando (read more: Southwest Airlines Unveils 10 New Routes, Eyes Spring Travel ).
Performance
The following table shows the price movement of the major airline players over the past week and during the last 6 months.
With the third quarter earnings season almost over, it is not surprising that the price movement of major airline stocks remained muted over the past five trading days. Per the above chart, price movement of airline stocks in the last six months exhibited a mixed trend with Latin American carrier GOL Linhas GOL declining the most in the period.
What's Next in the Airline Biz?
We expect October traffic updates from carriers like American Airlines Group AAL in the coming days. Meanwhile, investor focus will also remain on the third quarter earnings report of Republic Airways Holdings Inc. RJET .
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
REPUBLIC AIRWAY (RJET): Free Stock Analysis Report
GOL LINHAS-ADR (GOL): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
VIRGIN AMERICA (VA): 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.
|
We expect October traffic updates from carriers like American Airlines Group AAL in the coming days. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report REPUBLIC AIRWAY (RJET): Free Stock Analysis Report GOL LINHAS-ADR (GOL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. The past week saw California-based low-cost carrier Virgin America VA churning out impressive financial numbers for the third quarter of 2015, with both earnings and revenues exceeding expectations.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report REPUBLIC AIRWAY (RJET): Free Stock Analysis Report GOL LINHAS-ADR (GOL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. We expect October traffic updates from carriers like American Airlines Group AAL in the coming days. On the traffic front, airline behemoth Delta Air Lines, Inc. DAL reported impressive traffic data for October on the back of substantial international capacity reduction.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report REPUBLIC AIRWAY (RJET): Free Stock Analysis Report GOL LINHAS-ADR (GOL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. We expect October traffic updates from carriers like American Airlines Group AAL in the coming days. On the traffic front, airline behemoth Delta Air Lines, Inc. DAL reported impressive traffic data for October on the back of substantial international capacity reduction.
|
Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report REPUBLIC AIRWAY (RJET): Free Stock Analysis Report GOL LINHAS-ADR (GOL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. We expect October traffic updates from carriers like American Airlines Group AAL in the coming days. Alaska Air Group, the parent company of Alaska Airlines, reported 12% growth in its October air traffic on a 12.9% rise in capacity.
|
8193.0
|
2015-11-03 00:00:00 UTC
|
The Zacks Analyst Blog Highlights: American Airlines, General Motors, Travelers Companies, Northern Tier Energy and Hawaiian Holdings
|
AAL
|
https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-american-airlines-general-motors-travelers-companies
|
nan
|
nan
|
For Immediate Release
Chicago, IL - November 03, 2015 - 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 American Airlines Group Inc. ( AAL ), General Motors Company ( GM ), Travelers Companies, Inc. ( TRV ), Northern Tier Energy LP ( NTI ) and Hawaiian Holdings Inc. ( HA ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Monday's Analyst Blog:
5 Low P/E Stocks Momentum Investors Will Love
The stock market continues to be plagued by headwinds, making it difficult for investors to sketch a profitable investment strategy. Concerns related to the Chinese economy, still low oil prices and the persistent low rate environment continues to play dominant factors while reaching investment decisions.
As the U.S. economy is braving challenges amid the global macro headwinds, market volatility is expected to persist in the near term. Notably, the S&P 500 gained 8.3% month to date while the Dow Jones Industrial Average gained 8.5%.
Factors at Play
On Thursday, the "advance" estimate by the Bureau of Economic Analysis showed that growth in real gross domestic product (GDP), adjusted for price changes, slowed to an annual rate of 1.5% in the third quarter of 2015, down from 3.9% growth recorded in the second quarter. The decline reflected a fall in private inventory investment primarily in wholesale trade and in manufacturing. Nevertheless, on a positive note, consumer spending increased, primarily reflecting increased spending in health care services as well as nondurable and durable goods.
Separately, the National Association of Realtors reported that the Pending Home Sales Index dropped to the second lowest reading this year. This index dropped 2.3% to 106.8 in September from the August figure of 109.3, which was revised downward. However, the index is up 3% year on year and marked the 13th consecutive month of year-on-year increase.
Reaffirming the current 0-0.25% interest rate, the Oct 28 release of the U.S. Federal Reserve acknowledged the expanding economic activity in the U.S at a "moderate pace" with an improving housing sector. The labor market continues to recover despite a slowdown in the pace of job growth. A rate hike in December is likely in the cards as the release highlighted "In determining whether it will be appropriate to raise the target range at its next meeting, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation."
Regarding the Chinese economy, factory activity of China declined at a slower pace in October, though it was the eighth consecutive month of contraction, according to a private survey. The Caixin China manufacturing purchasing managers index (PMI), a metric for the country's manufacturing activity, edged up to 48.3 in October from 47.2 in September, per the data released on Monday by Caixin Media Co. and research firm Markit. Notably, a reading above 50 indicates expansion. The Caixin survey comes just a day after the release of the China's official PMI for October, which remained unchanged from the previous month at 49.8.
Given such a backdrop, we believe it is time for investors to readjust the investment portfolio in order to capitalize on the positives. Adding stocks with low PE and strong momentum seems to be a good strategy now.
The Right Picks
Momentum traders and investors look to take advantage of upward trends or downward trends in a stock's price or earnings. A great way to pick momentum stocks is by analyzing the short-term price activity. In addition to this, lower P/E ratio adds further prospects.
With the help of our new style score system , we have selected stocks with Zacks Momentum Style Score 'A' with price movement of more than 10% in the past 4 weeks. These stocks carry a Zacks Rank #1 (Strong Buy) or 2 (Buy) and are currently trading at a Price/Earnings (F1) ratio of less than 12. Also, we have considered EPS estimate revisions of more than 1% in the past 4 weeks for the current year.
Here are the five stocks that met the criteria:
American Airlines Group Inc. ( AAL ): The company was formed following the December 2013 merger between AMR (American Airlines' parent group, which was founded in 1934) and US Airways. The merger, which took place after a bankruptcy filing by American Airlines, resulted in the formation of the largest airline internationally. Interestingly, the carrier has been making substantial profits ever since the merger took place. Based in Texas, the carrier operates more than 6,700 daily flights to over 330 destinations in more than 50 nations across the globe from its hub.
