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8200.0
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2015-10-28 00:00:00 UTC
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Airline Stock Roundup: Q3 Earnings Shine on Weak Oil Prices, American Airlines Wary of Budget Carriers
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AAL
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https://www.nasdaq.com/articles/airline-stock-roundup%3A-q3-earnings-shine-on-weak-oil-prices-american-airlines-wary-of
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nan
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nan
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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 like Spirit Airlines SAVE .
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.
Performance
The following table shows the price movement of the major airline players over the past week and during the last 6 months.
As seen in the chart above, most of the major airline stocks traded in the green over the past week. On the other hand, price movement in the last six months exhibited a mixed trend with Latin American carrier GOL Linhas declining the most in the period.
What's Next in the Airline Biz?
We expect third quarter earnings updates from the likes of Virgin America VA in the coming days. Moreover, October traffic updates from carriers like Alaska Air Group are also expected. Focus will also stay on the movement of oil prices given the volatile nature exhibited lately.
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SOUTHWEST AIR (LUV): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): 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
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.
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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 SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): 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 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 carrier revealed certain statistics on the call to back its claim (read more: American Airlines to Engage in Price War with Low-Cost Rivals ).
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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 SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): 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 ALASKA AIR GRP (ALK): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. 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 ).
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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 SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): 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 ALASKA AIR GRP (ALK): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. 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 ).
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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 SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): 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 ALASKA AIR GRP (ALK): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. 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 ).
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8201.0
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2015-10-27 00:00:00 UTC
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This Airline ETF Is Starting To Soar
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AAL
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https://www.nasdaq.com/articles/airline-etf-starting-soar-2015-10-27
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nan
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nan
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Transportation stocks have come under fire this year as worries over global consumer behavior have trumped the all-important advantage of lower oil prices. To confirm this point, the iShares Transportation Average ETF (IYT) is down over 8% in 2015 despite a strong October showing.
IYT has over $1 billion dedicated to a top heavy index of airline, trucking, and railroad companies. It represents some of the largest businesses in the world dedicated to the movement of goods and services around the globe.
While this sector as a whole has taken on a sluggish malaise, one sub-industry appears to be relishing the 30% decline in crude oil prices this year and there is an ETF to take advantage of it.
The U.S. Global Jets ETF (JETS) was launched in April 2015 and has taken flight in recent weeks as global stocks have rebounded. JETS represents the only fund of its kind dedicated to a diversified index of over 30 airline stocks. Top holdings include well-known names such as Southwest Airlines (LUV), American Airlines Group (AAL), and Delta Airlines Inc (DAL).
The underlying holdings of this fund are unique in that they don’t just focus on traditional airline operators, but have expanded the group to include manufacturers as well. Boeing Co (BA) and General Dynamics Corp (GD) are just two of the top airplane makers in the mix.
The JETS fact sheet touts a smart beta strategy that uses fundamental screens to filter out the most efficient stocks within the airline industry and then weights them based on specific size criteria. It also notes the net annual expense ratio for administering this fund is 0.60%.
JETS isn’t just a domestically focused strategy either. While 80% of the holdings are U.S.-based companies, the remaining 20% are spread throughout a variety of foreign and developed countries. Canada, Turkey, and the United Kingdom are the top three country allocations after the United States.
Since its debut, JETS has managed to gain nearly 4% in total return and the chart below shows the fund recently hitting new all-time highs. This strength has likely been driven behind continued signs of strong consumer demand in the airline industry alongside an accommodative energy market. By contrast, over the same period, IYT has fallen 3%.
In its first six months, JETS has managed to accumulate $47 million in total assets. This steady pace of growth is a positive sign for a niche industry-level ETF and has likely been helped along by its standalone advantage. The defunct Guggenheim Airline ETF was closed down in 2013 and now JETS is seeking to prosper where Guggenheim once failed.
Sometimes timing is everything. For example, the Pure Fund ISE Cyber Security ETF (HACK) is a recent success story of an ETF that came to market at a critical moment in industry exposure and was able to amass over $1 billion in assets as a result. JETS may have its sights set on a similar growth trajectory, albeit with quite a bit of work still to do.
Implementing Airlines In Your Portfolio
It’s important to remember that despite its diversified portfolio, a fund such as JETS may be more susceptible to volatility driven by its focused nature and cyclical holdings. Investors may opt to use this fund as a smaller tactical holding in over to overweight a portion of their portfolio towards the airline theme. In addition, the transparent makeup of the ETF makes it an easy way to access this industry without having to choose individual stocks that may lead to hit-or-miss results.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Top holdings include well-known names such as Southwest Airlines (LUV), American Airlines Group (AAL), and Delta Airlines Inc (DAL). Transportation stocks have come under fire this year as worries over global consumer behavior have trumped the all-important advantage of lower oil prices. The JETS fact sheet touts a smart beta strategy that uses fundamental screens to filter out the most efficient stocks within the airline industry and then weights them based on specific size criteria.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Top holdings include well-known names such as Southwest Airlines (LUV), American Airlines Group (AAL), and Delta Airlines Inc (DAL). Global Jets ETF (JETS) was launched in April 2015 and has taken flight in recent weeks as global stocks have rebounded.
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Top holdings include well-known names such as Southwest Airlines (LUV), American Airlines Group (AAL), and Delta Airlines Inc (DAL). JETS represents the only fund of its kind dedicated to a diversified index of over 30 airline stocks. Implementing Airlines In Your Portfolio It’s important to remember that despite its diversified portfolio, a fund such as JETS may be more susceptible to volatility driven by its focused nature and cyclical holdings.
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Top holdings include well-known names such as Southwest Airlines (LUV), American Airlines Group (AAL), and Delta Airlines Inc (DAL). IYT has over $1 billion dedicated to a top heavy index of airline, trucking, and railroad companies. JETS represents the only fund of its kind dedicated to a diversified index of over 30 airline stocks.
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8202.0
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2015-10-26 00:00:00 UTC
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Highflier Airlines Earnings : Time for JETS ETF
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AAL
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https://www.nasdaq.com/articles/highflier-airlines-earnings-%3A-time-for-jets-etf-2015-10-26
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nan
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nan
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The airline stocks, which were flying low at the start of the year on a stronger dollar and global growth worries, skyrocketed lately on improving industry fundamentals. Higher margin, lower debt, surging ancillary revenues from hotel accommodation, car rentals, onboard food, limited capacity growth and a host of modifications in operations helped the sector to gain altitude.
As a result, the pure-play aviation ETF U.S. Global Jets ETF (JETS), which has added just 4.5% so far this year, advanced about 5.8% in the last one month (as of October 22, 2015). In any case, cheap fuel has been a bonus for long. The swelling middle-income population in emerging markets is benefitting worldwide customer growth. Now, solid earnings results from top-notch companies are an icing on the cake (read: 6 Reasons Why JETS ETF Could Fly Higher ).
The sector is in the top 16% category of the Zacks Industry Rank at the time of writing, giving strong indications of the upcoming flight of the entire industry. Let's take a look at some of the key third-quarter 2015 earnings in the sector:
On October 14, Delta Air Lines ( DAL ) beat on earnings but missed on revenues. The top line was hurt by adverse foreign currency movements. In Q2 itself, Delta had planned to slash its international capacity by 3.5% in the fourth quarter of 2015 to lessen the unfavorable impact of foreign exchange on its international operations.
Third-quarter adjusted earnings of $1.74 per share steered past the Zacks Consensus Estimate by 3 cents and improved 45% from the year-ago figure. Revenues dipped 0.6% year over year to $11.11 billion in the reported quarter, falling short of the Zacks Consensus Estimate of $11.12 billion.
Delta expects volatile fuel prices going ahead. The estimated fuel price, including taxes and hedges, is expected in the range of $1.75 to $1.80 per gallon for the final quarter; the high end being in line with the average fuel price in Q3. The average price is even lower than what Delta had earlier expected for the second half of 2015 i.e.; in the band of $1.90 to $2.00 per gallon.
This Zacks ETF Rank #2 (Buy) stock has a Zacks Momentum & Value style score of 'A' and a Growth score of 'B'. Shares advanced about 4% in the last five trading sessions (as of October 22, 2015).
United Continental Holdings Inc. ( UAL ) came up with mixed Q3 results with an earnings beat and a revenue miss. Earnings were up about 65% year over year on lower fuel costs and reduced operating expenses. Revenues declined 2.4% on lower passenger revenues. Cargo revenues were down 0.8% while other revenues improved 9.8% in the third quarter. Its indicators are also promising with a Zacks ETF Rank #2, and Growth, Value and Momentum scores of 'A'. Shares were up about 2.8% in the key trading session of October 22, post earnings.
Yet another leading U.S. carrier Southwest Airlines Co.'s ( LUV ) third-quarter 2015 earnings and revenues outpaced the respective Zacks Consensus Estimate. Revenues grew 2% year over year helped by 3.3% and 102.1% expansion in Passenger and Other revenues, respectively.
Airline traffic was up 8.9% while passenger load factor inched up to 85.4% from 84.4% recorded in the year-ago quarter. LUV, with a Zacks ETF Rank #2, also boasts hopeful indicators of Growth score of 'B' and Value and Momentum score of 'A'. Shares shot up over 7.4% to reflect the results on October 22.
On October 23, American Airlines Group ( AAL ) reached a milestone when it came up with the ' highest quarterly profit in the company's history'. This airline reported $2.77 per share of Q3 earnings breezing past the estimate of $2.72. Revenues came in at $10.71 billion, marginally short of the Zacks Consensus Estimate of $10.72 billion.
This is also a Zacks ETF Rank #2 stock and its investing metrics were even more upbeat with all Growth, Value and Momentum criteria having a top-notch score of 'A'. The company also bought back $1.56 billion of common stock.
Not only these heavy-weight stocks, sturdy performances also were put up by other sector players. Alaska Air Group, Inc.'s ( ALK ) Q3 2015 earnings per share of $2.16 beat the Zacks Consensus Estimate of $2.06 and improved 47% from the year-ago earnings.
Revenues grew 3% year over year and narrowly beat our estimate. This Zacks ETF Rank #2 stock can be a great pick for growth and value investors. ALK added 1.7% following earnings on October 22.
How to Play?
By now, one must have realized that the mood in the airlines industry is upbeat. So investors might play the trend via basket approach to tap the entire potential of the space. And to do so, what could be a better option other than JETS ETF (read: Inside the Flight of a New Airline ETF (JETS) )?
The $46 million-fund holds over 30 stocks in its portfolio and is concentrated on a few individual securities, as it allocates about 70% to the top 10 holdings. Southwest Airlines (12.94%), American Airlines (12.78%), Delta Airlines (12.34%), United Continental (11.31%) are the top four elements in the basket, with a combined share of about 45%. Alaska Air holds a seventh position in the fund with 3.51% weight.
The product charges 60 bps in fees. The fund added 3.5% in the last five trading sessions (as of October 22, 2015) which made the peak of airlines earnings releases (read:The 13 Best and Most Interesting ETFs to Launch in the First Half of 2015) .
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US GLOBAL JETS (JETS): ETF Research Reports
UNITED CONT HLD (UAL): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
SOUTHWEST AIR (LUV): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Get Free Report
To read this article on Zacks.com click here.
Zacks Investment Research
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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On October 23, American Airlines Group ( AAL ) reached a milestone when it came up with the ' highest quarterly profit in the company's history'. Click to get this free report US GLOBAL JETS (JETS): ETF Research Reports UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. The airline stocks, which were flying low at the start of the year on a stronger dollar and global growth worries, skyrocketed lately on improving industry fundamentals.
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Click to get this free report US GLOBAL JETS (JETS): ETF Research Reports UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. On October 23, American Airlines Group ( AAL ) reached a milestone when it came up with the ' highest quarterly profit in the company's history'. Let's take a look at some of the key third-quarter 2015 earnings in the sector: On October 14, Delta Air Lines ( DAL ) beat on earnings but missed on revenues.
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Click to get this free report US GLOBAL JETS (JETS): ETF Research Reports UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. On October 23, American Airlines Group ( AAL ) reached a milestone when it came up with the ' highest quarterly profit in the company's history'. Revenues dipped 0.6% year over year to $11.11 billion in the reported quarter, falling short of the Zacks Consensus Estimate of $11.12 billion.
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On October 23, American Airlines Group ( AAL ) reached a milestone when it came up with the ' highest quarterly profit in the company's history'. Click to get this free report US GLOBAL JETS (JETS): ETF Research Reports UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. United Continental Holdings Inc. ( UAL ) came up with mixed Q3 results with an earnings beat and a revenue miss.
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8203.0
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2015-10-26 00:00:00 UTC
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American Airlines to Engage in Price War with Low-Cost Rivals
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AAL
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https://www.nasdaq.com/articles/american-airlines-to-engage-in-price-war-with-low-cost-rivals-2015-10-26
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nan
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nan
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American Airlines Group Inc.AAL has stated that it intends to offer exclusive low-priced air tickets, starting next year. We believe the rapid growth and popularity of low-cost carriers like Spirit Airlines, Inc. SAVE and Southwest Airlines Co. LUV over the past few years, prompted the Fort Worth, TX-based carrier to arrive at this new strategy, in a desperate bid to combat competitive threat from low-cost rivals. The carrier revealed certain statistics on its third quarter conference call to back its claim about the burgeoning of low-cost carriers like Spirit Airlines and the consequent threat they pose to legacy airlines.
Price War Revelation Overshadows Q3 Earnings Beat
Weak oil prices are benefiting carriers immensely. This is because fuel costs account for a major chunk of an airline's operating expenses. American Airlines is no exception and is thus reaping huge benefits from the steep fall in fuel expenses.
As was the case in the last few quarters, American Airlines reported higher-than-expected earnings in the third quarter of 2015 as well, riding primarily on weak fuel costs. The company recorded adjusted earnings per share of $2.77, beating 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. The carrier's average fuel price (mainline) inclusive of taxes came in at $1.67 per gallon in the third quarter of 2015 compared with $2.97 per gallon in the year-ago period. Naturally, the fall in oil prices has resulted in massive savings for the carrier, which does not hedge fuel costs. The carrier expects savings to the tune of approximately $5 billion due to soft fuel costs.
However, the worries expressed by American Airlines in the face of the growth of low-cost carriers have taken much of the sheen away from the carrier's eighth successive earnings beat. This latest source of worry was the main culprit behind the stock losing nearly 1% (to reach $45.67) on Oct 23, despite the earnings beat.
Alarming Statistics
American Airlines' president, J. Scott Kirby, stated on the third-quarter conference call that of the total number of fliers last year, a whopping 87% flew with the carrier just once. These infrequent fliers account for half of the carrier's revenues, Kirby unveiled. The growth of low-cost carriers has reinstated the belief that this population predominantly chooses its airline based on ticket prices, and that air travel for them "is largely a commodity".
Kirby revealed further statistics to back his claim about the growth of discount carriers. For example, Spirit Airlines served only three markets out of Dallas in 2011 when American Airlines filed for bankruptcy. According to the data unveiled by Kirby, the discount carrier currently operates in excess of 50 daily flights in 25 markets, commanding 20% market share therein. Spirit Airlines' phenomenal growth in Dallas has resulted in it commanding higher market share there compared to legacy carriers like Delta Air Lines, Inc. DAL and United Continental Holdings, Inc. UAL . Kirby said that due to its phenomenal growth, Spirit Airlines is currently American Airlines' second most vigorous competitor at the Dallas/Fort Worth International Airport.
Apart from Dallas, Spirit Airlines' growth story in Chicago also rings alarm bells for American Airlines where the former has outgrown Delta Air Lines and is currently the third strongest competitor for American Airlines. Currently, Spirit Airlines serves 24 markets in Chicago, operating in excess of 60 daily non-stop flights. No doubt, that the success of such low-cost carriers at two of American Airlines' prominent hubs has raised concerns for the latter.
The degree of overlap between American Airlines' flights and those of low-cost carriers like Spirit Airlines and Frontier Airlines has also grown significantly over the recent past. Kirby stated that the degree of domestic overlap with Spirit Airlines, which carries local passengers, exceeds the same with legacy carriers such as Delta Air Lines and United Continental.
Kirby unveiled that 28% of American Airlines' available seat miles (on the domestic front) encounter non-stop competition from Spirit Airlines. We note that an airline's capacity is measured by available seat miles. Mexico-based low cost carrier Controladora Vuela Compania de Aviacion, S.A.B. de C.V. or Volaris VLRS also provides competition to American Airlines on select international routes.
With a significant portion of its revenues coming from fliers who rarely choose American Airlines and seem to prefer low-cost carriers instead, it is no surprise that American Airlines is now considering the popular 'pocket-friendly' route to success. Hence its decision to offer cheaper air tickets (with less frills), from 2016, on routes where it competes against low-cost carriers operating nonstop flights. American Airlines also stated that it intends to revise its AAdvantage frequent-flier scheme in 2016.
American Airlines is not the first legacy carrier to be worried about the threat from low-cost rivals. Delta Air Lines already offers inexpensive "Basic Economy" tickets to its customers.
Conclusion
With people increasingly becoming price conscious and low-cost carriers gaining prominence by the day, we won't be surprised if we hear more such strategies coming from legacy carriers such as United Continental, in the coming days. Stay tuned for further updates on this pressing issue.
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AMER AIRLINES (AAL): Free Stock Analysis Report
SOUTHWEST AIR (LUV): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
SPIRIT AIRLINES (SAVE): Free Stock Analysis Report
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.
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American Airlines Group Inc.AAL has stated that it intends to offer exclusive low-priced air tickets, starting next year. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report CONTROLADORA VL (VLRS): Free Stock Analysis Report To read this article on Zacks.com click here. Alarming Statistics American Airlines' president, J. Scott Kirby, stated on the third-quarter conference call that of the total number of fliers last year, a whopping 87% flew with the carrier just once.
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Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report CONTROLADORA VL (VLRS): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc.AAL has stated that it intends to offer exclusive low-priced air tickets, starting next year. According to the data unveiled by Kirby, the discount carrier currently operates in excess of 50 daily flights in 25 markets, commanding 20% market share therein.
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Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report CONTROLADORA VL (VLRS): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc.AAL has stated that it intends to offer exclusive low-priced air tickets, starting next year. Apart from Dallas, Spirit Airlines' growth story in Chicago also rings alarm bells for American Airlines where the former has outgrown Delta Air Lines and is currently the third strongest competitor for American Airlines.
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American Airlines Group Inc.AAL has stated that it intends to offer exclusive low-priced air tickets, starting next year. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report CONTROLADORA VL (VLRS): Free Stock Analysis Report To read this article on Zacks.com click here. This latest source of worry was the main culprit behind the stock losing nearly 1% (to reach $45.67) on Oct 23, despite the earnings beat.
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8204.0
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2015-10-23 00:00:00 UTC
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American Airlines Tops Q3 Earnings on Lower Fuel Costs
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AAL
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https://www.nasdaq.com/articles/american-airlines-tops-q3-earnings-on-lower-fuel-costs-2015-10-23
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nan
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nan
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American Airlines Group Inc.AAL reported higher-than-expected earnings in the third quarter of 2015. The company recorded adjusted earnings per share of $2.77, beating the Zacks Consensus Estimate by 5 cents. The earnings beat pleased the investors, resulting in shares of the company gaining value in pre-market trading .
American Airlines Group Inc. - Earnings Surprise | FindTheBest
American Airlines Group reported operating revenues of $10.71 billion in the third quarter, representing a 3.9% decrease over the comparable figure in the year-ago period. Quarterly revenues were marginally short of the Zacks Consensus Estimate of $10.72 billion.
Consolidated passenger revenue per available seat mile (PRASM) declined 6.8% to 13.16 cents in the reported quarter. Consolidated passenger yield declined 9.2% to 15.37 cents. Traffic grew 5.6% on a 2.9% capacity expansion. Consolidated load factor (% of seats filled by passengers) naturally improved as traffic growth outpaced capacity expansion. Load factor climbed to 85.6% from the comparable year-ago figure of 83.4%.
American Airlines' results in the reported quarter benefited from low fuel costs. This is because fuel costs account for a major chunk of an airline's operating expenses. Total operating expenses declined 11.9% to $8.7 billion on the back of a 43.5% reduction in fuel costs.
Backed by a strong quarterly performance, the company looks to return more to shareholders through dividends and share repurchases. During the third quarter, the company bought back 38.4 million shares for $1.56 billion. Moreover, the board of directors authorized an additional $2 billion share buyback program which is expected to be completed by Dec 31, 2016. We are impressed by the company's efforts to reward shareholders consistently through stock repurchases and dividend payments.
Update on Integration Process
American Airlines Group, formed following the Dec 2013 merger between AMR (American Airlines' parent group, founded in 1934) and US Airways, announced that effective Oct 17, there is now a single website and reservations system for all flights operating under the American Airlines brand name).
Upcoming Release
JetBlue Airways JBLU will release its third quarter earnings numbers on Oct 27, 2015.
Zacks Rank
Currently, American Airlines Group has a Zacks Rank #2 (Buy). Investors interested in the airline space may also consider stocks like Ryanair Holdings RYAAY and Virgin America VA , both of which sport a Zacks Rank #1 (Strong Buy).
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AMER AIRLINES (AAL): Free Stock Analysis Report
RYANAIR HLDGS (RYAAY): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): 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.
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American Airlines Group Inc.AAL reported higher-than-expected earnings in the third quarter of 2015. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report RYANAIR HLDGS (RYAAY): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. Consolidated load factor (% of seats filled by passengers) naturally improved as traffic growth outpaced capacity expansion.
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Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report RYANAIR HLDGS (RYAAY): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report VIRGIN AMERICA (VA): 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. American Airlines Group Inc. - Earnings Surprise | FindTheBest American Airlines Group reported operating revenues of $10.71 billion in the third quarter, representing a 3.9% decrease over the comparable figure in the year-ago period.
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Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report RYANAIR HLDGS (RYAAY): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report VIRGIN AMERICA (VA): 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. American Airlines Group Inc. - Earnings Surprise | FindTheBest American Airlines Group reported operating revenues of $10.71 billion in the third quarter, representing a 3.9% decrease over the comparable figure in the year-ago period.
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American Airlines Group Inc.AAL reported higher-than-expected earnings in the third quarter of 2015. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report RYANAIR HLDGS (RYAAY): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. During the third quarter, the company bought back 38.4 million shares for $1.56 billion.
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8205.0
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2015-10-23 00:00:00 UTC
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American Airlines Group, Inc. Earnings: An 8th Straight Record Profit
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AAL
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https://www.nasdaq.com/articles/american-airlines-group-inc-earnings-8th-straight-record-profit-2015-10-23
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nan
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nan
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On Friday, American Airlines became the latest airline to report a record Q3 profit. A big drop in unit revenue couldn't keep American's earnings down, as it capitalized on the stunning collapse of oil prices since mid-2014. Let's take a closer look.
The earnings breakdown
Revenue at American Airlines fell 3.9% year over year last quarter to $10.71 billion, roughly in line with the average analyst estimate. A 2.9% increase in capacity was offset by a 6.8% decline in passenger revenue per available seat mile (PRASM), driven by falling ticket prices.
The PRASM declines were widespread across American's route network. It recorded double-digit PRASM declines in the Pacific and Latin America regions and mid-single digit declines in the Atlantic and domestic regions.
Airfares were down across American's route network last quarter. Photo: American Airlines
That stands in contrast to competitors like United Continental where domestic routes significantly outperformed international routes . While United's international PRASM fell 9.3% year over year in Q3, its domestic PRASM declined less than 2%. American's weak domestic PRASM has a lot to do with soaring competition in Dallas, its biggest hub market.
Fortunately, the revenue declines were more than offset by a sharp drop in American's fuel costs. The average price it paid for a gallon of jet fuel plummeted 44% year over year, from $2.98/gallon to $1.67/gallon. Fuel efficiency also improved by about 2%. Non-fuel unit costs rose by a relatively manageable 2.6% from the prior-year quarter.
Adding everything up, adjusted pre-tax income rose 55% year over year to $1.9 billion as the company's pre-tax margin expanded from 11% to 17.7%. Adjusted earnings per share soared 67% to $2.77, compared to an average analyst estimate of $2.72.
Returning even more cash to shareholders
On Friday, American Airlines also announced the third increase of the year to its share buyback program. After announcing a $2 billion share buyback program in January and doubling it to $4 billion in July, American Airlines has added another $2 billion to its repurchase authorization. That brings it to $6 billion or nearly 20% of the company's market cap.
So far, the company has been making quick work of its share repurchase authority. With the stock trading at less than five times pre-tax earnings for much of 2015, American Airlines spent $943 million on buybacks in the first half of the year and a stunning $1.56 billion last quarter .
These buybacks have significantly boosted the company's EPS growth. If American's share count had remained flat year over year last quarter -- instead it declined 7.4% -- EPS would have been $0.21 lower at $2.56.
American Airlines plans to complete the remaining $3.5 billion of share buybacks by the end of 2016. It certainly has plenty of cash to spare. American ended the third quarter with $9.6 billion in cash and investments. Even excluding restricted cash and money that is stuck in Venezuela, the company has $8.3 billion lying around.
American Airlines executives have previously stated that they planned to hold onto more cash during the integration process as a "just in case" measure. For example, United Continental -- which is roughly comparable to American Airlines in size -- ended Q3 with $5.6 billion of cash and investments.
However, American Airlines completed the biggest and most dangerous part of its integration process last week with no fiascos . That means it may be ready to draw down its cash balance to complete its buyback program in the next few quarters.
Looking ahead
American Airlines expects to continue posting strong earnings growth in the fourth quarter despite ongoing revenue pressure. PRASM is projected to decline 5%-7% in Q4, which implies only modest sequential improvements. Nevertheless, American's pre-tax margin should reach 12%-14% during the quarter, compared to 10.6% a year earlier.
The ongoing steep declines in unit revenue are clearly worrisome to many investors. However, the revenue picture will probably start improving next year. Moreover, American's management and board still appear to be extremely confident about the company's earnings power, based on the rapid pace of share buybacks. That could be enough to keep the stock on an upward path.
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The article American Airlines Group, Inc. Earnings: An 8th Straight Record Profit 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. 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.
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With the stock trading at less than five times pre-tax earnings for much of 2015, American Airlines spent $943 million on buybacks in the first half of the year and a stunning $1.56 billion last quarter . Looking ahead American Airlines expects to continue posting strong earnings growth in the fourth quarter despite ongoing revenue pressure. Moreover, American's management and board still appear to be extremely confident about the company's earnings power, based on the rapid pace of share buybacks.
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The earnings breakdown Revenue at American Airlines fell 3.9% year over year last quarter to $10.71 billion, roughly in line with the average analyst estimate. While United's international PRASM fell 9.3% year over year in Q3, its domestic PRASM declined less than 2%. The Motley Fool is long January 2017 $35 calls on American Airlines Group.
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The earnings breakdown Revenue at American Airlines fell 3.9% year over year last quarter to $10.71 billion, roughly in line with the average analyst estimate. After announcing a $2 billion share buyback program in January and doubling it to $4 billion in July, American Airlines has added another $2 billion to its repurchase authorization. With the stock trading at less than five times pre-tax earnings for much of 2015, American Airlines spent $943 million on buybacks in the first half of the year and a stunning $1.56 billion last quarter .
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While United's international PRASM fell 9.3% year over year in Q3, its domestic PRASM declined less than 2%. American Airlines plans to complete the remaining $3.5 billion of share buybacks by the end of 2016. American ended the third quarter with $9.6 billion in cash and investments.
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8206.0
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2015-10-23 00:00:00 UTC
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American Airlines (AAL) Shares March Higher, Can It Continue?
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AAL
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https://www.nasdaq.com/articles/american-airlines-aal-shares-march-higher-can-it-continue-2015-10-23
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nan
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nan
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As of late, it has definitely been a great time to be an investor in American Airlines Group Inc.AAL . The stock has moved higher by 14.3% in the past month, while it is also above its 20 Day SMA too. This combination of strong price performance and favorable technical, could suggest that the stock may be on the right path.
We certainly think that this might be the case, particularly if you consider AAL's recent earnings estimate revision activity. From this look, the company's future is quite favorable; as AAL has earned itself a Zacks Rank #2 (Buy), meaning that its recent run may continue for a bit longer, and that this isn't the top for the in-focus company.
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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.
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From this look, the company's future is quite favorable; as AAL has earned itself a Zacks Rank #2 (Buy), meaning that its recent run may continue for a bit longer, and that this isn't the top for the in-focus company. As of late, it has definitely been a great time to be an investor in American Airlines Group Inc.AAL . We certainly think that this might be the case, particularly if you consider AAL's recent earnings estimate revision activity.
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Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. As of late, it has definitely been a great time to be an investor in American Airlines Group Inc.AAL . We certainly think that this might be the case, particularly if you consider AAL's recent earnings estimate revision activity.
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From this look, the company's future is quite favorable; as AAL has earned itself a Zacks Rank #2 (Buy), meaning that its recent run may continue for a bit longer, and that this isn't the top for the in-focus company. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. As of late, it has definitely been a great time to be an investor in American Airlines Group Inc.AAL .
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As of late, it has definitely been a great time to be an investor in American Airlines Group Inc.AAL . We certainly think that this might be the case, particularly if you consider AAL's recent earnings estimate revision activity. From this look, the company's future is quite favorable; as AAL has earned itself a Zacks Rank #2 (Buy), meaning that its recent run may continue for a bit longer, and that this isn't the top for the in-focus company.
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8207.0
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2015-10-23 00:00:00 UTC
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American Airlines Group (AAL) Beats on Q3 Earnings
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AAL
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https://www.nasdaq.com/articles/american-airlines-group-aal-beats-on-q3-earnings-2015-10-23
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nan
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American Airlines GroupAAL came into existence following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways. The Fort Worth, Texas based company serves customers with more than 6,700 daily flights in more than 50 nations across the globe.
American Airlines Group has a healthy track record with respect to earnings. The company has delivered positive earnings surprises in each of the last four quarters, with an average beat of 1.36%.
Zacks Rank : Currently, American Airlines Group has a Zacks Rank #2 (Buy), but that could change following the company's earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
Earnings : American Airlines Group beat on earnings in the third quarter of 2015. Adjusted earnings per share came in at $2.77, beating the Zacks Consensus Estimate of $2.72.
Revenue : Revenues of $10.71 billion were 3.9% below the year-ago figure. Quarterly revenues were marginally short of the Zacks Consensus Estimate of $10.72 billion.
Key Stats : American Airlines Group's results in the quarter benefited from low fuel costs. This is because fuel costs account for a major chunk of an airline's operating expenses. During the quarter, the company bought back 38.4 million shares for $1.56 billion Moreover, the board of directors authorized an additional $2 billion share buyback program which is expected to be completed by Dec 31, 2016. We are impressed by the company's efforts to reward shareholders through stock repurchases and dividend payments.
Stock Price : The earnings beat pleased the investors. Shares of the company were up 3.24% in pre-market trading at the time of writing.
Check back later for our full write up on this American Airlines Group earnings report later!
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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.
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American Airlines GroupAAL came into existence following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The Fort Worth, Texas based company serves customers with more than 6,700 daily flights in more than 50 nations across the globe.
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American Airlines GroupAAL came into existence following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Rank : Currently, American Airlines Group has a Zacks Rank #2 (Buy), but that could change following the company's earnings report which was just released.
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American Airlines GroupAAL came into existence following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Rank : Currently, American Airlines Group has a Zacks Rank #2 (Buy), but that could change following the company's earnings report which was just released.
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American Airlines GroupAAL came into existence following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. We have highlighted some of the key stats from this just-revealed announcement below: Earnings : American Airlines Group beat on earnings in the third quarter of 2015.
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8208.0
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2015-10-22 00:00:00 UTC
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AAL Crosses Above Key Moving Average Level
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AAL
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https://www.nasdaq.com/articles/aal-crosses-above-key-moving-average-level-2015-10-22
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nan
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nan
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In trading on Thursday, shares of American Airlines Group Inc (Symbol: AAL) crossed above their 200 day moving average of $45.42, changing hands as high as $45.75 per share. American Airlines Group Inc shares are currently trading up about 2.7% on the day. The chart below shows the one year performance of AAL shares, versus its 200 day moving average:
Looking at the chart above, AAL's low point in its 52 week range is $34.10 per share, with $56.20 as the 52 week high point - that compares with a last trade of $45.63.
According to the ETF Finder at ETF Channel, AAL makes up 5.41% of the PowerShares Dynamic Leisure and Entertainment Portfolio ETF (Symbol: PEJ) which is trading up by about 1.5% on the day Thursday.