Momentum Score: 'A'
Zacks Rank: 2
P/E Multiple: 5.15
Price Change in the Past 4 Weeks : 19.03%
EPS estimate revisions for the Current Year: 2.04%
General Motors Company ( GM ): The Detroit-based company, originally incorporated in 1908, is a leading global automotive company. Due to the unfavorable economic conditions and a rapid decline in sales, the company filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code on Jun 1, 2009. Pursuant to this, the New GM was formed by acquiring most of the assets and assuming certain liabilities of the Old GM, and some of its direct and indirect subsidiaries.
GM, along with its strategic partners, produces, sells and services cars, trucks and parts under four core brands - Chevrolet, Buick, GMC and Cadillac. GM assembles passenger cars, crossover vehicles, light trucks, sport utility vehicles (SUVs), vans and other vehicles.
Momentum Score: 'A'
Zacks Rank: 2
P/E Multiple: 7.30
Price Change in the Past 4 Weeks : 16.29%
EPS estimate revisions for the Current Year: 5.39%
The Travelers Companies, Inc. ( TRV ): Based in New York, the company is engaged in providing a range of commercial and personal property, and casualty insurance products and services to clients including businesses, government units, associations, and individuals in the Unites States and select international markets. In addition, the company meets insurance needs in more than 90 countries worldwide through its network of insurers.
Momentum Score: 'A'
Zacks Rank: 2
P/E Multiple: 10.84
Price Change in the Past 4 Weeks : 13.42%
EPS estimate revisions for the Current Year: 6.65%
Northern Tier Energy LP ( NTI ): Based in Arizona, the company is an independent downstream energy company with refining, retail and pipeline operations that serve the Petroleum Administration for Defense District (PADD) II region of the U.S. It operates its assets in two business segments: the refining business and the retail business.
Momentum Score: 'A'
Zacks Rank: 2
P/E Multiple: 6.70
Price Change in the Past 4 Weeks : 17.72%
EPS estimate revisions for the Current Year: 3.58%
Hawaiian Holdings Inc. ( HA ): Based in Hawaii, the company through its subsidiary, Hawaiian Airlines, Inc., provides scheduled air transportation of passengers and cargo. It daily services on routes lying between the state of Hawaii and Los Angeles, Oakland, Sacramento, San Diego, San Francisco, and San Jose, California; Las Vegas, Nevada; Phoenix, Arizona; Portland, Oregon; and Seattle, Washington. The company also offers daily services on its international routes.
Momentum Score: 'A'
Zacks Rank: 1
P/E Multiple: 11.35
Price Change in the Past 4 Weeks : 40.60%
EPS estimate revisions for the Current Year: 11.94%
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
GENERAL MOTORS (GM): Free Stock Analysis Report
TRAVELERS COS (TRV): Free Stock Analysis Report
NORTHERN TIER (NTI): Free Stock Analysis Report
HAWAIIAN HLDGS (HA): 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 American Airlines Group Inc. ( AAL ), General Motors Company ( GM ), Travelers Companies, Inc. ( TRV ), Northern Tier Energy LP ( NTI ) and Hawaiian Holdings Inc. ( HA ). Here are the five stocks that met the criteria: American Airlines Group Inc. ( AAL ): The company was formed following the December 2013 merger between AMR (American Airlines' parent group, which was founded in 1934) and US Airways. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report GENERAL MOTORS (GM): Free Stock Analysis Report TRAVELERS COS (TRV): Free Stock Analysis Report NORTHERN TIER (NTI): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report To read this article on Zacks.com click here.
|
Stocks recently featured in the blog include the American Airlines Group Inc. ( AAL ), General Motors Company ( GM ), Travelers Companies, Inc. ( TRV ), Northern Tier Energy LP ( NTI ) and Hawaiian Holdings Inc. ( HA ). Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report GENERAL MOTORS (GM): Free Stock Analysis Report TRAVELERS COS (TRV): Free Stock Analysis Report NORTHERN TIER (NTI): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report To read this article on Zacks.com click here. Here are the five stocks that met the criteria: American Airlines Group Inc. ( AAL ): The company was formed following the December 2013 merger between AMR (American Airlines' parent group, which was founded in 1934) and US Airways.
|
Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report GENERAL MOTORS (GM): Free Stock Analysis Report TRAVELERS COS (TRV): Free Stock Analysis Report NORTHERN TIER (NTI): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks recently featured in the blog include the American Airlines Group Inc. ( AAL ), General Motors Company ( GM ), Travelers Companies, Inc. ( TRV ), Northern Tier Energy LP ( NTI ) and Hawaiian Holdings Inc. ( HA ). Here are the five stocks that met the criteria: American Airlines Group Inc. ( AAL ): The company was formed following the December 2013 merger between AMR (American Airlines' parent group, which was founded in 1934) and US Airways.
|
Stocks recently featured in the blog include the American Airlines Group Inc. ( AAL ), General Motors Company ( GM ), Travelers Companies, Inc. ( TRV ), Northern Tier Energy LP ( NTI ) and Hawaiian Holdings Inc. ( HA ). Here are the five stocks that met the criteria: American Airlines Group Inc. ( AAL ): The company was formed following the December 2013 merger between AMR (American Airlines' parent group, which was founded in 1934) and US Airways. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report GENERAL MOTORS (GM): Free Stock Analysis Report TRAVELERS COS (TRV): Free Stock Analysis Report NORTHERN TIER (NTI): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report To read this article on Zacks.com click here.
|
8194.0
|
2015-11-03 00:00:00 UTC
|
Investors Don't Understand Spirit Airlines Incorporated
|
AAL
|
https://www.nasdaq.com/articles/investors-dont-understand-spirit-airlines-incorporated-2015-11-03
|
nan
|
nan
|
While Spirit Airlines had prepared investors for disappointment with a mid-October investor update, shares of the budget airline plummeted even further after its earnings release last week. Unit revenue fell 17.5% year over year in Q3 and Spirit expects an even bigger decline in Q4 .
Spirit Airlines YTD Stock Performance, data by YCharts .