Click here to find out which 9 other stocks recently crossed above their 200 day moving average »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In trading on Thursday, shares of American Airlines Group Inc (Symbol: AAL) crossed above their 200 day moving average of $45.42, changing hands as high as $45.75 per share. The chart below shows the one year performance of AAL shares, versus its 200 day moving average: Looking at the chart above, AAL's low point in its 52 week range is $34.10 per share, with $56.20 as the 52 week high point - that compares with a last trade of $45.63. According to the ETF Finder at ETF Channel, AAL makes up 5.41% of the PowerShares Dynamic Leisure and Entertainment Portfolio ETF (Symbol: PEJ) which is trading up by about 1.5% on the day Thursday.
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In trading on Thursday, shares of American Airlines Group Inc (Symbol: AAL) crossed above their 200 day moving average of $45.42, changing hands as high as $45.75 per share. The chart below shows the one year performance of AAL shares, versus its 200 day moving average: Looking at the chart above, AAL's low point in its 52 week range is $34.10 per share, with $56.20 as the 52 week high point - that compares with a last trade of $45.63. According to the ETF Finder at ETF Channel, AAL makes up 5.41% of the PowerShares Dynamic Leisure and Entertainment Portfolio ETF (Symbol: PEJ) which is trading up by about 1.5% on the day Thursday.
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In trading on Thursday, shares of American Airlines Group Inc (Symbol: AAL) crossed above their 200 day moving average of $45.42, changing hands as high as $45.75 per share. The chart below shows the one year performance of AAL shares, versus its 200 day moving average: Looking at the chart above, AAL's low point in its 52 week range is $34.10 per share, with $56.20 as the 52 week high point - that compares with a last trade of $45.63. According to the ETF Finder at ETF Channel, AAL makes up 5.41% of the PowerShares Dynamic Leisure and Entertainment Portfolio ETF (Symbol: PEJ) which is trading up by about 1.5% on the day Thursday.
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In trading on Thursday, shares of American Airlines Group Inc (Symbol: AAL) crossed above their 200 day moving average of $45.42, changing hands as high as $45.75 per share. According to the ETF Finder at ETF Channel, AAL makes up 5.41% of the PowerShares Dynamic Leisure and Entertainment Portfolio ETF (Symbol: PEJ) which is trading up by about 1.5% on the day Thursday. The chart below shows the one year performance of AAL shares, versus its 200 day moving average: Looking at the chart above, AAL's low point in its 52 week range is $34.10 per share, with $56.20 as the 52 week high point - that compares with a last trade of $45.63.
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8209.0
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2015-10-22 00:00:00 UTC
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Ryder System Tops Q3 Earnings, Lags Revenue Estimates
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AAL
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https://www.nasdaq.com/articles/ryder-system-tops-q3-earnings-lags-revenue-estimates-2015-10-22
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nan
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nan
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Ryder System Inc.R reported third-quarter 2015 earnings per share of $1.74 which outpaced the Zacks Consensus Estimate of $1.72 and also improved 6.7% year over year.
This major provider of integrated logistics and transportation solutions registered revenues of $1,669.1 million in the reported quarter, down 1.1% year over year and also below the Zacks Consensus Estimate of $1,717 million. Meanwhile, operating revenues (total revenue less Fleet Management Solutions fuel and all subcontracted transportation) increased 6% year over year to $1,426.5 million.
Segment Results
Fleet Management Solutions: Total revenue fell 2% year over year to $1,157.6 million in the third quarter. Meanwhile, operating revenues moved up 6% year over year to $988.4 million.
Supply Chain Solutions: Total revenue stood at $387.3 million, down 1% from the year-ago quarter. Operating revenues (excluding subcontracted transportation) grew 5% year over year to $318.8 million.
Dedicated Transportation Solutions: Total revenue in the quarter under review came in at $226.9 million, flat year over year. Meanwhile, operating revenues increased 9% year over year to $184.2 million.
Liquidity & Capital Expenditure
Ryder System ended third-quarter 2015 with cash and cash equivalents of $75.4 million compared with $50.1 million recorded at end-2014. The company had long-term debts of $5,450.7 million compared with $4,730.6 million at the end of 2014. At the end of the first nine months of 2015, cash from operations totaled $1,071.3 million compared with $981 million in the same period last year.
Guidance
For 2015, Ryder System raised its earnings per share guidance to $6.45--$6.55, from the previous estimate of $6.17--$6.29. The raised guidance also projects an 11% to 13% rise in earnings from that recorded in 2014. Meanwhile, for the fourth quarter of 2015, the company expects earnings growth in the range of 8% to 14% from $1.59 of earnings per share recorded in the fourth quarter of 2014. Earnings are projected in the range of $1.72 to $1.82 per share.
Stocks to Consider
Ryder System currently has a Zacks Rank #4 (Sell). Better-ranked stocks in the industry include American Airlines Group AAL , Delta Air Lines Inc. DAL and Alaska Air Group, Inc. ALK . All three 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 >>
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RYDER SYS (R): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Get Free Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Better-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 RYDER SYS (R): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. This major provider of integrated logistics and transportation solutions registered revenues of $1,669.1 million in the reported quarter, down 1.1% year over year and also below the Zacks Consensus Estimate of $1,717 million.
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Better-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 RYDER SYS (R): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Meanwhile, operating revenues (total revenue less Fleet Management Solutions fuel and all subcontracted transportation) increased 6% year over year to $1,426.5 million.
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Click to get this free report RYDER SYS (R): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Better-ranked stocks in the industry include American Airlines Group AAL , Delta Air Lines Inc. DAL and Alaska Air Group, Inc. ALK . This major provider of integrated logistics and transportation solutions registered revenues of $1,669.1 million in the reported quarter, down 1.1% year over year and also below the Zacks Consensus Estimate of $1,717 million.
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Better-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 RYDER SYS (R): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Ryder System Inc.R reported third-quarter 2015 earnings per share of $1.74 which outpaced the Zacks Consensus Estimate of $1.72 and also improved 6.7% year over year.
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8210.0
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2015-10-22 00:00:00 UTC
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Southwest Airlines (LUV) Beats on Q3 Earnings, Revenues
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AAL
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https://www.nasdaq.com/articles/southwest-airlines-luv-beats-on-q3-earnings-revenues-2015-10-22
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nan
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nan
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Leading U.S. carrier Southwest Airlines Co.LUV reported third-quarter 2015 financial numbers wherein both the top and the bottom line outpaced the Zacks Consensus Estimate.
Southwest Airlines reported earnings of 94 cents per share, surpassing the Zacks Consensus Estimate of 92 cents. Quarterly revenues moved up 2% year over year to $5,318million, steering past the Zacks Consensus Estimate of $5,102million. On a year-over-year basis, Passenger and Other revenues increased 3.3% and 102.1%, respectively, however, Freight revenues dropped 2.2%.
Southwest Airlines Company - Earnings Surprise | FindTheBest
Operating Statistics
Airline traffic, measured in billions of revenue passenger miles, increased 8.9% year over year to 31.05 billion in the quarter under review. Capacity or available seat miles inched up 7.6% to 36.36 billion, while load factor (percentage of seats filled by passengers) was 85.4% compared with 84.4% in the year-ago quarter. Meanwhile, passenger revenue per available seat mile (PRASM) fell 4% year over year to 12.97 cents.
Operating Expenses & Income
In the third quarter of 2015, adjusted operating income came in at $1,225 million, up a substantial 99.5% year over year mainly buoyed by the decline in fuel costs. Total adjusted operating expenses dropped 2.2% year over year to $4,093 million. Fuel price (economic) stood at $2.2 per gallon, down from $2.94 a year ago. Consolidated unit cost or cost per available seat mile (CASM), excluding fuel, oil and special items, decreased 0.7% year over year to 8.28 cents.
Liquidity
At the end of the third quarter of 2015, Southwest Airlines had $3,096 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 $2,381 million compared with $2,434 million at the end of 2014.
Southwest Airlines generated operating cash flow of $836 million in the reported quarter compared with $240 million in the same quarter last year. At the end of third-quarter 2015, free cash flow totaled $606 million compared with cash consumption of $166 million in the year-ago quarter.
Zacks Rank & Other Key Picks
Southwest Airlines currently carries a Zacks Rank #2 (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 three stocks carry a Zacks Rank #2.
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SOUTHWEST AIR (LUV): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Get Free Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Other 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 AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Leading U.S. carrier Southwest Airlines Co.LUV reported third-quarter 2015 financial numbers wherein both the top and the bottom line outpaced the Zacks Consensus Estimate.
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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 AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Southwest Airlines Company - Earnings Surprise | FindTheBest Operating Statistics Airline traffic, measured in billions of revenue passenger miles, increased 8.9% year over year to 31.05 billion in the quarter under review.
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Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free 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 - Earnings Surprise | FindTheBest Operating Statistics Airline traffic, measured in billions of revenue passenger miles, increased 8.9% year over year to 31.05 billion in the quarter under review.
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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 AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Southwest Airlines generated operating cash flow of $836 million in the reported quarter compared with $240 million in the same quarter last year.
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8211.0
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2015-10-22 00:00:00 UTC
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Pre-Market Earnings Report for October 23, 2015 : PG, LYB, SHPG, TRI, VFC, AAL, STT, RCL, VTR, DTE, CFG, WHR
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AAL
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https://www.nasdaq.com/articles/pre-market-earnings-report-october-23-2015-pg-lyb-shpg-tri-vfc-aal-stt-rcl-vtr-dte-cfg-whr
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nan
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nan
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The following companies are expected to report earnings prior to market open on 10/23/2015. Visit our Earnings Calendar for a full list of expected earnings releases.
Procter & Gamble Company ( PG ) is reporting for the quarter ending September 30, 2015. The cleaning company's consensus earnings per share forecast from the 10 analysts that follow the stock is $0.94. This value represents a 12.15% decrease compared to the same quarter last year. PG missed the consensus earnings per share in the 3rd calendar quarter of 2014 by -0.93%. Zacks Investment Research reports that the 2016 Price to Earnings ratio for PG is 19.42 vs. an industry ratio of 20.30.
LyondellBasell Industries NV ( LYB ) is reporting for the quarter ending September 30, 2015. The chemical company's consensus earnings per share forecast from the 10 analysts that follow the stock is $2.55. This value represents a 1.59% increase compared to the same quarter last year. In the past year LYB has beat the expectations every quarter. The highest one was in the 2nd calendar quarter where they beat the consensus by 8.14%. Zacks Investment Research reports that the 2015 Price to Earnings ratio for LYB is 8.95 vs. an industry ratio of 16.10.
Shire plc ( SHPG ) is reporting for the quarter ending September 30, 2015. The drug company's consensus earnings per share forecast from the 8 analysts that follow the stock is $2.86. This value represents a 2.39% decrease compared to the same quarter last year. Zacks Investment Research reports that the 2015 Price to Earnings ratio for SHPG is 18.18 vs. an industry ratio of -1.30, implying that they will have a higher earnings growth than their competitors in the same industry.
Thomson Reuters Corp ( TRI ) is reporting for the quarter ending September 30, 2015. The technology services company's consensus earnings per share forecast from the 9 analysts that follow the stock is $0.48. This value represents a 6.67% increase compared to the same quarter last year. Zacks Investment Research reports that the 2015 Price to Earnings ratio for TRI is 20.46 vs. an industry ratio of 38.80.
V.F. Corporation ( VFC ) is reporting for the quarter ending September 30, 2015. The textile company's consensus earnings per share forecast from the 19 analysts that follow the stock is $1.12. This value represents a 3.70% increase compared to the same quarter last year. Zacks Investment Research reports that the 2015 Price to Earnings ratio for VFC is 22.42 vs. an industry ratio of 23.20.
American Airlines Group, Inc. ( AAL ) is reporting for the quarter ending September 30, 2015. The airline company's consensus earnings per share forecast from the 9 analysts that follow the stock is $2.72. This value represents a 63.86% increase compared to the same quarter last year. In the past year AAL has beat the expectations every quarter. The highest one was in the 2nd calendar quarter where they beat the consensus by 1.16%. Zacks Investment Research reports that the 2015 Price to Earnings ratio for AAL is 4.97 vs. an industry ratio of 8.90.
State Street Corporation ( STT ) is reporting for the quarter ending September 30, 2015. The bank company's consensus earnings per share forecast from the 12 analysts that follow the stock is $1.25. This value represents a 7.41% decrease compared to the same quarter last year. In the past year STT has met analyst expectations once and beat the expectations the other three quarters. Zacks Investment Research reports that the 2015 Price to Earnings ratio for STT is 13.20 vs. an industry ratio of 13.20, implying that they will have a higher earnings growth than their competitors in the same industry.
Royal Caribbean Cruises Ltd. ( RCL ) is reporting for the quarter ending September 30, 2015. The leisure (recreational) company's consensus earnings per share forecast from the 9 analysts that follow the stock is $2.70. This value represents a 22.73% increase compared to the same quarter last year. RCL missed the consensus earnings per share in the 4th calendar quarter of 2014 by -21.95%. Zacks Investment Research reports that the 2015 Price to Earnings ratio for RCL is 19.78 vs. an industry ratio of 56.80.
Ventas, Inc. ( VTR ) is reporting for the quarter ending September 30, 2015. The reit company's consensus earnings per share forecast from the 4 analysts that follow the stock is $1.10. This value represents a 1.79% decrease compared to the same quarter last year. In the past year VTR has beat the expectations every quarter. The highest one was in the 2nd calendar quarter where they beat the consensus by 1.72%. Zacks Investment Research reports that the 2015 Price to Earnings ratio for VTR is 12.98 vs. an industry ratio of 12.90, implying that they will have a higher earnings growth than their competitors in the same industry.
DTE Energy Company ( DTE ) is reporting for the quarter ending September 30, 2015. The electric power utilities company's consensus earnings per share forecast from the 4 analysts that follow the stock is $1.22. This value represents a 19.61% increase compared to the same quarter last year. Zacks Investment Research reports that the 2015 Price to Earnings ratio for DTE is 17.60 vs. an industry ratio of -23.00, implying that they will have a higher earnings growth than their competitors in the same industry.
Citizens Financial Group, Inc. ( CFG ) is reporting for the quarter ending September 30, 2015. The savings & loan company's consensus earnings per share forecast from the 10 analysts that follow the stock is $0.39. This value represents a 8.33% increase compared to the same quarter last year. In the past year CFG and beat the expectations the other three quarters. Zacks Investment Research reports that the 2015 Price to Earnings ratio for CFG is 14.85 vs. an industry ratio of 21.30.
Whirlpool Corporation ( WHR ) is reporting for the quarter ending September 30, 2015. The household appliance company's consensus earnings per share forecast from the 4 analysts that follow the stock is $3.22. This value represents a 5.92% increase compared to the same quarter last year. Zacks Investment Research reports that the 2015 Price to Earnings ratio for WHR is 12.88 vs. an industry ratio of 18.60.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines Group, Inc. ( AAL ) is reporting for the quarter ending September 30, 2015. In the past year AAL has beat the expectations every quarter. Zacks Investment Research reports that the 2015 Price to Earnings ratio for AAL is 4.97 vs. an industry ratio of 8.90.
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American Airlines Group, Inc. ( AAL ) is reporting for the quarter ending September 30, 2015. In the past year AAL has beat the expectations every quarter. Zacks Investment Research reports that the 2015 Price to Earnings ratio for AAL is 4.97 vs. an industry ratio of 8.90.
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American Airlines Group, Inc. ( AAL ) is reporting for the quarter ending September 30, 2015. In the past year AAL has beat the expectations every quarter. Zacks Investment Research reports that the 2015 Price to Earnings ratio for AAL is 4.97 vs. an industry ratio of 8.90.
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In the past year AAL has beat the expectations every quarter. American Airlines Group, Inc. ( AAL ) is reporting for the quarter ending September 30, 2015. Zacks Investment Research reports that the 2015 Price to Earnings ratio for AAL is 4.97 vs. an industry ratio of 8.90.
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8212.0
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2015-10-21 00:00:00 UTC
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Copa Airlines September Traffic Up 2.3% on Multiple Factors
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AAL
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https://www.nasdaq.com/articles/copa-airlines-september-traffic-up-2.3-on-multiple-factors-2015-10-21
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nan
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nan
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Copa Holdings SA'sCPA business arm Copa Airlines posted an increase in air traffic in the month of September, this year. Traffic - measured in revenue passenger miles (RPMs) - came in at 1.25 billion, up 2.3% from 1.22 billion recorded in the comparable month a year ago.
Notably, on a year-over-year basis, consolidated capacity (or available seat miles/ASMs) inched down 0.5% to 1.71 billion. However, the load factor or percentage of seats filled by passengers rose to 72.8% from 70.8% in Sep 2014.
In the first nine months of 2015, Copa Airlines generated RPMs of 12.21 billion (up 2.8% year over year) and ASMs of 16.19 billion (up 5.3%). However, the load factor fell by 180 basis points year over year to 75.4%.
Expansion of fleet size, extension of routes and increased demand for air travel are expected to propel growth for Copa Airlines even moving ahead.
However, most Latin American airlines, including Copa Airlines, continue to face the brunt of the economic downturn in Brazil and the weakening of the country's currency real against the U.S. dollar.
Further, the 2015 projection by the International Air Transport Association (IATA) paints a gloomy picture for Latin American carriers. According to the forecast, these carriers will account for only $600 million of the $29.3 billion projected global net profit.
In stark contrast to the Latin American airlines, U.S. carriers are scaling new highs on the back of an improving labor market, consolidation and deteriorating oil prices . Since low fuel prices are resulting in massive savings for carriers, American Airlines Group Inc. AAL expects to generate savings to the tune of $4.8 billion in 2015 and Delta Air Lines, Inc. DAL looks to save over $2 billion.
Meanwhile, stiff competition from the likes of LATAM Airlines, Azul Brazilian Airlines and GOL Linhas Aereas Inteligentes S.A. GOL - which largely dominate the Brazilian aviation space - remains a concern and may further mar revenues for Copa Holdings.
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GOL LINHAS-ADR (GOL): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
COPA HLDGS SA-A (CPA): 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.
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Since low fuel prices are resulting in massive savings for carriers, American Airlines Group Inc. AAL expects to generate savings to the tune of $4.8 billion in 2015 and Delta Air Lines, Inc. DAL looks to save over $2 billion. Click to get this free report GOL LINHAS-ADR (GOL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report COPA HLDGS SA-A (CPA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Expansion of fleet size, extension of routes and increased demand for air travel are expected to propel growth for Copa Airlines even moving ahead.
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Since low fuel prices are resulting in massive savings for carriers, American Airlines Group Inc. AAL expects to generate savings to the tune of $4.8 billion in 2015 and Delta Air Lines, Inc. DAL looks to save over $2 billion. Click to get this free report GOL LINHAS-ADR (GOL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report COPA HLDGS SA-A (CPA): 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.
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Since low fuel prices are resulting in massive savings for carriers, American Airlines Group Inc. AAL expects to generate savings to the tune of $4.8 billion in 2015 and Delta Air Lines, Inc. DAL looks to save over $2 billion. Click to get this free report GOL LINHAS-ADR (GOL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report COPA HLDGS SA-A (CPA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. In the first nine months of 2015, Copa Airlines generated RPMs of 12.21 billion (up 2.8% year over year) and ASMs of 16.19 billion (up 5.3%).
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Since low fuel prices are resulting in massive savings for carriers, American Airlines Group Inc. AAL expects to generate savings to the tune of $4.8 billion in 2015 and Delta Air Lines, Inc. DAL looks to save over $2 billion. Click to get this free report GOL LINHAS-ADR (GOL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report COPA HLDGS SA-A (CPA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Copa Holdings SA'sCPA business arm Copa Airlines posted an increase in air traffic in the month of September, this year.
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8213.0
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2015-10-21 00:00:00 UTC
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Ryder System (R) Q3 Earnings: A Disappointment in Store?
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AAL
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https://www.nasdaq.com/articles/ryder-system-r-q3-earnings%3A-a-disappointment-in-store-2015-10-21
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nan
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nan
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Ryder SystemR is scheduled to report its third-quarter 2015 earnings results on Oct 22, before the commencement of trading. Last quarter, the company had posted a positive earnings surprise of 1.85%. Moreover, Ryder System's earnings have outpaced the Zacks Consensus Estimate in three of the past four quarters, with an average beat of 2.35%.
Let's see how things are shaping up prior to this announcement.
Factors at Play
We are disappointed by the company's decision to slash its earnings per share outlook for the third quarter of 2015. The company now expects earnings per share in the third quarter in the band of $1.72 to $1.74 (the previous outlook had called for earnings in the range of $1.82 to $1.87 per share). The lowered EPS guidance mainly reflects weakness at the Fleet Management Solutions segment.
While trimming the outlook, the company stated that third quarter earnings were hurt "by a greater than planned number of out-of-service vehicles, as maintenance technicians were supporting new levels of fleet growth across all product lines".
Since bulk of the revenues at Ryder System is derived from the Fleet Management Solutions division, the segment's below-par performance will hamper the company's third quarter results significantly. Moreover, Ryder System faces certain headwinds such as unstable economic conditions, heavy capital expenditures, mounting debts, stiff competition and federal regulations.
Earnings Whispers
Our proven model does not conclusively show that Ryder System is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP : Ryder System has an earnings ESP of 0.0%.That is because the Most Accurate estimate is in line with the Zacks Consensus Estimate at $1.72 per share.
Zacks Rank : Ryder System has a Zacks Rank #4 (Sell). 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. We note that the Zacks Consensus Estimate at Ryder System has gone down by 13 cents per share for the third quarter to $1.72 over the last 30 days.
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 in the upcoming quarter:
American Airlines Group AAL has an earnings ESP of +0.74% and a Zacks Rank #2. The company will report third-quarter results on Oct 23.
Alaska Air Group, Inc. ALK , the parent company of Alaska Airlines, will unveil its third-quarter earnings numbers on Oct 22, before market opens. The company carries a Zacks Rank #2 and has an earnings ESP of +0.96%.
With an earnings ESP of +1.14% and a Zacks Rank of #3, Canadian National Railway Company CNI is scheduled to report third-quarter results on Oct 27.
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RYDER SYS (R): Free Stock Analysis Report
CDN NATL RY CO (CNI): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Get Free Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Stocks to 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 in the upcoming quarter: American Airlines Group AAL has an earnings ESP of +0.74% and a Zacks Rank #2. Click to get this free report RYDER SYS (R): Free Stock Analysis Report CDN NATL RY CO (CNI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. While trimming the outlook, the company stated that third quarter earnings were hurt "by a greater than planned number of out-of-service vehicles, as maintenance technicians were supporting new levels of fleet growth across all product lines".
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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 in the upcoming quarter: American Airlines Group AAL has an earnings ESP of +0.74% and a Zacks Rank #2. Click to get this free report RYDER SYS (R): Free Stock Analysis Report CDN NATL RY CO (CNI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Alaska Air Group, Inc. ALK , the parent company of Alaska Airlines, will unveil its third-quarter earnings numbers on Oct 22, before market opens.
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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 in the upcoming quarter: American Airlines Group AAL has an earnings ESP of +0.74% and a Zacks Rank #2. Click to get this free report RYDER SYS (R): Free Stock Analysis Report CDN NATL RY CO (CNI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Zacks ESP : Ryder System has an earnings ESP of 0.0%.That is because the Most Accurate estimate is in line with the Zacks Consensus Estimate at $1.72 per share.
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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 in the upcoming quarter: American Airlines Group AAL has an earnings ESP of +0.74% and a Zacks Rank #2. Click to get this free report RYDER SYS (R): Free Stock Analysis Report CDN NATL RY CO (CNI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. 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.
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8214.0
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2015-10-20 00:00:00 UTC
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Canadian Pacific (CP) Beats Q3 Earnings, Misses Revenues
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AAL
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https://www.nasdaq.com/articles/canadian-pacific-cp-beats-q3-earnings-misses-revenues-2015-10-20
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nan
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nan
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Canada's leading railway operator, Canadian Pacific Railway LimitedCP , reported earnings per share of C$2.04 ($1.56) in the third quarter of 2015 compared with C$2.31 ($1.77) recorded in the year-ago quarter. However, adjusted earnings per share of C$2.69 ($2.05) outpaced the Zacks Consensus Estimate of $2.03.
Quarterly revenues climbed 2.3% year over year to C$1,709 million ($1,308.1 million) but fell below the Zacks Consensus Estimate of $1,318 million. The demand for rail services was healthy across most business segments in the quarter under review which translated into the year-over-year upside in revenues. In the third quarter, carloads (volume) decreased 3% year over year and revenue ton-miles also fell 4% year over year.
Operating income witnessed a record improvement of 21.3% year over year to C$753 million ($576.3 million). Meanwhile, operating expenses fell 8.9% year over year. Operating ratio (defined as operating expenses as a percentage of revenues) improved a whopping 290 basis points year over year to 59.9% on continued focus on asset efficiency, safety measures and productivity improvement.
Liquidity
Canadian Pacific exited the third quarter with cash and cash equivalents of C$661 million ($505.9 million) compared with C$226 million ($173 million) at the end of fiscal 2014. Long-term debt totaled C$8,648 million compared with C$6,619.2 million at end-2014.
Zacks Rank & Key Picks
Currently, Canadian Pacific has a Zacks Rank #3 (Hold). Better-ranked transportation stocks include American Airlines Group Inc. AAL , Alaska Air Group, Inc. ALK and JetBlue Airways Corp. JBLU . All three companies 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 >>
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JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
CDN PAC RLWY (CP): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Get Free Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Better-ranked transportation stocks include American Airlines Group Inc. AAL , Alaska Air Group, Inc. ALK and JetBlue Airways Corp. JBLU . Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. The demand for rail services was healthy across most business segments in the quarter under review which translated into the year-over-year upside in revenues.
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Better-ranked transportation stocks include American Airlines Group Inc. AAL , Alaska Air Group, Inc. ALK and JetBlue Airways Corp. JBLU . Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Canada's leading railway operator, Canadian Pacific Railway LimitedCP , reported earnings per share of C$2.04 ($1.56) in the third quarter of 2015 compared with C$2.31 ($1.77) recorded in the year-ago quarter.
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Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Better-ranked transportation stocks include American Airlines Group Inc. AAL , Alaska Air Group, Inc. ALK and JetBlue Airways Corp. JBLU . Quarterly revenues climbed 2.3% year over year to C$1,709 million ($1,308.1 million) but fell below the Zacks Consensus Estimate of $1,318 million.
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Better-ranked transportation stocks include American Airlines Group Inc. AAL , Alaska Air Group, Inc. ALK and JetBlue Airways Corp. JBLU . Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Quarterly revenues climbed 2.3% year over year to C$1,709 million ($1,308.1 million) but fell below the Zacks Consensus Estimate of $1,318 million.
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8215.0
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2015-10-20 00:00:00 UTC
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The American Airlines-US Airways Merger Continues Its Smooth Flight
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AAL
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https://www.nasdaq.com/articles/american-airlines-us-airways-merger-continues-its-smooth-flight-2015-10-20
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nan
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nan
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Last weekend, American Airlines' merger with US Airways faced its biggest test : rolling out a combined reservation system. This phase of the integration process was a huge stumbling block in the 2010 United Continental merger as technology and customer service failures gravely damaged the airline's reputation.
Fortunately, American Airlines passed its test with flying colors. So far, the merger has been executed almost flawlessly. That will help American build its brand equity and gain valuable corporate market share.
No news is good news
The final US Airways flight took off on Friday night, after which company employees quickly changed airport signage from the US Airways name to American Airlines overnight. When customers arrived on Saturday morning, they were now checking in at American Airlines kiosks, even if they had originally booked their reservations through US Airways.
US Airways made its last flight on Friday. Photo: The Motley Fool
This meant that some reservations had to be moved from the old US Airways system to the new combined reservations system. Any bugs in that process could have left many passengers unable to check in or print a boarding pass. This happened to United when it combined the United and Continental reservations systems in early 2012.
American Airlines brought in lots of extra workers this weekend to help sort out any problems. There were a few minor issues like frequent flyer status perks not being recognized and confusion about which terminals certain flights were using at some larger airports. But airport lines remained manageable and almost all flights arrived on time.
To hedge against the possibility of a major technology malfunction, American Airlines operated fewer flights than usual at the former US Airways hubs on Saturday. By Monday morning, it was back to a busy schedule, with no apparent disruptions.
The importance of a smooth transition
At United Continental, the botched reservation system integration has had long-lasting impacts. Just a few months earlier, former American Airlines parent AMR had filed for bankruptcy. In a normal situation, the uncertainty caused by American's bankruptcy should have allowed United to poach a lot of customers from its rival, as the two share several overlapping hub markets.
United Airlines has never fully overcome its botched integration effort. Photo: The Motley Fool
Instead, the disruptions at United created an opening for American Airlines to gain market share, particularly among lucrative corporate customers. American aggressively targeted elite-level frequent flyers with status-match offers as complaints about United's service soared.
The worst thing for United Continental is that once corporate customers leave, they aren't likely to come back unless they are dissatisfied with their new airline. American's successful reservations system migration ensures that it will keep most of the customers it has won away from United in the past few years.
Time to focus on winning
With American now having overcome most of the big hurdles from its merger integration process, the company can focus on boosting profitability. On the revenue side, American will soon be able to start redeploying planes between the former American Airlines and US Airways hubs in order to more precisely match capacity with demand.
Longer-term, it needs to catch up with its rivals in the transpacific market, which is the biggest hole in its route network. In the past few years, American Airlines has added flights from its largest hub -- Dallas-Fort Worth -- to the top five business markets in Asia . Going forward, American will focus on growing its transpacific service out of Los Angeles.
American Airlines can now focus on maximizing its earnings power. Photo: American Airlines
In December, American Airlines will begin flying to Australia for the first time since the early 1990s, with daily flights between Los Angeles and Sydney. It also hopes to launch daily service from Los Angeles to Tokyo's Haneda Airport next year, if it can get suitable slots there. Other key business markets could follow in the next few years.
On the cost side, rather than cutting its headcount to eliminate redundancies, American Airlines has recently added employees to ensure a smooth integration. With the toughest parts of that process in the past, the company will be able to focus on cost-cutting and productivity initiatives in 2016. That should open up significant cost savings opportunities in the next year or two.
In short, American Airlines has completed a lot of the hard work needed to lay the foundation for long-term success. Now it's time for the company to fully exploit its competitive advantages in order to pursue CEO Doug Parker's goal of being the most profitable airline in the world.
The next billion-dollar iSecret
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The article The American Airlines-US Airways Merger Continues Its Smooth Flight 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. 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.
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This phase of the integration process was a huge stumbling block in the 2010 United Continental merger as technology and customer service failures gravely damaged the airline's reputation. In a normal situation, the uncertainty caused by American's bankruptcy should have allowed United to poach a lot of customers from its rival, as the two share several overlapping hub markets. Photo: The Motley Fool Instead, the disruptions at United created an opening for American Airlines to gain market share, particularly among lucrative corporate customers.
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Last weekend, American Airlines' merger with US Airways faced its biggest test : rolling out a combined reservation system. Photo: The Motley Fool Instead, the disruptions at United created an opening for American Airlines to gain market share, particularly among lucrative corporate customers. On the cost side, rather than cutting its headcount to eliminate redundancies, American Airlines has recently added employees to ensure a smooth integration.
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No news is good news The final US Airways flight took off on Friday night, after which company employees quickly changed airport signage from the US Airways name to American Airlines overnight. Photo: The Motley Fool Instead, the disruptions at United created an opening for American Airlines to gain market share, particularly among lucrative corporate customers. Photo: American Airlines In December, American Airlines will begin flying to Australia for the first time since the early 1990s, with daily flights between Los Angeles and Sydney.
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Last weekend, American Airlines' merger with US Airways faced its biggest test : rolling out a combined reservation system. When customers arrived on Saturday morning, they were now checking in at American Airlines kiosks, even if they had originally booked their reservations through US Airways. Photo: The Motley Fool Instead, the disruptions at United created an opening for American Airlines to gain market share, particularly among lucrative corporate customers.