CEO Ben Baldanza even raised the possibility that Spirit's earnings could contract somewhat in 2016, causing many investors to lose all hope. The stock now trades for just nine times earnings, emphasizing how pessimistic investors are. However, Mr. Market is seriously underrating Spirit Airlines' long-term prospects.
Revenue pressure should moderate in 2016
While investors and analysts have become very pessimistic about Spirit Airlines lately, it's worth noting that the airline posted a record pre-tax profit margin of 26.9% last quarter, putting it near the very top of the airline industry. Yet this was overshadowed by Spirit's steep unit revenue decline.
Spirit Airlines has historically had success by undercutting the major airlines on price. Due to its low cost structure, Spirit has been able to earn superior profits with much lower fares. However, these rivals -- led by American Airlines -- are increasingly choosing to match Spirit's prices.
American Airlines is aggressively matching Spirit's prices. Photo: American Airlines
It's counterintuitive that airlines with higher costs could put pressure on Spirit Airlines' pricing. But as American Airlines President Scott Kirby recently noted, this price matching is allowing American and other legacy carriers to fill what would otherwise be empty seats at off-peak times.
Fortunately, the industry is probably nearing the bottom on pricing. Last quarter, Spirit's average fare fell 21% year over year to $66.96. For Q4, Spirit is projecting an even steeper decline from a lower base of $73.21. That will push its average fare below $60 this quarter.
Fares are significantly higher on peak days when it's not necessary to offer such low prices to fill up planes. Meanwhile, wide availability of bargain fares will stimulate demand. Legacy carriers like American Airlines can't justify further price cuts when they're already filling their planes. As a result, I don't expect the pricing pressure to worsen from here in absolute terms. As the year-over-year comparisons get easier during 2016, Spirit's unit revenue declines should abate.
It's all about low costs
While I expect Spirit's unit revenue to stabilize during 2016, it may not return to growth (barring a big increase in fuel prices). This is one of the biggest concerns held by the bears. However, whereas other airlines rely on unit revenue growth to maintain or expand their margins, Spirit is much more focused on unit cost reductions.
Spirit is still one of the smaller U.S. airlines today; it ended last quarter with 76 aircraft in its fleet. This means it has the opportunity to reduce its unit costs simply by growing and achieving greater scale.
Beyond that, a strategic shift toward larger planes will reduce unit costs. By the end of 2019, the average seat count on Spirit's planes will rise by about 15% relative to mid-2015, mainly due to the replacement of 145-seat A319s with 228-seat A321s. All else equal, this would drive a high-single-digit decline in Spirit's unit costs. This densification strategy and a move to new engine technology should drive 2%-3% annual improvements in fuel efficiency, too.
Spirit is shifting its fleet away from the A319 toward larger planes. Image source: Spirit Airlines.
Spirit Airlines will also benefit from lower financing costs as it has started to purchase aircraft rather than lease them. The company recently completed its first EETC financing (a low-cost method of raising aircraft debt). It achieved an average interest rate of just 4.15% to finance 15 planes arriving in Q4 and throughout 2016.
CFO Ted Christie did warn investors recently that the company will face some cost headwinds related to the leased aircraft it is returning in the next few years. However, he still expects Spirit's unit costs to stay on a steady to declining trajectory.
Strong growth and strong margins
While Spirit Airlines is forecasting a year-over-year margin decline in Q4 and Baldanza has suggested that its profit margin could fall again in 2016, the company is currently earning well above its long-term operating margin target of at least 15%. According to its most recent guidance, Spirit expects to end 2015 with a 21.5%-23% operating margin.
Spirit's perceived "problem" comes from the fact that it began 2015 expecting to post an even higher 24%-29% full-year operating margin. Even if its profit margin declines again in 2016, it will almost certainly remain well above 15%.
Given Spirit's steadily improving cost structure and already rock-bottom fares, it doesn't seem very likely that the company's profit margin will fall below its long-term target. Even if Spirit can only sustain an 18% operating margin in the long run (down a few percentage points from 2015), it will be able to produce tremendous earnings growth in the next decade as it expands.
Spirit plans to grow 15%-20% annually for the foreseeable future. That could boost its revenue to roughly $8 billion-$10 billion by 2025. (Its long-term growth opportunity is even larger.) At that scale, Spirit Airlines should produce annual operating income of at least $1.5 billion, more than triple its operating income for the past 12 months.
In other words, Spirit's massive growth potential outweighs the (very real) risk that its record 2015 profit margin is unsustainable. The company's beaten-down market cap of less than $2.6 billion doesn't reflect this potential whatsoever and creates huge upside for Spirit Airlines stock.
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 Investors Don't Understand Spirit Airlines Incorporated originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of Spirit Airlines and is long November 2015 $40 calls on American Airlines Group, long March 2016 $40 calls on Spirit Airlines, 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 - 2015 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.
|
CFO Ted Christie did warn investors recently that the company will face some cost headwinds related to the leased aircraft it is returning in the next few years. Given Spirit's steadily improving cost structure and already rock-bottom fares, it doesn't seem very likely that the company's profit margin will fall below its long-term target. The company's beaten-down market cap of less than $2.6 billion doesn't reflect this potential whatsoever and creates huge upside for Spirit Airlines stock.
|
Revenue pressure should moderate in 2016 While investors and analysts have become very pessimistic about Spirit Airlines lately, it's worth noting that the airline posted a record pre-tax profit margin of 26.9% last quarter, putting it near the very top of the airline industry. Photo: American Airlines It's counterintuitive that airlines with higher costs could put pressure on Spirit Airlines' pricing. Adam Levine-Weinberg owns shares of Spirit Airlines and is long November 2015 $40 calls on American Airlines Group, long March 2016 $40 calls on Spirit Airlines, and long June 2016 $30 calls on Spirit Airlines.
|
Revenue pressure should moderate in 2016 While investors and analysts have become very pessimistic about Spirit Airlines lately, it's worth noting that the airline posted a record pre-tax profit margin of 26.9% last quarter, putting it near the very top of the airline industry. Photo: American Airlines It's counterintuitive that airlines with higher costs could put pressure on Spirit Airlines' pricing. Adam Levine-Weinberg owns shares of Spirit Airlines and is long November 2015 $40 calls on American Airlines Group, long March 2016 $40 calls on Spirit Airlines, and long June 2016 $30 calls on Spirit Airlines.