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8216.0
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2015-10-20 00:00:00 UTC
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Notable Tuesday Option Activity: AGN, AAL, EXPE
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AAL
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https://www.nasdaq.com/articles/notable-tuesday-option-activity-agn-aal-expe-2015-10-20
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nan
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nan
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Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume today in Allergan PLC (Symbol: AGN), where a total of 21,060 contracts have traded so far, representing approximately 2.1 million underlying shares. That amounts to about 44.2% of AGN's average daily trading volume over the past month of 4.8 million shares. Especially high volume was seen for the $300 strike call option expiring May 20, 2016 , with 2,700 contracts trading so far today, representing approximately 270,000 underlying shares of AGN. Below is a chart showing AGN's trailing twelve month trading history, with the $300 strike highlighted in orange:
American Airlines Group Inc (Symbol: AAL) saw options trading volume of 41,899 contracts, representing approximately 4.2 million underlying shares or approximately 38.9% of AAL's average daily trading volume over the past month, of 10.8 million shares. Especially high volume was seen for the $48 strike call option expiring November 20, 2015 , with 4,862 contracts trading so far today, representing approximately 486,200 underlying shares of AAL. Below is a chart showing AAL's trailing twelve month trading history, with the $48 strike highlighted in orange:
And Expedia Inc (Symbol: EXPE) saw options trading volume of 6,632 contracts, representing approximately 663,200 underlying shares or approximately 38.4% of EXPE's average daily trading volume over the past month, of 1.7 million shares. Particularly high volume was seen for the $118 strike put option expiring October 30, 2015 , with 2,222 contracts trading so far today, representing approximately 222,200 underlying shares of EXPE. Below is a chart showing EXPE's trailing twelve month trading history, with the $118 strike highlighted in orange:
For the various different available expirations for AGN options , AAL options , or EXPE options , visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Especially high volume was seen for the $48 strike call option expiring November 20, 2015 , with 4,862 contracts trading so far today, representing approximately 486,200 underlying shares of AAL. Below is a chart showing AGN's trailing twelve month trading history, with the $300 strike highlighted in orange: American Airlines Group Inc (Symbol: AAL) saw options trading volume of 41,899 contracts, representing approximately 4.2 million underlying shares or approximately 38.9% of AAL's average daily trading volume over the past month, of 10.8 million shares. Below is a chart showing AAL's trailing twelve month trading history, with the $48 strike highlighted in orange: And Expedia Inc (Symbol: EXPE) saw options trading volume of 6,632 contracts, representing approximately 663,200 underlying shares or approximately 38.4% of EXPE's average daily trading volume over the past month, of 1.7 million shares.
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Below is a chart showing AGN's trailing twelve month trading history, with the $300 strike highlighted in orange: American Airlines Group Inc (Symbol: AAL) saw options trading volume of 41,899 contracts, representing approximately 4.2 million underlying shares or approximately 38.9% of AAL's average daily trading volume over the past month, of 10.8 million shares. Below is a chart showing AAL's trailing twelve month trading history, with the $48 strike highlighted in orange: And Expedia Inc (Symbol: EXPE) saw options trading volume of 6,632 contracts, representing approximately 663,200 underlying shares or approximately 38.4% of EXPE's average daily trading volume over the past month, of 1.7 million shares. Below is a chart showing EXPE's trailing twelve month trading history, with the $118 strike highlighted in orange: For the various different available expirations for AGN options , AAL options , or EXPE options , visit StockOptionsChannel.com.
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Below is a chart showing AGN's trailing twelve month trading history, with the $300 strike highlighted in orange: American Airlines Group Inc (Symbol: AAL) saw options trading volume of 41,899 contracts, representing approximately 4.2 million underlying shares or approximately 38.9% of AAL's average daily trading volume over the past month, of 10.8 million shares. Below is a chart showing AAL's trailing twelve month trading history, with the $48 strike highlighted in orange: And Expedia Inc (Symbol: EXPE) saw options trading volume of 6,632 contracts, representing approximately 663,200 underlying shares or approximately 38.4% of EXPE's average daily trading volume over the past month, of 1.7 million shares. Especially high volume was seen for the $48 strike call option expiring November 20, 2015 , with 4,862 contracts trading so far today, representing approximately 486,200 underlying shares of AAL.
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Below is a chart showing AGN's trailing twelve month trading history, with the $300 strike highlighted in orange: American Airlines Group Inc (Symbol: AAL) saw options trading volume of 41,899 contracts, representing approximately 4.2 million underlying shares or approximately 38.9% of AAL's average daily trading volume over the past month, of 10.8 million shares. Below is a chart showing AAL's trailing twelve month trading history, with the $48 strike highlighted in orange: And Expedia Inc (Symbol: EXPE) saw options trading volume of 6,632 contracts, representing approximately 663,200 underlying shares or approximately 38.4% of EXPE's average daily trading volume over the past month, of 1.7 million shares. Especially high volume was seen for the $48 strike call option expiring November 20, 2015 , with 4,862 contracts trading so far today, representing approximately 486,200 underlying shares of AAL.
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8217.0
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2015-10-20 00:00:00 UTC
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American Airlines Group (AAL) Likely to Beat on Q3 Earnings
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AAL
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https://www.nasdaq.com/articles/american-airlines-group-aal-likely-to-beat-on-q3-earnings-2015-10-20
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nan
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nan
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American Airlines Group Inc.AAL is slated to release its third-quarter 2015 results before the market opens on Oct 23.
Last quarter, American Airlines Group delivered a positive earnings surprise of 1.16%. Let's see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that American Airlines Group is poised to beat earnings this quarter as it has the right combination of 2 key components:
Zacks ESP : The carrier currently has an earnings ESP of +1.48%. This is because the Zacks Consensus Estimate is $2.70 per share, while the Most Accurate Estimate is pegged higher at $2.74.
Zacks Rank : American Airlines Group carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a higher chance of beating earnings. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of American Airlines Group's Zacks Rank #2 and earnings ESP of +1.48% makes us confident of an earnings beat at the company.
What's Driving the Better-than-Expected Earnings?
American Airlines Group boasts a solid earnings history, having delivered positive earnings surprises in each of the trailing four quarters, with an average beat of 1.36%. The company, along with peers such as Southwest Airlines Co. LUV , is benefiting immensely from low fuel costs. American Airlines Group, which does not hedge fuel costs, expects to generate massive savings in 2015 on the back of soft oil prices . Including taxes, the company expects average fuel price per gallon (mainline) in the range of $1.65 to $1.70 as against $1.90 in the second quarter of 2015.
American Airlines Group forecasts a 6% to 8% drop in passenger revenue per available seat mile (PRASM: a measure of unit revenue) for the third quarter of 2015. On the other hand, pre-tax margin (exclusive of special items) is likely to be in the band of 17% to 18% (old guidance: 16% to 18%).
Moreover, we believe continuous expansion of routes, increased flight frequencies and augmented travel demand should boost the upcoming quarter's performance. We are impressed by the company's efforts to reward shareholders consistently through stock repurchases and dividend payments. We expect an update on its buyback plans on the third quarter conference call.
Other 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:
Canadian National Railway Company CNI , with an earnings ESP of +1.15% and a Zacks Rank #3. The company is slated to release its third quarter 2015 results on Oct 27.
Ryanair Holdings RYAAY , with an earnings ESP of +5.30% and a Zacks Rank #1. The company is slated to release its quarterly results on Nov 2.
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SOUTHWEST AIR (LUV): Free Stock Analysis Report
RYANAIR HLDGS (RYAAY): Free Stock Analysis Report
CDN NATL RY CO (CNI): 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.
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American Airlines Group Inc.AAL is slated to release its third-quarter 2015 results before the market opens on Oct 23. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report RYANAIR HLDGS (RYAAY): Free Stock Analysis Report CDN NATL RY CO (CNI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group, which does not hedge fuel costs, expects to generate massive savings in 2015 on the back of soft oil prices .
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Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report RYANAIR HLDGS (RYAAY): Free Stock Analysis Report CDN NATL RY CO (CNI): 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 is slated to release its third-quarter 2015 results before the market opens on Oct 23. Last quarter, American Airlines Group delivered a positive earnings surprise of 1.16%.
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Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report RYANAIR HLDGS (RYAAY): Free Stock Analysis Report CDN NATL RY CO (CNI): 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 is slated to release its third-quarter 2015 results before the market opens on Oct 23. The combination of American Airlines Group's Zacks Rank #2 and earnings ESP of +1.48% makes us confident of an earnings beat at the company.
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American Airlines Group Inc.AAL is slated to release its third-quarter 2015 results before the market opens on Oct 23. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report RYANAIR HLDGS (RYAAY): Free Stock Analysis Report CDN NATL RY CO (CNI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Last quarter, American Airlines Group delivered a positive earnings surprise of 1.16%.
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8218.0
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2015-10-19 00:00:00 UTC
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Spirit Airlines Plunges Another 15%, Falls Into Deep-Value Territory
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AAL
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https://www.nasdaq.com/articles/spirit-airlines-plunges-another-15-falls-deep-value-territory-2015-10-19
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nan
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nan
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Spirit Airlines stock has been a nightmare for investors all year. The stock took its latest dive on Friday, falling 15%, after an investor update suggested that pricing will remain weak for the foreseeable future. Shares ended the week down a full 50% from the all-time high reached in late 2014.
Spirit Airlines Stock Performance, data by YCharts
The ironic thing is that there is nothing fundamentally wrong with Spirit's business model. The company is on pace to post double-digit profit growth this year, and is likely to do so again in 2016. That makes the stock a steal at less than 11 times current-year earnings.
Unit revenue continues its steep fall
Almost every major U.S. airline has suffered a significant decline in unit revenue this year. For example, unit revenue fell 6.9% year over year at American Airlines in Q2, and the company has projected a similar decline for Q3 .
However, the biggest declines by far have come at Spirit Airlines. Spirit's unit revenue fell 12.5% year over year in the first half of 2015. Management suggested on the company's July conference call that the declines will get even steeper in Q3.
Sure enough, Spirit's updated third-quarter guidance issued on Thursday implies that unit revenue declined about 17% to 18% last quarter. Worse yet, the company stated that because of low prices in the markets Spirit serves, unit revenue will fall even faster in Q4.
Spirit Airlines expects another steep unit revenue decline in Q4. Photo: Spirit Airlines.
This weak revenue forecast induced analysts at Morgan Stanley to downgrade Spirit Airlines stock to "equal-weight." The brokerage thinks Spirit's profit margin will fall more in line with the industry average for the foreseeable future, making the stock less attractive.
Profitability remains stellar
What makes the 15% drop in Spirit Airlines somewhat surprising is that the company maintained its full-year margin guidance. The company still expects to produce a 21.5% to 23% operating margin this year, up significantly from 19.2% in 2014.
That wasn't comforting to investors, though, because Spirit Airlines increased its third-quarter margin guidance -- implying that fourth-quarter profitability would be lower than previously expected. In fact, if Spirit's guidance is accurate, it could post a rare year-over-year drop in earnings in Q4. That would also cast doubt on its earnings growth prospects for 2016.
On the other hand, it's also possible that Spirit's Q4 guidance is overly bleak. It's too early to generate a very precise forecast of holiday season performance right now -- and the carrier has underestimated its own earnings potential many times in the past few years.
Spirit's model is built to last
To be conservative, let's suppose that Spirit's forecast is accurate and earnings will be flat or down slightly year over year in Q4. Even that prospect shouldn't keep long-term investors up at night -- because Spirit Airlines' industry-leading cost structure represents a massive, enduring competitive advantage.
For example, American Airlines has historically been one of Spirit's biggest direct competitors. About half of Spirit's routes overlap with American Airlines' nonstop routes.
Spirit estimates that American Airlines' unit costs are 57% higher than its own on a stage-length adjusted basis. This gap is growing wider as Spirit reduces its cost structure through growth and the addition of larger A321 aircraft to its fleet.
American Airlines faces a huge cost disadvantage relative to Spirit Airlines. Photo: American Airlines.
Nevertheless, American Airlines has been aggressively matching Spirit's prices this year, contributing to the latter's steep unit revenue decline. American's management team has insisted that this strategy is not hurting its own unit revenue. Yet it's notable that American Airlines has had the worst domestic unit revenue performance among the top four airlines.
It's hard to see how it can afford to compete on price with Spirit in the long run, given the latter's dramatically lower costs. This was the conclusion of analysts at Evercore ISI, who recently recommended that Spirit should " stand its ground " against American.
As Spirit's growth rate moderates next year, it will provide some initial relief from the company's unit revenue challenges. When American Airlines eventually looks to stem its own revenue declines, the competitive environment facing Spirit should improve dramatically.
In the meantime, Spirit's low -- and falling -- unit costs will enable it to maintain a healthy profit margin while continuing to grow at a 15%-20% annual rate. This is hardly the picture of a company whose stock should be on the discount rack. As a result, in the next few weeks, I will be looking to pick up some more Spirit Airlines stock, especially if it falls any further.
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 Spirit Airlines Plunges Another 15%, Falls Into Deep-Value Territory originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of Spirit Airlines and is long November 2015 $40 calls on American Airlines Group and long March 2016 $40 calls on Spirit Airlines. 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 - 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.
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That wasn't comforting to investors, though, because Spirit Airlines increased its third-quarter margin guidance -- implying that fourth-quarter profitability would be lower than previously expected. It's too early to generate a very precise forecast of holiday season performance right now -- and the carrier has underestimated its own earnings potential many times in the past few years. 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.
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Unit revenue continues its steep fall Almost every major U.S. airline has suffered a significant decline in unit revenue this year. Spirit Airlines expects another steep unit revenue decline in Q4. Adam Levine-Weinberg owns shares of Spirit Airlines and is long November 2015 $40 calls on American Airlines Group and long March 2016 $40 calls on Spirit Airlines.
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For example, unit revenue fell 6.9% year over year at American Airlines in Q2, and the company has projected a similar decline for Q3 . Nevertheless, American Airlines has been aggressively matching Spirit's prices this year, contributing to the latter's steep unit revenue decline. Adam Levine-Weinberg owns shares of Spirit Airlines and is long November 2015 $40 calls on American Airlines Group and long March 2016 $40 calls on Spirit Airlines.
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Spirit Airlines stock has been a nightmare for investors all year. For example, unit revenue fell 6.9% year over year at American Airlines in Q2, and the company has projected a similar decline for Q3 . Photo: American Airlines.
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8219.0
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2015-10-19 00:00:00 UTC
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Will Low Fuel Costs Drive United Continental (UAL) Earnings?
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AAL
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https://www.nasdaq.com/articles/will-low-fuel-costs-drive-united-continental-ual-earnings-2015-10-19
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nan
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nan
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We expect Chicago, IL-based United Continental Holdings, Inc.UAL to report better-than-expected earnings when it unveils financial results for third-quarter 2015 on Oct 22, before market opens.
Last quarter, the company delivered a 0.61% positive earnings surprise. Let's see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that United Continental is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP : The Earnings ESP for the company is +1.56% as the Most Accurate estimate is $4.55 while the Zacks Consensus Estimate is pegged at $4.48. This serves as a meaningful and leading indicator of a likely positive earnings surprise.
Zacks Rank : United Continental currently has a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings. Conversely, the Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of United Continental's Zacks Rank #2 and +1.56% ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-Than-Expected Earnings?
United Continental boasts a solid earnings history, having delivered positive earnings surprises in each of the last four quarters, with an average beat of 3.88%. The company, along with peers such as Southwest Airlines Co. LUV , is benefiting considerably from persistent weak oil prices . United Continental's results in the third quarter of the year are, once again, likely to be positively impacted by low fuel costs.
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. The company projects average fuel price per gallon (inclusive of taxes, settled hedges etc.) for the third quarter at $1.97, which represents a significant reduction from the year-ago figure. Revenues, meanwhile, are expected to be pressurized by a strong dollar, once again, this quarter.
Additionally, we are impressed by United Continental's strong balance sheet. The carrier's efforts to enhance shareholder wealth through buybacks is encouraging.
For the third quarter of 2015, pre-tax margin is projected in the range of 16% to 17%. Moreover, consolidated capacity for the quarter is projected to grow at 2.1% on a year-over-year basis. Passenger revenue per available seat mile (PRASM) is expected to decline in the range of 5.5% to 6.0% in the third quarter. We expect a detailed update on the state of health of CEO Oscar Munoz who was hospitalized last week following a heart attack. Moreover, an update on the plans of the company to appoint an interim CEO is also expected on the call.
Other Stocks to Consider
United Continental is not the only carrier looking up this earnings season. The following airline stocks are also likely to beat earnings in the upcoming quarter:
Alaska Air Group, Inc. ALK , the parent company of Alaska Airlines, will unveil its third-quarter earnings numbers on Oct 22, before market opens. The company carries a Zacks Rank #2 and has an earnings ESP of +0.48%.
American Airlines Group AAL has an earnings ESP of +1.48% and a Zacks Rank #2. The company will report third-quarter results on Oct 23.
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SOUTHWEST AIR (LUV): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Get Free Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines Group AAL has an earnings ESP of +1.48% and a Zacks Rank #2. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. We expect Chicago, IL-based United Continental Holdings, Inc.UAL to report better-than-expected earnings when it unveils financial results for third-quarter 2015 on Oct 22, before market opens.
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Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. American Airlines Group AAL has an earnings ESP of +1.48% and a Zacks Rank #2. We expect Chicago, IL-based United Continental Holdings, Inc.UAL to report better-than-expected earnings when it unveils financial results for third-quarter 2015 on Oct 22, before market opens.
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Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. American Airlines Group AAL has an earnings ESP of +1.48% and a Zacks Rank #2. United Continental boasts a solid earnings history, having delivered positive earnings surprises in each of the last four quarters, with an average beat of 3.88%.
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American Airlines Group AAL has an earnings ESP of +1.48% and a Zacks Rank #2. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings.
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8220.0
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2015-10-19 00:00:00 UTC
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Delta Air Lines Faces Legal Charges for Trophy Transport Ban
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AAL
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https://www.nasdaq.com/articles/delta-air-lines-faces-legal-charges-for-trophy-transport-ban-2015-10-19
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nan
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nan
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Atlanta, GA-based airline behemoth Delta Air Lines, Inc.DAL is at the center of controversy pertaining to its decision earlier in the year to ban transportation of big game hunting trophies.
According to various media reports, a hunter (Corey Knowlton), who shelled out $350,000 for a permit to kill an endangered black rhino in Namibia, and various U.S.-based hunting clubs, have sued the carrier for its decision. In a lawsuit filed in a Dallas federal court, the parties alleged that Delta's ban is illegal and hurts well-meaning hunters. According to a Reuters report, they have argued that the ban "hurts conservation efforts and violates its global obligations". The report further states that the aggrieved parties are adamant that the "transport of the trophies is permitted under a strict systems of global permits and the carrier must abide by its obligations".
Moreover, since Delta is the sole American carrier operating direct flights between Johannesburg and destinations in the U.S., its decision to ban transportation of trophies of lions, leopards, elephants, rhinoceros and buffalos as cargo on its planes is a big setback to hunters' efforts to bring the trophies home.
Not keen to budge from its decision, Delta naturally turned down Knowlton's request to transport the trophy to the U.S. from Africa. This led the hunter and the other associated parties to take recourse to legal action against Delta and challenge the ban in court.
We remind investors that Delta enforced the ban in August this year, following the furor surrounding the killing of the lion, Cecil, at Zimbabwe's Hwange National Park by a Minnesota-based dentist, Walter Palmer. The dentist was on a vacation in Zimbabwe and, according to a report appearing in Fortune, had paid a fee of $50,000 for the trophy hunting. According to a Reuters report, American Airlines Group AAL and United Continental Holdings UAL had also imposed bans similar to Delta in August.
Zacks Rank
Delta carries a Zacks Rank #2 (Buy). Investors interested in the airline space may also consider Ryanair Holdings RYAAY 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 >>
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RYANAIR HLDGS (RYAAY): 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.
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According to a Reuters report, American Airlines Group AAL and United Continental Holdings UAL had also imposed bans similar to Delta in August. Click to get this free report RYANAIR HLDGS (RYAAY): 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. Atlanta, GA-based airline behemoth Delta Air Lines, Inc.DAL is at the center of controversy pertaining to its decision earlier in the year to ban transportation of big game hunting trophies.
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According to a Reuters report, American Airlines Group AAL and United Continental Holdings UAL had also imposed bans similar to Delta in August. Click to get this free report RYANAIR HLDGS (RYAAY): 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.
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Click to get this free report RYANAIR HLDGS (RYAAY): 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. According to a Reuters report, American Airlines Group AAL and United Continental Holdings UAL had also imposed bans similar to Delta in August. Moreover, since Delta is the sole American carrier operating direct flights between Johannesburg and destinations in the U.S., its decision to ban transportation of trophies of lions, leopards, elephants, rhinoceros and buffalos as cargo on its planes is a big setback to hunters' efforts to bring the trophies home.
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Click to get this free report RYANAIR HLDGS (RYAAY): 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. According to a Reuters report, American Airlines Group AAL and United Continental Holdings UAL had also imposed bans similar to Delta in August. Not keen to budge from its decision, Delta naturally turned down Knowlton's request to transport the trophy to the U.S. from Africa.
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8221.0
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2015-10-19 00:00:00 UTC
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Is Alaska Air Group (ALK) Poised to Beat Earnings in Q3?
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AAL
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https://www.nasdaq.com/articles/is-alaska-air-group-alk-poised-to-beat-earnings-in-q3-2015-10-19
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nan
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nan
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Alaska Air Group, Inc.ALK , the parent company of Alaska Airlines, is scheduled to report third-quarter 2015 financial numbers before the opening bell on Oct 22.
Why a Likely Positive Surprise?
Our proven model shows that Alaska Air Group is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP:Earnings ESP for the company stand at +1.93% as the Most Accurate estimate is $2.11 while the Zacks Consensus Estimate is pegged lower at $2.07. This serves as a meaningful and leading indicator of a likely positive earnings surprise.
Zacks Rank: Alaska Air Group currently has a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a significantly higher chance of beating earnings. Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
The combination of Alaska Air Group's Zacks Rank #2 and +1.93% ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-Than-Expected Earnings?
Continuous network expansion and launch of new seasonal flights will drive unit revenues for Alaska Air Group. Last month, the carrier flagged off non-stop flights between Nashville and Seattle, thereby expanding its non-stop service to 84 destinations from Seattle alone. Moreover, declining fuel prices coupled with an improving cost structure will boost the carrier's profits going ahead.
Other Stocks to Consider
Here are some other 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 with an earnings ESP of +1.48% and a Zacks Rank #2.
Allegiant Travel Company ALGT with an earnings ESP of +2.31% and a Zacks Rank #2
Hawaiian Holdings Inc. HA with an earnings ESP of +5.88% and a Zacks Rank #2.
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HAWAIIAN HLDGS (HA): Free Stock Analysis Report
ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Get Free Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Other Stocks to Consider Here are some other 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 with an earnings ESP of +1.48% and a Zacks Rank #2. Click to get this free report HAWAIIAN HLDGS (HA): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Our proven model shows that Alaska Air Group is likely to beat earnings because it has the right combination of two key ingredients.
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Click to get this free report HAWAIIAN HLDGS (HA): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Other Stocks to Consider Here are some other 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 with an earnings ESP of +1.48% and a Zacks Rank #2. Zacks Rank: Alaska Air Group currently has a Zacks Rank #2 (Buy).
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Other Stocks to Consider Here are some other 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 with an earnings ESP of +1.48% and a Zacks Rank #2. Click to get this free report HAWAIIAN HLDGS (HA): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Allegiant Travel Company ALGT with an earnings ESP of +2.31% and a Zacks Rank #2 Hawaiian Holdings Inc. HA with an earnings ESP of +5.88% and a Zacks Rank #2.
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Other Stocks to Consider Here are some other 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 with an earnings ESP of +1.48% and a Zacks Rank #2. Click to get this free report HAWAIIAN HLDGS (HA): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Zacks Rank: Alaska Air Group currently has a Zacks Rank #2 (Buy).
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8222.0
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2015-10-19 00:00:00 UTC
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Is Allegiant Travel (ALGT) Poised to Beat Earnings in Q3?
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AAL
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https://www.nasdaq.com/articles/is-allegiant-travel-algt-poised-to-beat-earnings-in-q3-2015-10-19
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nan
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nan
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Allegiant Travel CompanyALGT is scheduled to report third-quarter 2015 financial numbers after the market closes on Oct 21.
In the last quarter, the company posted a 1.6% earnings surprise. Let's see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that Allegiant Travel is likely to beat earnings this season because it has the right combination of two key ingredients.
Zacks ESP:Earnings ESP for the company is pegged at +0.76% as the Most Accurate estimate stands at $2.65 while the Zacks Consensus Estimate is lower at $2.63. This serves as a meaningful and leading indicator of a likely positive earnings surprise.
Zacks Rank: Allegiant Travel currently has a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a significantly higher chance of beating earnings. Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
The combination of Allegiant Travel's Zacks Rank #2 and +0.76% ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-Than-Expected Earnings?
Allegiant Travel reported strong air traffic growth in the third quarter of 2015 as compared to the year-earlier quarter. Further, both passenger count and revenue passenger miles improved 23% and 20%, respectively.
Allegiant Travel continues to gain from huge travel demand. Moreover, low ticket prices coupled with the company's fleet expansion plans are likely to boost the top and the bottom line of the company significantly. In addition, declining fuel prices and continuous route expansion are expected to contribute to the carrier's profits.
Other Stocks to Consider
Here are other 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 with an earnings ESP of +1.48% and a Zacks Rank #2.
Alaska Air Group, Inc. ALK with an earnings ESP of +0.48% and a Zacks Rank #2
Hawaiian Holdings Inc. HA with an earnings ESP of +5.88% 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
HAWAIIAN HLDGS (HA): Free Stock Analysis Report
ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Get Free Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Other Stocks to Consider Here are other 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 with an earnings ESP of +1.48% and a Zacks Rank #2. Click to get this free report HAWAIIAN HLDGS (HA): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Allegiant Travel CompanyALGT is scheduled to report third-quarter 2015 financial numbers after the market closes on Oct 21.
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Other Stocks to Consider Here are other 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 with an earnings ESP of +1.48% and a Zacks Rank #2. Click to get this free report HAWAIIAN HLDGS (HA): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Alaska Air Group, Inc. ALK with an earnings ESP of +0.48% and a Zacks Rank #2 Hawaiian Holdings Inc. HA with an earnings ESP of +5.88% and a Zacks Rank #2.
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Other Stocks to Consider Here are other 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 with an earnings ESP of +1.48% and a Zacks Rank #2. Click to get this free report HAWAIIAN HLDGS (HA): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Alaska Air Group, Inc. ALK with an earnings ESP of +0.48% and a Zacks Rank #2 Hawaiian Holdings Inc. HA with an earnings ESP of +5.88% and a Zacks Rank #2.
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Other Stocks to Consider Here are other 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 with an earnings ESP of +1.48% and a Zacks Rank #2. Click to get this free report HAWAIIAN HLDGS (HA): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. In the last quarter, the company posted a 1.6% earnings surprise.
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8223.0
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2015-10-16 00:00:00 UTC
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Will Coal Weakness Mar Union Pacific's (UNP) Q3 Earnings?
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AAL
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https://www.nasdaq.com/articles/will-coal-weakness-mar-union-pacifics-unp-q3-earnings-2015-10-16
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nan
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nan
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Leading railroad operator, Union Pacific CorporationUNP , is slated to release its third-quarter 2015 financial numbers before the market opens on Oct 22.
Last quarter, revenues at Union Pacific decreased 10% year over year to $5.43 billion. A 10% decline in freight revenues hurt the top line. Declining coal shipments were once again responsible for the quarterly debacle. Coal revenues (freight) decreased 31% year over year to $679 million in the second quarter. Volumes declined 26% year over year. Apart from coal, decreasing volumes of industrial products and agricultural products also led to the downside.
The Zacks Consensus Estimate of $1.43 per share for the third quarter indicates a year-over-year decline of about 6.43%. Our quantitative model also doesn't hint at an earnings beat in the third quarter.
Here is what our model indicates:
The possibility of Union Pacific beating the Zacks Consensus Estimate in Q3 is less. 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 chances of a positive earnings surprise.
Zacks ESP : Earnings ESP for Union Pacific is -0.70%. This is because the Most Accurate estimate is currently $1.42 while the Zacks Consensus Estimate is pegged higher at $1.43.
Zacks Rank : Union Pacific carries a favorable Zacks Rank #3. However, we need to have a positive ESP in order to be confident of an earnings surprise.
Factors at Play
Union Pacific believes weak coal shipments will continue to hurt the company for the rest of the year with no improvement expected in the near term. The company did not provide any coal-related guidance for 2016 at the Morgan Stanley 3rd Annual Laguna Conference held last month.
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 are also expected to hurt the Omaha, NE-based company's third-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 third quarter. In fact, coal continues to be a major bother for railroad operators like Union Pacific. While exports continue to be affected by the strong dollar, softness in the energy sector has encouraged utilities to switch to natural gas (which is much cheaper).
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 during the third quarter conference call.
Stocks That Warrant a Look
Here are a few major stocks from the transportation sector that you may want to consider, as our model shows that these have the right combination for an earnings beat this quarter.
Alaska Air Group, Inc. ALK , the parent company of Alaska Airlines, will unveil its third-quarter earnings numbers on Oct 22, before market opens. The company carries a Zacks Rank #2 and has an earnings ESP of +0.48%.
American Airlines Group AAL has an earnings ESP of +1.48% and a Zacks Rank #2. The company will report third-quarter results on Oct 23.
With an Earnings ESP of +1.15% and a Zacks Rank of #3, Canadian National Railway Company CNI is scheduled to report third-quarter results on Oct 27.
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 >>
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UNION PAC CORP (UNP): Free Stock Analysis Report
CDN NATL RY CO (CNI): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Get Free Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines Group AAL has an earnings ESP of +1.48% and a Zacks Rank #2. Click to get this free report UNION PAC CORP (UNP): Free Stock Analysis Report CDN NATL RY CO (CNI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Leading railroad operator, Union Pacific CorporationUNP , is slated to release its third-quarter 2015 financial numbers before the market opens on Oct 22.
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Click to get this free report UNION PAC CORP (UNP): Free Stock Analysis Report CDN NATL RY CO (CNI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. American Airlines Group AAL has an earnings ESP of +1.48% and a Zacks Rank #2. 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 chances of a positive earnings surprise.
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Click to get this free report UNION PAC CORP (UNP): Free Stock Analysis Report CDN NATL RY CO (CNI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. American Airlines Group AAL has an earnings ESP of +1.48% and a Zacks Rank #2. Zacks ESP : Earnings ESP for Union Pacific is -0.70%.
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American Airlines Group AAL has an earnings ESP of +1.48% and a Zacks Rank #2. Click to get this free report UNION PAC CORP (UNP): Free Stock Analysis Report CDN NATL RY CO (CNI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Zacks ESP : Earnings ESP for Union Pacific is -0.70%.
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8224.0
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2015-10-16 00:00:00 UTC
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The American Airlines-US Airways Merger Faces Its Biggest Test on Saturday
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AAL
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https://www.nasdaq.com/articles/american-airlines-us-airways-merger-faces-its-biggest-test-saturday-2015-10-16
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nan
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nan
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So far, investors have had no reason to complain about American Airlines ' merger with US Airways. The company has reported a record profit in every single quarter since the merger closed.
So far, the American Airlines-US Airways merger has been fairly smooth. Photo: American Airlines.
Customers haven't had much to complain about, either. The merger hasn't been perfect, but so far there haven't been any major integration-related snafus.
However, the biggest integration milestone comes this weekend, as American Airlines and US Airways merge their reservations systems. This is a key step in allowing the company to operate as a single airline. It's also been the occasion for major headaches in several previous airline mergers, including US Airways' own merger with America West -- and more recently, the United Continental merger.
The danger of integration
In early 2012, as United Continental prepared to move to a single reservations system, CEO Jeff Smisek assured investors that the company had conducted four full dress rehearsals for the switch. Thus, management expected a fairly seamless transition.
Yet the "cutover" was anything but seamless. As United switched to the Continental Airlines reservation system, numerous glitches popped up, causing delays. Some check-in kiosks didn't work on the day of the switch, forcing customers to wait in line for agents. It didn't help that customer service agents from the United Airlines side were now working with unfamiliar software.
To make matters worse, United Continental had opted to launch its combined frequent flyer program on the same day as the reservation system migration. This added more headaches , as some frequent fliers' mileage balances weren't transferred correctly, many routine seat upgrade requests were not completed, and call center wait times spiraled out of control.
The United-Continental integration caused massive problems. Photo: The Motley Fool.
Worst of all, the problems lasted well beyond integration day. Technology glitches cropped up repeatedly at United during 2012 and have remained an all-too frequent issue in the past three years. This has alienated United Airlines customers and damaged the company's profitability.
American Airlines' plan for a smooth transition
American Airlines executives have plenty of experience with rough merger integrations. That's because CEO Doug Parker and several of his top lieutenants also led US Airways through its merger with America West a decade ago. The reservation system migration there was a disaster, leading to lost reservations, massive lines, and widespread flight delays.