|
Revenue pressure should moderate in 2016 While investors and analysts have become very pessimistic about Spirit Airlines lately, it's worth noting that the airline posted a record pre-tax profit margin of 26.9% last quarter, putting it near the very top of the airline industry. Photo: American Airlines It's counterintuitive that airlines with higher costs could put pressure on Spirit Airlines' pricing. Even if its profit margin declines again in 2016, it will almost certainly remain well above 15%.
|
8195.0
|
2015-11-02 00:00:00 UTC
|
5 Low P/E Stocks Momentum Investors Will Love
|
AAL
|
https://www.nasdaq.com/articles/5-low-p-e-stocks-momentum-investors-will-love-2015-11-02
|
nan
|
nan
|
The stock market continues to be plagued by headwinds, making it difficult for investors to sketch a profitable investment strategy. Concerns related to the Chinese economy, still low oil prices and the persistent low rate environment continues to play dominant factors while reaching investment decisions.
As the U.S. economy is braving challenges amid the global macro headwinds, market volatility is expected to persist in the near term. Notably, the S&P 500 gained 8.3% month to date while the Dow Jones Industrial Average gained 8.5%.
Factors at Play
On Thursday, the "advance" estimate by the Bureau of Economic Analysis showed that growth in real gross domestic product (GDP), adjusted for price changes, slowed to an annual rate of 1.5% in the third quarter of 2015, down from 3.9% growth recorded in the second quarter. The decline reflected a fall in private inventory investment primarily in wholesale trade and in manufacturing. Nevertheless, on a positive note, consumer spending increased, primarily reflecting increased spending in health care services as well as nondurable and durable goods.
Separately, the National Association of Realtors reported that the Pending Home Sales Index dropped to the second lowest reading this year. This index dropped 2.3% to 106.8 in September from the August figure of 109.3, which was revised downward. However, the index is up 3% year on year and marked the 13th consecutive month of year-on-year increase.
Reaffirming the current 0-0.25% interest rate, the Oct 28 release of the U.S. Federal Reserve acknowledged the expanding economic activity in the U.S at a "moderate pace" with an improving housing sector. The labor market continues to recover despite a slowdown in the pace of job growth. A rate hike in December is likely in the cards as the release highlighted "In determining whether it will be appropriate to raise the target range at its next meeting, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation."
Regarding the Chinese economy, factory activity of China declined at a slower pace in October, though it was the eighth consecutive month of contraction, according to a private survey. The Caixin China manufacturing purchasing managers index (PMI), a metric for the country's manufacturing activity, edged up to 48.3 in October from 47.2 in September, per the data released on Monday by Caixin Media Co. and research firm Markit. Notably, a reading above 50 indicates expansion. The Caixin survey comes just a day after the release of the China's official PMI for October, which remained unchanged from the previous month at 49.8.
Given such a backdrop, we believe it is time for investors to readjust the investment portfolio in order to capitalize on the positives. Adding stocks with low PE and strong momentum seems to be a good strategy now.
The Right Picks
Momentum traders and investors look to take advantage of upward trends or downward trends in a stock's price or earnings. A great way to pick momentum stocks is by analyzing the short-term price activity. In addition to this, lower P/E ratio adds further prospects.
With the help of our new style score system , we have selected stocks with Zacks Momentum Style Score 'A' with price movement of more than 10% in the past 4 weeks. These stocks carry a Zacks Rank #1 (Strong Buy) or 2 (Buy) and are currently trading at a Price/Earnings (F1) ratio of less than 12. Also, we have considered EPS estimate revisions of more than 1% in the past 4 weeks for the current year.
Here are the five stocks that met the criteria:
American Airlines Group Inc.AAL : The company was formed following the December 2013 merger between AMR (American Airlines' parent group, which was founded in 1934) and US Airways. The merger, which took place after a bankruptcy filing by American Airlines, resulted in the formation of the largest airline internationally. Interestingly, the carrier has been making substantial profits ever since the merger took place. Based in Texas, the carrier operates more than 6,700 daily flights to over 330 destinations in more than 50 nations across the globe from its hub.
Momentum Score: 'A'
Zacks Rank: 2
P/E Multiple: 5.15
Price Change in the Past 4 Weeks : 19.03%
EPS estimate revisions for the Current Year: 2.04%
General Motors CompanyGM : The Detroit-based company, originally incorporated in 1908, is a leading global automotive company. Due to the unfavorable economic conditions and a rapid decline in sales, the company filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code on Jun 1, 2009. Pursuant to this, the New GM was formed by acquiring most of the assets and assuming certain liabilities of the Old GM, and some of its direct and indirect subsidiaries.
GM, along with its strategic partners, produces, sells and services cars, trucks and parts under four core brands - Chevrolet, Buick, GMC and Cadillac. GM assembles passenger cars, crossover vehicles, light trucks, sport utility vehicles (SUVs), vans and other vehicles.
Momentum Score: 'A'
Zacks Rank: 2
P/E Multiple: 7.30
Price Change in the Past 4 Weeks : 16.29%
EPS estimate revisions for the Current Year: 5.39%
The Travelers Companies, Inc.TRV : Based in New York, the company is engaged in providing a range of commercial and personal property, and casualty insurance products and services to clients including businesses, government units, associations, and individuals in the Unites States and select international markets. In addition, the company meets insurance needs in more than 90 countries worldwide through its network of insurers.
Momentum Score: 'A'
Zacks Rank: 2
P/E Multiple: 10.84
Price Change in the Past 4 Weeks : 13.42%
EPS estimate revisions for the Current Year: 6.65%
Northern Tier Energy LPNTI : Based in Arizona, the company is an independent downstream energy company with refining, retail and pipeline operations that serve the Petroleum Administration for Defense District (PADD) II region of the U.S. It operates its assets in two business segments: the refining business and the retail business.
Momentum Score: 'A'
Zacks Rank: 2
P/E Multiple: 6.70
Price Change in the Past 4 Weeks : 17.72%
EPS estimate revisions for the Current Year: 3.58%
Hawaiian Holdings Inc.HA : Based in Hawaii, the company through its subsidiary, Hawaiian Airlines, Inc., provides scheduled air transportation of passengers and cargo. It daily services on routes lying between the state of Hawaii and Los Angeles, Oakland, Sacramento, San Diego, San Francisco, and San Jose, California; Las Vegas, Nevada; Phoenix, Arizona; Portland, Oregon; and Seattle, Washington. The company also offers daily services on its international routes.
Momentum Score: 'A'
Zacks Rank: 1
P/E Multiple: 11.35
Price Change in the Past 4 Weeks : 40.60%
EPS estimate revisions for the Current Year: 11.94%
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
TRAVELERS COS (TRV): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
HAWAIIAN HLDGS (HA): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
NORTHERN TIER (NTI): 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.
|
Here are the five stocks that met the criteria: American Airlines Group Inc.AAL : The company was formed following the December 2013 merger between AMR (American Airlines' parent group, which was founded in 1934) and US Airways. Click to get this free report TRAVELERS COS (TRV): Free Stock Analysis Report GENERAL MOTORS (GM): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report NORTHERN TIER (NTI): Free Stock Analysis Report To read this article on Zacks.com click here. Reaffirming the current 0-0.25% interest rate, the Oct 28 release of the U.S. Federal Reserve acknowledged the expanding economic activity in the U.S at a "moderate pace" with an improving housing sector.
|
Click to get this free report TRAVELERS COS (TRV): Free Stock Analysis Report GENERAL MOTORS (GM): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report NORTHERN TIER (NTI): Free Stock Analysis Report To read this article on Zacks.com click here. Here are the five stocks that met the criteria: American Airlines Group Inc.AAL : The company was formed following the December 2013 merger between AMR (American Airlines' parent group, which was founded in 1934) and US Airways. Momentum Score: 'A' Zacks Rank: 2 P/E Multiple: 10.84 Price Change in the Past 4 Weeks : 13.42% EPS estimate revisions for the Current Year: 6.65% Northern Tier Energy LPNTI : Based in Arizona, the company is an independent downstream energy company with refining, retail and pipeline operations that serve the Petroleum Administration for Defense District (PADD) II region of the U.S.
|
Click to get this free report TRAVELERS COS (TRV): Free Stock Analysis Report GENERAL MOTORS (GM): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report NORTHERN TIER (NTI): Free Stock Analysis Report To read this article on Zacks.com click here. Here are the five stocks that met the criteria: American Airlines Group Inc.AAL : The company was formed following the December 2013 merger between AMR (American Airlines' parent group, which was founded in 1934) and US Airways. Momentum Score: 'A' Zacks Rank: 2 P/E Multiple: 7.30 Price Change in the Past 4 Weeks : 16.29% EPS estimate revisions for the Current Year: 5.39% The Travelers Companies, Inc.TRV : Based in New York, the company is engaged in providing a range of commercial and personal property, and casualty insurance products and services to clients including businesses, government units, associations, and individuals in the Unites States and select international markets.
|
Here are the five stocks that met the criteria: American Airlines Group Inc.AAL : The company was formed following the December 2013 merger between AMR (American Airlines' parent group, which was founded in 1934) and US Airways. Click to get this free report TRAVELERS COS (TRV): Free Stock Analysis Report GENERAL MOTORS (GM): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report NORTHERN TIER (NTI): Free Stock Analysis Report To read this article on Zacks.com click here. The stock market continues to be plagued by headwinds, making it difficult for investors to sketch a profitable investment strategy.
|
8196.0
|
2015-11-02 00:00:00 UTC
|
American Airlines Group, Inc. (AAL) Ex-Dividend Date Scheduled for November 03, 2015
|
AAL
|
https://www.nasdaq.com/articles/american-airlines-group-inc-aal-ex-dividend-date-scheduled-november-03-2015-2015-11-02
|
nan
|
nan
|
American Airlines Group, Inc. ( AAL ) will begin trading ex-dividend on November 03, 2015. A cash dividend payment of $0.1 per share is scheduled to be paid on November 19, 2015. Shareholders who purchased AAL prior to the ex-dividend date are eligible for the cash dividend payment. This marks the 6th quarter that AAL has paid the same dividend. At the current stock price of $46.22, the dividend yield is .87%.
The previous trading day's last sale of AAL was $46.22, representing a -17.76% decrease from the 52 week high of $56.20 and a 35.54% increase over the 52 week low of $34.10.
AAL is a part of the Transportation sector, which includes companies such as FedEx Corporation ( FDX ) and Delta Air Lines, Inc. ( DAL ). AAL's current earnings per share, an indicator of a company's profitability, is $7.02. Zacks Investment Research reports AAL's forecasted earnings growth in 2015 as 57.5%, compared to an industry average of 12%.
For more information on the declaration, record and payment dates, visit the AAL Dividend History page. Our Dividend Calendar has the full list of stocks that have an ex-dividend today.
Interested in gaining exposure to AAL through an Exchange Traded Fund [ETF]?
The following ETF(s) have AAL as a top-10 holding:
PowerShares Dynamic Leisure & Entertainment Portfolio ( PEJ )
PowerShares DWA Consumer Cyclicals Momentum Portfolio ( PEZ )
SPDR S&P Transportation ETF ( XTN )
First Trust Industrials AlphaDEX ( FXR )
PowerShares Russell Midcap Pure Value Portfolio ( PXMV ).
The top-performing ETF of this group is PEJ with an increase of 6.13% over the last 100 days. It also has the highest percent weighting of AAL at 5.12%.