American's management has tried to learn from its previous mistakes -- and those at United -- to ensure a smoother integration process this time. First, American Airlines opted to integrate the frequent flyer programs before the full reservation system integration in order to avoid tackling multiple big tasks simultaneously. The programs were combined successfully in March.
Second, management opted to use the technology systems of premerger American Airlines, because it was twice the size of US Airways. That minimized the number of employees who will have to learn a new system. The company also built a new interface on top of the American Airlines reservation system that resembles the old US Airways system, reducing the learning curve .
American Airlines has tried to avoid the pitfalls of previous merger integrations. Photo: American Airlines.
Third, in July, the US Airways website began funneling customers to the American Airlines website for post-Oct. 17 bookings. As a result, very few people still have reservations in the old US Airways system that is going away on Saturday. That should reduce the scope of any snafus in the reservation migration process.
Finally, American Airlines hired 1,900 extra employees a few months ago to cover for US Airways workers who needed to undergo training. These workers will also be available this weekend to respond to any problems that crop up. The increase in headcount has put pressure on American Airlines' unit costs, but these expenses represent insurance against the possibility of a damaging technology failure.
Will it work?
On paper, it looks like American Airlines has done everything necessary to avoid an integration nightmare this weekend. By breaking up the integration process into as many stages as possible, it has reduced the complexity of what needs to happen on Saturday.
Of course, that doesn't guarantee a perfect result. But if the reservation system migration goes smoothly, it will pave the way for American Airlines to unlock significant revenue and cost synergies in the next year or two, keeping profits at record levels.
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The article The American Airlines-US Airways Merger Faces Its Biggest Test on Saturday 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. 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.
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The danger of integration In early 2012, as United Continental prepared to move to a single reservations system, CEO Jeff Smisek assured investors that the company had conducted four full dress rehearsals for the switch. This added more headaches , as some frequent fliers' mileage balances weren't transferred correctly, many routine seat upgrade requests were not completed, and call center wait times spiraled out of control. But if the reservation system migration goes smoothly, it will pave the way for American Airlines to unlock significant revenue and cost synergies in the next year or two, keeping profits at record levels.
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It's also been the occasion for major headaches in several previous airline mergers, including US Airways' own merger with America West -- and more recently, the United Continental merger. To make matters worse, United Continental had opted to launch its combined frequent flyer program on the same day as the reservation system migration. First, American Airlines opted to integrate the frequent flyer programs before the full reservation system integration in order to avoid tackling multiple big tasks simultaneously.
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American Airlines' plan for a smooth transition American Airlines executives have plenty of experience with rough merger integrations. First, American Airlines opted to integrate the frequent flyer programs before the full reservation system integration in order to avoid tackling multiple big tasks simultaneously. The company also built a new interface on top of the American Airlines reservation system that resembles the old US Airways system, reducing the learning curve .
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So far, investors have had no reason to complain about American Airlines ' merger with US Airways. Customers haven't had much to complain about, either. As United switched to the Continental Airlines reservation system, numerous glitches popped up, causing delays.
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8225.0
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2015-10-15 00:00:00 UTC
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Is Hawaiian Holdings (HA) Poised for a Q3 Earnings Beat?
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AAL
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https://www.nasdaq.com/articles/is-hawaiian-holdings-ha-poised-for-a-q3-earnings-beat-2015-10-15
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nan
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nan
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We expect Hawaiian Holdings, Inc.HA , the parent company of Hawaiian Airlines, to report strong numbers when it unveils financial results for third-quarter 2015 on Oct 19, 2015. With results scheduled to be declared after the close of trading on that day, Hawaiian Holdings will be the second notable carrier to disclose third quarter earnings results after Delta Air Lines Inc. DAL .
Why a Likely Positive Surprise?
Our proven model shows that Hawaiian Holdings is poised to beat earnings this quarter as it has the right combination of two key components:
Zacks ESP : The carrier currently has an Earnings ESP of +5.88%. This is because the Zacks Consensus Estimate is $1.19 per share, while the Most Accurate Estimate is pegged higher at $1.26.
Zacks Rank : Hawaiian Holdings carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a higher chance of beating earnings. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of Hawaiian Holdings' Zacks Rank #2 and +5.88% earnings ESP makes us confident of an earnings beat at the company.
What's Driving the Better-than-Expected Earnings?
Hawaiian Holdings boasts a solid earnings history, having delivered positive earnings surprises in three of the last four quarters, with an average beat of 6.39%. The company, along with its peers, has been benefiting consistently from weak oil prices . We expect third quarter results to be positively impacted by the softness in oil prices as well.
Fuel costs account for a major chunk of an airline's operating expenses. Consequently, cheaper oil price should boost Hawaiian Holdings' bottom line in the quarter. The carrier expects cost per available seat mile (ASM) (excluding fuel) in the third quarter to increase in the band of 2.5% to 5.5% year over year. Capacity is projected to increase in the band of 3% to 5%.
However, operating revenue per ASM in the third quarter is projected to decline in the range of 4% to 7%. Fuel price (economic) per gallon in the current quarter is expected at $2.00 to $2.10, representing a significant decline from $3.10 recorded in the third quarter of 2014.
Hawaiian Holdings' strong balance sheet also holds promise. Moreover, the carrier's efforts to enhance shareholders' wealth through buybacks are encouraging.
Other Stocks to Consider
Hawaiian Holdings is not the only carrier looking up this earnings season. The following airline stocks are also likely to beat earnings in the upcoming quarter:
Alaska Air Group, Inc. ALK , the parent company of Alaska Airlines, will unveil its third-quarter earnings numbers on Oct 22, before market opens. The company carries a Zacks Rank #2 and has an earnings ESP of +0.48%.
American Airlines Group AAL has an earnings ESP of +1.48% and a Zacks Rank #2. The company will report third-quarter results on Oct 23.
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
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Get Free Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines Group AAL has an earnings ESP of +1.48% and a Zacks Rank #2. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a higher chance of beating earnings.
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Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. American Airlines Group AAL has an earnings ESP of +1.48% and a Zacks Rank #2. We expect Hawaiian Holdings, Inc.HA , the parent company of Hawaiian Airlines, to report strong numbers when it unveils financial results for third-quarter 2015 on Oct 19, 2015.
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Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. American Airlines Group AAL has an earnings ESP of +1.48% and a Zacks Rank #2. Our proven model shows that Hawaiian Holdings is poised to beat earnings this quarter as it has the right combination of two key components: Zacks ESP : The carrier currently has an Earnings ESP of +5.88%.
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American Airlines Group AAL has an earnings ESP of +1.48% and a Zacks Rank #2. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a higher chance of beating earnings.
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8226.0
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2015-10-15 00:00:00 UTC
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Airlines Hit With a Trio of Analyst Downgrades
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AAL
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https://www.nasdaq.com/articles/airlines-hit-trio-analyst-downgrades-2015-10-15
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nan
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nan
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Shares of three of the six largest U.S. airlines -- American Airlines , JetBlue Airways , and Alaska Air -- were all downgraded on Tuesday.
American Airlines was one of three airlines to get a downgrade on Tuesday. Photo: American Airlines
If there was a theme to the downgrades, it was that investors are getting tired of weak unit revenue performance across the airline industry. The analysts, fearing this negative sentiment, downgraded the stocks, thus adding to the negativity!
At a superficial level, this has created a vicious cycle for the airlines. Even JetBlue and Alaska -- two of the best performing airline stocks -- are now being undercut by this negative sentiment. But unlike a true vicious cycle, which would actually damage the underlying businesses, this feedback loop only impacts the stocks. That's creating great opportunities for patient investors willing to wait out the "negative sentiment."
JetBlue: 1% is not enough!
JPMorgan 's downgrade of JetBlue (from overweight to neutral) was perhaps the most bizarre. That's because JetBlue has been one of the few airlines bucking the trend of falling unit revenue this year. Nevertheless, analyst Jamie Baker cut his rating on JetBlue, arguing that a combination of weak unit revenue growth and a lack of "catalysts" make the stock unappealing at its current price.
It's true that JetBlue's unit revenue for Q3 will be roughly flat year over year. But that's a great result given that unit costs will be down by double digits thanks to the collapse of jet fuel prices in the past year. Furthermore, JetBlue's capacity rose 10.4% last quarter, so JetBlue is still posting strong revenue growth even with flat unit revenue.
JetBlue's revenue growth has been near the top of the industry this year. Photo: JetBlue Airways
There also seem to be plenty of earnings growth drivers coming in the next few years, which I detailed recently . Even before its 8% fall on Tuesday, JetBlue stock traded for a modest 12 times forward earnings, which seems quite low for a company with ample growth and margin expansion opportunities.
American Airlines: too much competition
There's more of an argument to be made for Evercore ISI's downgrade of American Airlines. The combination of the strong dollar, falling international fuel surcharges, and rising competition in Dallas and Chicago caused passenger revenue per available seat mile (PRASM) to decline 6.9% in Q2. American has also estimated that PRASM fell 6%-8% in Q3.
Analyst Duane Pfennigwerth was most concerned about American Airlines' efforts to match the prices of ultra-low cost carriers. According to Pfennigwerth, not only does this make investors more nervous about the industry's long-term pricing power, it also could damage the brand by cheapening it.
However, it's hard to see why business travelers who pay up for premium seats would care much about the prices for cramped seats at the back of the plane. Moreover, American Airlines stock trades for just five times projected 2015 pre-tax earnings (eight times earnings after tax), implying that investors now have very low expectations for the company.
Thus, the stock is so cheap that long-term investors are likely to be well-compensated for their patience. In the meantime, American Airlines is buying back shares at a furious pace to take advantage of the low stock price, further supporting its EPS growth.
Alaska Air: too expensive?
Pfennigwerth didn't have any particular complaints about management's strategy at Alaska Airlines. Nevertheless, he downgraded the stock to hold from buy on valuation concerns.
Alaska Air has a relatively high valuation for an airline, but it's well-deserved. Photo: The Motley Fool
Indeed, Alaska (like JetBlue) is at the higher end of the typical valuation range for airlines. It has been trading for about 11 times forward earnings estimates lately. It's also true that Alaska Airlines doesn't have the same kind of margin expansion drivers that exist at JetBlue right now. (That's largely because Alaska already has a best-in-class profit margin.)
On the other hand, Alaska Airlines is also a relatively small airline with plenty of long-term growth opportunities. It has increased capacity by 10% year to date, contributing to its expected EPS growth of more than 50%. Alaska Air also has a stellar balance sheet, allowing it to buy back lots of stock to juice its EPS growth. Given all of these positives, 11 times forward earnings doesn't seem very expensive at all.
The supposed problems at all three airlines are really just a matter of perception. All three are on pace to post dramatic earnings growth this year. Yet American Airlines stock is dirt cheap, while JetBlue and Alaska Air aren't being valued as the growth companies they are. Sooner or later, the stocks should catch up to reality, offering big potential gains for long-term investors.
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The article Airlines Hit With a Trio of Analyst Downgrades originally appeared on Fool.com.
Adam Levine-Weinberg is long January 2017 $17 calls on JetBlue Airways and long November 2015 $40 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 .
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Nevertheless, analyst Jamie Baker cut his rating on JetBlue, arguing that a combination of weak unit revenue growth and a lack of "catalysts" make the stock unappealing at its current price. The combination of the strong dollar, falling international fuel surcharges, and rising competition in Dallas and Chicago caused passenger revenue per available seat mile (PRASM) to decline 6.9% in Q2. To learn more about what The Motley Fool thinks about current investment trends, and receive a special free report about what might be the next big industry to come out of Silicon Valley, just click here now .
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Even before its 8% fall on Tuesday, JetBlue stock traded for a modest 12 times forward earnings, which seems quite low for a company with ample growth and margin expansion opportunities. Adam Levine-Weinberg is long January 2017 $17 calls on JetBlue Airways and long November 2015 $40 calls on American Airlines Group. The Motley Fool is long January 2017 $35 calls on American Airlines Group.
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Shares of three of the six largest U.S. airlines -- American Airlines , JetBlue Airways , and Alaska Air -- were all downgraded on Tuesday. Photo: American Airlines If there was a theme to the downgrades, it was that investors are getting tired of weak unit revenue performance across the airline industry. Yet American Airlines stock is dirt cheap, while JetBlue and Alaska Air aren't being valued as the growth companies they are.
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Shares of three of the six largest U.S. airlines -- American Airlines , JetBlue Airways , and Alaska Air -- were all downgraded on Tuesday. American Airlines was one of three airlines to get a downgrade on Tuesday. Yet American Airlines stock is dirt cheap, while JetBlue and Alaska Air aren't being valued as the growth companies they are.
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8227.0
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2015-10-15 00:00:00 UTC
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The Zacks Analyst Blog Highlights: American Airlines Group, JetBlue Airways, Southwest Airlines, United Continental Holdings and Delta Air Lines
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AAL
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https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-american-airlines-group-jetblue-airways-southwest-0
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nan
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For Immediate Release
Chicago, IL - October 15, 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 ), JetBlue Airways Corporation ( JBLU ), Southwest Airlines Co. ( LUV ), United Continental Holdings ( 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 Wednesday's Analyst Blog:
Airline Stock Roundup: American Makes Dow Jones
The past week saw a new member from the airline space making its way into the 131-year old Dow Jones Transportation Average index - American Airlines Group Inc. ( AAL ). The carrier is set to join the index - a price-weighted average of 20 U.S. transportation securities - after the close of trading today. American Airlines Group will be the sixth airline company to currently feature on the index.
The Fort Worth, TX-based carrier also revealed impressive traffic numbers for September. Apart from American Airlines, JetBlue Airways Corporation ( JBLU ), Southwest Airlines Co. ( LUV ) and United Continental Holdings ( UAL ) were the other notable carriers that unveiled traffic numbers for September. United Continental also provided a favorable guidance for the third quarter, particularly with respect to pre-tax margin and Passenger Revenue per Available Seat Mile (PRASM).
On the price front, the NYSE ARCA Airline index climbed 2.7% to $90.28 over the last 5 trading days.
(Read the last Airline Stock Roundup for Oct 07, 2015 ).
Recap of the Past Week's Most Important Stories
1. American Airlines Group will feature in the legendary 131-year old Dow Jones Transportation Average replacing trucking company, Con-way Inc., effective close of trading on Oct 14. Con-way's impending acquisition by XPO Logistics prompted the change in the benchmark's composition. The 20-member list already includes airline companies like Delta Air Lines Inc. ( DAL ) and JetBlue Airways Corporation (read more: American Airlines to Replace Con-way in Dow Transports ).
On the traffic front, the metric measured in revenue passenger miles (RPMs) improved 7.2% on a 3.7% rise in capacity for the month of September. Since air traffic growth outpaced capacity growth, load factor increased to 82.7% from 80% in Sep 2014. The levels reached by all the three measures were the highest recorded ever for September (read more: American Airlines Up on September Traffic, PRASM Woes Stay ).
2. Traffic increased 13.3% at low-cost carrier, JetBlue Airways, on a 13.1% rise in capacity. The greater increase in capacity compared to traffic led to a decrease in load factor. PRASM for September improved 1% on a year-over-year basis (read more: JetBlue's September Traffic Gains 13.3% Y/Y, PRASM Rises ).
3. Several flights of Southwest Airlines were delayed owing to a software glitch that caused immense harassment to passengers. The problem was first detected in the morning of Oct 11, and persisted til the evening. As per the Dallas-based carrier, nearly 450 out of the 3600 flights scheduled for departure were postponed during the day. The error has since been rectified. The company also revealed a 11.4% rise in traffic for September on a 8.4% capacity expansion (read more: Southwest Airlines Flights Postponed for Technical Reasons ).
4. Traffic at United Continental Holdings climbed 1.4% on a year-over-year basis to $16.86 billion in Sep 2015. Consolidated capacity too expanded 1.4%. Load factor remained flat at 82.9%. PRASM is now expected to decline in the range of 5.5% to 6% in the third quarter (previous guidance had projected a decline in the band of 5% to 7%).
Pre-tax margin is now projected in the range of 16% to 17% (previous guidance: 13.5% to 15.5%). Fuel price (including all cash settled hedges) is projected at $1.97 per gallon for the third quarter. Moreover, consolidated capacity for the quarter is projected to grow at 2.1% on a year-over-year basis. The figure is at the higher end of the previously projected range of 1.25% to 2.25% due to fewer cancelled flights in the quarter (read more: United Airlines September Traffic Up on New Offers & Routes ).