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.
|
Shareholders who purchased AAL prior to the ex-dividend date are eligible for the cash dividend payment. AAL is a part of the Transportation sector, which includes companies such as FedEx Corporation ( FDX ) and Delta Air Lines, Inc. ( DAL ). Zacks Investment Research reports AAL's forecasted earnings growth in 2015 as 57.5%, compared to an industry average of 12%.
|
AAL's current earnings per share, an indicator of a company's profitability, is $7.02. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. American Airlines Group, Inc. ( AAL ) will begin trading ex-dividend on November 03, 2015.
|
Shareholders who purchased AAL 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 AAL Dividend History page. The following ETF(s) have AAL as a top-10 holding: PowerShares Dynamic Leisure & Entertainment Portfolio ( PEJ ) PowerShares DWA Consumer Cyclicals Momentum Portfolio ( PEZ ) SPDR S&P Transportation ETF ( XTN ) First Trust Industrials AlphaDEX ( FXR ) PowerShares Russell Midcap Pure Value Portfolio ( PXMV ).
|
AAL's current earnings per share, an indicator of a company's profitability, is $7.02. American Airlines Group, Inc. ( AAL ) will begin trading ex-dividend on November 03, 2015. Shareholders who purchased AAL prior to the ex-dividend date are eligible for the cash dividend payment.
|
8197.0
|
2015-10-30 00:00:00 UTC
|
Ex-Dividend Reminder: Shenandoah Telecommunications, Xilinx and American Airlines Group
|
AAL
|
https://www.nasdaq.com/articles/ex-dividend-reminder-shenandoah-telecommunications-xilinx-and-american-airlines-group-2015
|
nan
|
nan
|
Looking at the universe of stocks we cover at Dividend Channel , on 11/3/15, Shenandoah Telecommunications Co. (Symbol: SHEN), Xilinx, Inc. (Symbol: XLNX), and American Airlines Group Inc (Symbol: AAL) will all trade ex-dividend for their respective upcoming dividends. Shenandoah Telecommunications Co. will pay its annual dividend of $0.48 on 12/1/15, Xilinx, Inc. will pay its quarterly dividend of $0.31 on 11/24/15, and American Airlines Group Inc will pay its quarterly dividend of $0.10 on 11/19/15. As a percentage of SHEN's recent stock price of $47.59, this dividend works out to approximately 1.01%, so look for shares of Shenandoah Telecommunications Co. to trade 1.01% lower - all else being equal - when SHEN shares open for trading on 11/3/15. Similarly, investors should look for XLNX to open 0.64% lower in price and for AAL to open 0.22% lower, all else being equal.
Below are dividend history charts for SHEN, XLNX, and AAL, showing historical dividends prior to the most recent ones declared.
Shenandoah Telecommunications Co. (Symbol: SHEN) :
Xilinx, Inc. (Symbol: XLNX) :
American Airlines Group Inc (Symbol: AAL) :
In general, dividends are not always predictable, following the ups and downs of company profits over time. Therefore, a good first due diligence step in forming an expectation of annual yield going forward, is looking at the history above, for a sense of stability over time. This can help in judging whether the most recent dividends from these companies are likely to continue. If they do continue, the current estimated yields on annualized basis would be 1.01% for Shenandoah Telecommunications Co., 2.57% for Xilinx, Inc., and 0.87% for American Airlines Group Inc.
In Friday trading, Shenandoah Telecommunications Co. shares are currently up about 2.8%, Xilinx, Inc. shares are up about 0.6%, and American Airlines Group Inc shares are up about 0.7% on the day.
Click here to learn which 25 S.A.F.E. dividend stocks should be on your radar screen »
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.
|
Looking at the universe of stocks we cover at Dividend Channel , on 11/3/15, Shenandoah Telecommunications Co. (Symbol: SHEN), Xilinx, Inc. (Symbol: XLNX), and American Airlines Group Inc (Symbol: AAL) will all trade ex-dividend for their respective upcoming dividends. Similarly, investors should look for XLNX to open 0.64% lower in price and for AAL to open 0.22% lower, all else being equal. Below are dividend history charts for SHEN, XLNX, and AAL, showing historical dividends prior to the most recent ones declared.
|
Looking at the universe of stocks we cover at Dividend Channel , on 11/3/15, Shenandoah Telecommunications Co. (Symbol: SHEN), Xilinx, Inc. (Symbol: XLNX), and American Airlines Group Inc (Symbol: AAL) will all trade ex-dividend for their respective upcoming dividends. Shenandoah Telecommunications Co. (Symbol: SHEN) : Xilinx, Inc. (Symbol: XLNX) : American Airlines Group Inc (Symbol: AAL) : In general, dividends are not always predictable, following the ups and downs of company profits over time. Similarly, investors should look for XLNX to open 0.64% lower in price and for AAL to open 0.22% lower, all else being equal.
|
Looking at the universe of stocks we cover at Dividend Channel , on 11/3/15, Shenandoah Telecommunications Co. (Symbol: SHEN), Xilinx, Inc. (Symbol: XLNX), and American Airlines Group Inc (Symbol: AAL) will all trade ex-dividend for their respective upcoming dividends. Shenandoah Telecommunications Co. (Symbol: SHEN) : Xilinx, Inc. (Symbol: XLNX) : American Airlines Group Inc (Symbol: AAL) : In general, dividends are not always predictable, following the ups and downs of company profits over time. Similarly, investors should look for XLNX to open 0.64% lower in price and for AAL to open 0.22% lower, all else being equal.
|
Looking at the universe of stocks we cover at Dividend Channel , on 11/3/15, Shenandoah Telecommunications Co. (Symbol: SHEN), Xilinx, Inc. (Symbol: XLNX), and American Airlines Group Inc (Symbol: AAL) will all trade ex-dividend for their respective upcoming dividends. Similarly, investors should look for XLNX to open 0.64% lower in price and for AAL to open 0.22% lower, all else being equal. Below are dividend history charts for SHEN, XLNX, and AAL, showing historical dividends prior to the most recent ones declared.
|
8198.0
|
2015-10-30 00:00:00 UTC
|
5 Things American Airlines Group, Inc. Wants You to Know
|
AAL
|
https://www.nasdaq.com/articles/5-things-american-airlines-group-inc-wants-you-know-2015-10-30
|
nan
|
nan
|
American Airlines reported a record quarterly profit on October 23, with adjusted EPS up 67% year over year to $2.77. Yet after the stock rose in early trading that day, it gave up all of its gains during the subsequentearnings call
American Airlines is earning record profits, but investors are still worried. Image source: American Airlines.
During theearnings call American's management team, for the second straight quarter, gave a very frank assessment of the competitive environment. This was the primary cause of investors' dismay. The big picture takeaway was that the carrier will continue to compete aggressively against discounters like Spirit Airlines .
Let's take a look at five specific points that American Airlines executives emphasized to see what this means in practice.
Air travel is a commodity to many
One of the most important points made during theearnings callwas that American Airlines has to treat its "Main Cabin" section as a commodity product. While the company makes a lot of money from loyal, high-fare customers, most of the people in the back of the plane are just looking for the cheapest fare.
Indeed, more than half of American's revenue comes from customers who fly the airline no more than once a year. American Airlines executives feel that if they don't match cheap fares from Spirit Airlines -- or anybody else, for that matter -- they won't capture these customers. This is too big a percentage of American's revenue for the company to walk away from this business.
Spirit is small, but disruptive
Some analysts suggested that American Airlines could simply ignore Spirit, which has a little more than $2 billion in annual revenue, compared to more than $40 billion for American.
However, Spirit's small revenue base is deceptive. Unlike most airlines, Spirit operates one flight per day on most of its routes. So while it has far fewer flights than American Airlines, those flights are spread across many routes. And with one daily flight on a route, it can impact demand and pricing for the 10 daily flights that American might operate on that same route.
Spirit Airlines has a big impact on industry pricing despite its small size. Image source: Spirit Airlines.
Counterintuitively, American Airlines actually has more routes overlapping with Spirit than with either of its big legacy carrier peers. That makes it all the more necessary to match Spirit's fares.
Price-matching can be refined, though
While American Airlines believes that it's necessary to match Spirit Airlines' fares to avoid losing customers in droves, it wants to minimize the impact of that strategy on its unit revenue. In 2016, it plans to introduce a new, separate fare type that is custom-designed for competing with ultra-low cost carriers.
The company didn't provide any details on what that would look like. However, Delta Air Lines has adopted a similar strategy in recent years with its "Basic Economy" fares. Delta offers these cheaper fares in markets where it competes with Spirit and other ULCCs. Unlike a typical coach fare, Basic Economy tickets don't include assigned seats (so you'll probably get stuck in a middle seat) and lack flexibility for flight changes or upgrades.
Delta has successfully rolled out "Spirit-match" fares on many routes.
These "Spirit-match" fares allow Delta to keep price-sensitive customers in the fold. However, due to the onerous restrictions, 65% of customers presented with a "Basic Economy" fare choose to pay more for a fare that includes seat assignments, bolstering Delta's unit revenue. American Airlines will try to achieve the same effect with its new fare type.
Back to basics
American Airlines doesn't have to wait for the rollout of this new ULCC-match fare type to start improving its results. President Scott Kirby noted that the carrier has also been held back this year by its focus on planning for a smooth reservation systems integration.
That process was successfully completed in mid-October. As a result, American's revenue managers can now devote their full attention to optimizing pricing. That may allow the carrier to reduce the impact that its price-matching policy is having on unit revenue.
Management is bullish
American Airlines executives have previously projected that unit revenue could return to growth in the second half of 2016, but for now the downward trajectory remains firmly entrenched. To some extent, investors have to trust that the company's leaders are right.
American Airlines' management certainly sounds confident in its assessment of the competitive environment. CEO Doug Parker touted American's $1.56 billion in share repurchases during Q3, which enabled it to retire nearly 6% of its stock.
The company's board also authorized its third $2 billion share repurchase program of the year, with all buybacks to be completed by the end of 2016. If American succeeds in maintaining a high profit margin despite competing aggressively with the likes of Spirit Airlines, these buybacks will add a lot of value for shareholders, due to American Airlines' bargain valuation.
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 5 Things American Airlines Group, Inc. Wants You to Know originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of Spirit Airlines and United Continental. He is also long November 2015 $40 calls on American Airlines Group, long March 2016 $40 calls on Spirit Airlines, long June 2016 $30 calls on Spirit Airlines, and long January 2017 $40 calls on Delta Air Lines, 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 - 2015 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 after the stock rose in early trading that day, it gave up all of its gains during the subsequentearnings call American Airlines is earning record profits, but investors are still worried. President Scott Kirby noted that the carrier has also been held back this year by its focus on planning for a smooth reservation systems integration. Management is bullish American Airlines executives have previously projected that unit revenue could return to growth in the second half of 2016, but for now the downward trajectory remains firmly entrenched.
|
Unlike a typical coach fare, Basic Economy tickets don't include assigned seats (so you'll probably get stuck in a middle seat) and lack flexibility for flight changes or upgrades. However, due to the onerous restrictions, 65% of customers presented with a "Basic Economy" fare choose to pay more for a fare that includes seat assignments, bolstering Delta's unit revenue. He is also long November 2015 $40 calls on American Airlines Group, long March 2016 $40 calls on Spirit Airlines, long June 2016 $30 calls on Spirit Airlines, and long January 2017 $40 calls on Delta Air Lines, The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
American Airlines executives feel that if they don't match cheap fares from Spirit Airlines -- or anybody else, for that matter -- they won't capture these customers. Price-matching can be refined, though While American Airlines believes that it's necessary to match Spirit Airlines' fares to avoid losing customers in droves, it wants to minimize the impact of that strategy on its unit revenue. He is also long November 2015 $40 calls on American Airlines Group, long March 2016 $40 calls on Spirit Airlines, long June 2016 $30 calls on Spirit Airlines, and long January 2017 $40 calls on Delta Air Lines, The Motley Fool is long January 2017 $35 calls on American Airlines Group.
|
Unlike most airlines, Spirit operates one flight per day on most of its routes. Spirit Airlines has a big impact on industry pricing despite its small size. Delta has successfully rolled out "Spirit-match" fares on many routes.
|
8199.0
|
2015-10-29 00:00:00 UTC
|
The Zacks Analyst Blog Highlights: American Airlines Group, JetBlue Airways, Alaska Air Group, Southwest Airlines and United Continental Holdings
|
AAL
|
https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-american-airlines-group-jetblue-airways-alaska-air-0
|
nan
|
nan
|
For Immediate Release
Chicago, IL - October 29, 2015 - 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 American Airlines Group ( AAL ), JetBlue Airways Corporation ( JBLU ), Alaska Air Group, Inc. ( ALK ), Southwest Airlines Co. ( LUV ) 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: Q3 Earnings Shine
It was all about earnings last week with several companies in the airline space reporting their third-quarter 2015 results. As has been the case over the last couple of quarters, low fuel costs aided the bottom lines of most carriers in the space.
Sector heavyweights like American Airlines Group ( AAL ), JetBlue Airways Corporation ( JBLU ), Alaska Air Group, Inc. ( ALK ), Southwest Airlines Co. ( LUV ) and United Continental Holdings ( UAL ), all reported better-than-expected earnings benefiting from weak oil prices . American Airlines Group also made news when it announced on its third quarter conference call that it intends to offer low-priced air tickets, starting next year, in order to compete effectively with successful low-cost carriers.
On the price front, the NYSE ARCA Airline index climbed 2% to $91.97 over the last 5 trading days with oil prices remaining weak.
(Read the last Airline Stock Roundup here ).
Recap of the Past Week's Most Important Stories
1. American Airlines Group's third quarter adjusted earnings per share of $2.77 beat the Zacks Consensus Estimate by 5 cents. Total operating expenses declined 11.9% to $8.7 billion on the back of a 43.5% reduction in fuel costs. Revenues were short of the Zacks Consensus Estimate and 3.9% lower than the year-ago figure (read more: American Airlines Tops Q3 Earnings on Lower Fuel Costs ).
The earnings beat was, however, overshadowed by the worries expressed by American Airlines in the face of the growth of low-cost carriers. The carrier revealed certain statistics on the call to back its claim (read more: American Airlines to Engage in Price War with Low-Cost Rivals ).
2. United Continental Holdings posted adjusted earnings of $4.53 per share in the third quarter of 2015, beating the Zacks Consensus Estimate of $4.49. Earnings were also up substantially on a year-over-year basis. The bottom line was aided by low fuel costs. Consolidated passenger revenue per available seat mile (PRASM) declined 5.8% (read more: United Continental Beats Q3 Earnings, PRASM Woes Stay ).
3. Southwest Airlines reported third quarter earnings of 94 cents per share, surpassing the Zacks Consensus Estimate by 2 cents. Quarterly revenues moved up 2% year over year to $5,318 million, steering past the Zacks Consensus Estimate of $5,102 million (read more: Southwest Airlines Beats on Q3 Earnings, Revenues ).
4. Alaska Air Group reported third-quarter 2015 earnings per share of $2.16, which surpassed the Zacks Consensus Estimate of $2.08 and also increased 47% year over year. Fuel price (economic) stood at $1.81 per gallon, down from $3.15 in the year-ago quarter (read more: Alaska Air Group Beats on Q3 Earnings and Revenues ).
5. JetBlue Airways' third quarter earnings on an adjusted basis came in at 58 cents per share beating the Zacks Consensus Estimate by a penny. Total operating revenue climbed 10.4% year over year to $1,687 million, surpassing the Zacks Consensus Estimate of $1,682 million. Yield per passenger mile moved up 0.5% year over year in the reported quarter.
PRASM, however, fell 0.6%. Capacity is expected to increase in the band of 8.5% to 10.5% in the fourth quarter while for 2015, it is expected to grow in the band of 8.5% to 9.5%. The old guidance had hinted at a capacity expansion at the higher end of the 7% to 9% range for 2015. The increased capacity guidance for 2015 generated capacity related fears among investors, leading to the stock shedding value on Oct 27 despite the earnings beat. The PRASM decline in the third quarter was also responsible for the stock's decline.
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
ALASKA AIR GRP (ALK): Free Stock Analysis Report
SOUTHWEST AIR (LUV): 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 American Airlines Group ( AAL ), JetBlue Airways Corporation ( JBLU ), Alaska Air Group, Inc. ( ALK ), Southwest Airlines Co. ( LUV ) and United Continental Holdings ( UAL ). Sector heavyweights like American Airlines Group ( AAL ), JetBlue Airways Corporation ( JBLU ), Alaska Air Group, Inc. ( ALK ), Southwest Airlines Co. ( LUV ) and United Continental Holdings ( UAL ), all reported better-than-expected earnings benefiting from weak oil prices . Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report SOUTHWEST AIR (LUV): 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 American Airlines Group ( AAL ), JetBlue Airways Corporation ( JBLU ), Alaska Air Group, Inc. ( ALK ), Southwest Airlines Co. ( LUV ) and United Continental Holdings ( UAL ). Sector heavyweights like American Airlines Group ( AAL ), JetBlue Airways Corporation ( JBLU ), Alaska Air Group, Inc. ( ALK ), Southwest Airlines Co. ( LUV ) and United Continental Holdings ( UAL ), all reported better-than-expected earnings benefiting from weak oil prices . Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report SOUTHWEST AIR (LUV): 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 AMER AIRLINES (AAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report SOUTHWEST AIR (LUV): 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 American Airlines Group ( AAL ), JetBlue Airways Corporation ( JBLU ), Alaska Air Group, Inc. ( ALK ), Southwest Airlines Co. ( LUV ) and United Continental Holdings ( UAL ). Sector heavyweights like American Airlines Group ( AAL ), JetBlue Airways Corporation ( JBLU ), Alaska Air Group, Inc. ( ALK ), Southwest Airlines Co. ( LUV ) and United Continental Holdings ( UAL ), all reported better-than-expected earnings benefiting from weak oil prices .
|
Stocks recently featured in the blog include the American Airlines Group ( AAL ), JetBlue Airways Corporation ( JBLU ), Alaska Air Group, Inc. ( ALK ), Southwest Airlines Co. ( LUV ) and United Continental Holdings ( UAL ). Sector heavyweights like American Airlines Group ( AAL ), JetBlue Airways Corporation ( JBLU ), Alaska Air Group, Inc. ( ALK ), Southwest Airlines Co. ( LUV ) and United Continental Holdings ( UAL ), all reported better-than-expected earnings benefiting from weak oil prices . Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report To read this article on Zacks.com click here.
|
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.