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Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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AMER AIRLINES (AAL): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
SOUTHWEST AIR (LUV): 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.
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Stocks recently featured in the blog include the American Airlines Group Inc. ( AAL ), JetBlue Airways Corporation ( JBLU ), Southwest Airlines Co. ( LUV ), United Continental Holdings ( UAL ) and Delta Air Lines Inc. ( DAL ). Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: American Makes Dow Jones The past week saw a new member from the airline space making its way into the 131-year old Dow Jones Transportation Average index - American Airlines Group Inc. ( AAL ). Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SOUTHWEST AIR (LUV): 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.
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Stocks recently featured in the blog include the American Airlines Group Inc. ( AAL ), JetBlue Airways Corporation ( JBLU ), Southwest Airlines Co. ( LUV ), United Continental Holdings ( UAL ) and Delta Air Lines Inc. ( DAL ). Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here. Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: American Makes Dow Jones The past week saw a new member from the airline space making its way into the 131-year old Dow Jones Transportation Average index - American Airlines Group Inc. ( AAL ).
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Stocks recently featured in the blog include the American Airlines Group Inc. ( AAL ), JetBlue Airways Corporation ( JBLU ), Southwest Airlines Co. ( LUV ), United Continental Holdings ( UAL ) and Delta Air Lines Inc. ( DAL ). Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: American Makes Dow Jones The past week saw a new member from the airline space making its way into the 131-year old Dow Jones Transportation Average index - American Airlines Group Inc. ( AAL ). Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SOUTHWEST AIR (LUV): 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.
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Stocks recently featured in the blog include the American Airlines Group Inc. ( AAL ), JetBlue Airways Corporation ( JBLU ), Southwest Airlines Co. ( LUV ), United Continental Holdings ( UAL ) and Delta Air Lines Inc. ( DAL ). Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: American Makes Dow Jones The past week saw a new member from the airline space making its way into the 131-year old Dow Jones Transportation Average index - American Airlines Group Inc. ( AAL ). Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SOUTHWEST AIR (LUV): 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.
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8228.0
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2015-10-15 00:00:00 UTC
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Why American Airlines Group (AAL) Stock Might be a Great Pick
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AAL
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https://www.nasdaq.com/articles/why-american-airlines-group-aal-stock-might-be-a-great-pick-2015-10-15
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nan
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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 Transport- Airline 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- Airline industry as it currently has a Zacks Industry Rank of 27 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 $2.61 cper share to $2.70 per share, while current year estimates have risen from $8.74 per share to $8.88 per share. The company currently carries a Zacks Rank #2 (Buy), which is also a favorable signal.
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.
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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 Transport- Airline space is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective.
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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 Transport- Airline space is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective.
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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 Transport- Airline space is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective.
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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 Transport- Airline space is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective.
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8229.0
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2015-10-14 00:00:00 UTC
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Delta Tops Q3 Profit, Should Slow Q4 Capacity Growth
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AAL
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https://www.nasdaq.com/articles/delta-tops-q3-profit-should-slow-q4-capacity-growth-2015-10-14
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nan
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D elta Air Lines ( DAL ) is flying higher after a strong earnings report and nice tailwinds its competitors don't enjoy. But now it's navigating to put unit revenue back on a "positive trajectory."
On Wednesday, the carrier said third-quarter earnings jumped 45% to $1.74 per share. Analysts polled by Thomson Reuters were expecting $1.71 per share. Revenue dipped 0.6% to $11.1 billion, roughly in line with views.
Focused on the profit, investors pushed shares up 1.8% Wednesday to 48.59.
But this was Delta's first quarterly revenue reduction in years, and it followed four quarters of decelerating sales growth.
Delta's total passenger revenue per available seat mile (PRASM) fell 4.9% vs. the 4.5% to 5.5% Delta estimated earlier. No wonder: Capacity rose 3.2% during the quarter.
Looking ahead, Delta said it will keep system capacity flat in Q4 but still sees a drop in PRASM of 2.5% to 4.5% for the quarter.
Getting Back To Where It Was
"Our conservative growth in this low-fuel environment is evidence of our commitment to getting PRASM back on a positive trajectory," said President Ed Bastian.
For 2016, he plans 0% to 2% capacity growth to "balance supply and demand and to ensure the momentum in our business continues."
JPMorgan analyst Jamie Baker said in a research note Wednesday that Delta's 2016 capacity guidance "appears to bode well with investors," most of whom were "bracing for more aggressive growth."
Fuel, which accounts for a third of airlines' expenses, is near lows as oil prices stay under pressure.
But unlike the 1990s, which saw a big uptick in capacity on lower fuel prices, analysts expect capacity growth this time to moderate.
Even if oil prices start rising, Delta could enjoy the benefit of lower oil prices longer than its peers.
"We continue to benefit from the decline in fuel prices, which provided a $1 billion-plus tailwind this quarter and, at current prices, will drive a $750 million benefit in the December quarter," said CFO Paul Jacobson.
Delta, which has its own refinery, has been heavily hedged on fuel at higher prices.American Airlines ( AAL ) has seen the full fuel benefit of lower oil prices because it doesn't hedge, explained Seth Kaplan, managing partner at Airline Weekly.
"As Delta's bad hedges keep wearing off, fuel expenses can continue dropping," he said.
American shares edged up 0.9% Wednesday to 43.79.
Delta CEO Richard Anderson said on the quarterly conference call that the used-widebody-plane market would be "ripe" over the next 12 to 36 months, but Delta "wouldn't strike a deal now."
Lower fuel prices have made owning older planes more advantageous. While older planes burn more fuel, they carry lower ownership costs vs. new planes.
But lower fuel prices have increased competition.
In the lower-fuel-price environment, airlines have expanded capacity, and American,Southwest Airlines ( LUV ) andSpirit Airlines ( SAVE ) are battling for market share in the Dallas-Fort Worth area after the repeal of the Wright Amendment, which restricted nonstop U.S. service out of Love Field.
Southwest shares held at 40.84 Wednesday. Spirit shares rose 1.4% to 50.16.
Turbulence At Love Field
Southwest caused turbulence earlier this year after disclosing plans to boost 2015 capacity by 8%, mostly on growth in Dallas, but later it scaled back its outlook to 7%, and then down to 6%.
With Southwest's focus on the Dallas market, it's shrinking its presence in Atlanta, Delta's home.
Delta's "geographic exposure is OK; they aren't exposed to as much of South America as American is," Kaplan said. "And American has to battle domestically with Spirit and others."
Foreign-currency pressures weighed on Delta's Q3 operating revenue and PRASM as economic softness in Latin America has hit airlines in recent quarters. Delta said Q3 Latin America PRASM fell 5.3%.
But Delta faces a tough battle in Seattle withAlaska Airlines ( ALK ). Delta has added flights to London, Tokyo, Hong Kong and domestic destinations to turn Seattle into a major hub, and Alaska responded by adding flights to Hawaii and the Eastern U.S. to raise capacity out of Seattle by 11%. Alaska Air stock fell 0.6% to 73.45 Wednesday.
Overall Kaplan said Delta is doing "very, very well." JPMorgan has a overweight rating on the stock with a price target of 47.73.
Among The Best Of The Best
Delta has an IBD Composite Rating of 96 out of 99. Its Transportation-Airlines industry group is ranked No. 11 out of the 197 industries IBD tracks.
But not all analysts have a bullish outlook on airlines, as they await more Q3 results.
American and Alaska Air were downgraded to hold by Evercore ISI on Tuesday. And JPMorgan downgradedJetBlue (JBLU) to neutral from overweight, maintaining its 27 price target.
Delta still faces some risks as it gave raises last month to all its nonunion front-line employees. That's its entire workforce except pilots.
Kaplan said the airline will have to find a way to compensate those raises with revenue, but Delta is working on "trying to get its hands around unit revenue decreases" to keep them from sliding further.
Doing 'Everything They Can'
He said the announcement to keep capacity in check in 2016 "means that they are throwing everything they can at the issue of falling unit revenues" to avoid margin contractions.
Delta sees a Q4 operating margin of 16% to 18% and EPS growth of 40% to more than $1.09. Analysts are expecting 49% growth to $1.16.
Airlines traditionally make more money in the summer and then try not to lose too much during the cold months, so Kaplan said Delta's double-digit Q4 growth guidance was especially good news.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Delta, which has its own refinery, has been heavily hedged on fuel at higher prices.American Airlines ( AAL ) has seen the full fuel benefit of lower oil prices because it doesn't hedge, explained Seth Kaplan, managing partner at Airline Weekly. JPMorgan analyst Jamie Baker said in a research note Wednesday that Delta's 2016 capacity guidance "appears to bode well with investors," most of whom were "bracing for more aggressive growth." Foreign-currency pressures weighed on Delta's Q3 operating revenue and PRASM as economic softness in Latin America has hit airlines in recent quarters.
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Delta, which has its own refinery, has been heavily hedged on fuel at higher prices.American Airlines ( AAL ) has seen the full fuel benefit of lower oil prices because it doesn't hedge, explained Seth Kaplan, managing partner at Airline Weekly. But unlike the 1990s, which saw a big uptick in capacity on lower fuel prices, analysts expect capacity growth this time to moderate. In the lower-fuel-price environment, airlines have expanded capacity, and American,Southwest Airlines ( LUV ) andSpirit Airlines ( SAVE ) are battling for market share in the Dallas-Fort Worth area after the repeal of the Wright Amendment, which restricted nonstop U.S. service out of Love Field.
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Delta, which has its own refinery, has been heavily hedged on fuel at higher prices.American Airlines ( AAL ) has seen the full fuel benefit of lower oil prices because it doesn't hedge, explained Seth Kaplan, managing partner at Airline Weekly. But unlike the 1990s, which saw a big uptick in capacity on lower fuel prices, analysts expect capacity growth this time to moderate. In the lower-fuel-price environment, airlines have expanded capacity, and American,Southwest Airlines ( LUV ) andSpirit Airlines ( SAVE ) are battling for market share in the Dallas-Fort Worth area after the repeal of the Wright Amendment, which restricted nonstop U.S. service out of Love Field.
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Delta, which has its own refinery, has been heavily hedged on fuel at higher prices.American Airlines ( AAL ) has seen the full fuel benefit of lower oil prices because it doesn't hedge, explained Seth Kaplan, managing partner at Airline Weekly. American shares edged up 0.9% Wednesday to 43.79. Turbulence At Love Field Southwest caused turbulence earlier this year after disclosing plans to boost 2015 capacity by 8%, mostly on growth in Dallas, but later it scaled back its outlook to 7%, and then down to 6%.
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8230.0
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2015-10-14 00:00:00 UTC
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J.B. Hunt (JBHT) Beats on Q3 Earnings, Misses Revenues
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AAL
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https://www.nasdaq.com/articles/j.b.-hunt-jbht-beats-on-q3-earnings-misses-revenues-2015-10-14
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nan
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J.B. Hunt Transport Services Inc.JBHT reported third-quarter 2015 financial results wherein the bottom line surpassed the Zacks Consensus Estimate while the top line missed.
This transportation company's earnings came in at 99 cents per share, above the Zacks Consensus Estimate of 96 cents. Earnings were also up 13.8% on a year-over-year basis.
Total operating revenue decreased 0.9% year over year to $1,586.5 million and also missed the Zacks Consensus Estimate of $1,620 million. Further, operating income in the quarter improved 12.6% year over year to $193.8 million.
The Intermodal (JBI) division reported quarterly revenues of $948.8 million, down 1.5% year over year. Segmental results were hurt by the lingering effects of disruptive shipping patterns following the West Coast port disturbances. Slow rail service recovery and soft consumer driven freight demand have also impeded load volume growth. Meanwhile, operating income moved up 0.9% year over year to $126.1 million.
Dedicated Contract Services (DCS) revenues grew 2.6% year over year to $370.4 million in the third quarter on higher number of revenue-generating trucks. The average truck count stood at 7,098, up 6.7%. Operating income increased 31.5% year over year to $45.1 million.
Integrated Capacity Solutions (ICS) revenues fell 6.6% year over year to $172.9 million. On a year-over-year basis, revenue per load fell 14.4% primarily due to lower fuel prices and weak transactional customer demand. Operating income rose 36.9% year over year to $11.5 million.
Truck (JBT) revenues inched up 1.8% year over year to $97.5 million. At the end of the reported quarter, the company operated 2,080 tractors, up 14.5% year over year. Operating income improved 160.4% to $11.2 million.
Liquidity
At the end of the reported quarter, cash and cash equivalents were $5,542 million compared with approximately $5,961 million at 2014-end. Long-term debt stood at $993.4 million compared with $683.5 million at the end of 2014.
Zanks Rank & Key Picks
J.B. Hunt currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same space are YRC Worldwide Inc. YRCW , Southwest Airlines Co. LUV and American Airlines Group AAL . All three stocks hold a Zacks Rank #2 (Buy).
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HUNT (JB) TRANS (JBHT): Free Stock Analysis Report
SOUTHWEST AIR (LUV): Free Stock Analysis Report
YRC WORLDWD INC (YRCW): 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.
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Better-ranked stocks in the same space are YRC Worldwide Inc. YRCW , Southwest Airlines Co. LUV and American Airlines Group AAL . Click to get this free report HUNT (JB) TRANS (JBHT): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report YRC WORLDWD INC (YRCW): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Segmental results were hurt by the lingering effects of disruptive shipping patterns following the West Coast port disturbances.
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Click to get this free report HUNT (JB) TRANS (JBHT): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report YRC WORLDWD INC (YRCW): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Better-ranked stocks in the same space are YRC Worldwide Inc. YRCW , Southwest Airlines Co. LUV and American Airlines Group AAL . J.B. Hunt Transport Services Inc.JBHT reported third-quarter 2015 financial results wherein the bottom line surpassed the Zacks Consensus Estimate while the top line missed.
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Click to get this free report HUNT (JB) TRANS (JBHT): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report YRC WORLDWD INC (YRCW): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Better-ranked stocks in the same space are YRC Worldwide Inc. YRCW , Southwest Airlines Co. LUV and American Airlines Group AAL . Total operating revenue decreased 0.9% year over year to $1,586.5 million and also missed the Zacks Consensus Estimate of $1,620 million.
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Better-ranked stocks in the same space are YRC Worldwide Inc. YRCW , Southwest Airlines Co. LUV and American Airlines Group AAL . Click to get this free report HUNT (JB) TRANS (JBHT): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report YRC WORLDWD INC (YRCW): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Total operating revenue decreased 0.9% year over year to $1,586.5 million and also missed the Zacks Consensus Estimate of $1,620 million.
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8231.0
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2015-10-13 00:00:00 UTC
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Consumer Sector Update for 10/13/2015: MCD, AAL, VAC
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AAL
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https://www.nasdaq.com/articles/consumer-sector-update-10132015-mcd-aal-vac-2015-10-13
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nan
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nan
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Top Consumer Shares:
WMT: flat
MCD: flat
DIS: flat
CVS: flat
KO: flat
GE: flat
Consumer shares were unchanged ahead of the opening bell Tuesday.
In consumer stocks news, McDonald's ( MCD ) shares were initiated by SunTrust with a buy rating.
Shares in the company were unchanged at $103.24 pre-bell. This is towards the upper end of the stock's 52 week trading range between $87.50 and $103.47.
Airline operator American Airlines Group ( AAL ) was downgraded by analysts at Evercore ISI to a hold rating from a buy. Price target information was not available.
American Airlines was 1.4% lower at $43.25 pre-bell. Over the past 52 weeks, the company has traded between $29.28 and $56.20.
And Marriott Vacations Worldwide ( VAC ), a developer of vacation ownership and related products, has been upgraded by analysts at JMP Securities to a market outperform rating from market perform. The firm set its price target on the stock at $89 a share.
Shares in the company were flat at $72.40 pre-bell. Over the past 52 weeks, the company has traded between $57.48 and $93.40.
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.
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Airline operator American Airlines Group ( AAL ) was downgraded by analysts at Evercore ISI to a hold rating from a buy. In consumer stocks news, McDonald's ( MCD ) shares were initiated by SunTrust with a buy rating. And Marriott Vacations Worldwide ( VAC ), a developer of vacation ownership and related products, has been upgraded by analysts at JMP Securities to a market outperform rating from market perform.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Airline operator American Airlines Group ( AAL ) was downgraded by analysts at Evercore ISI to a hold rating from a buy. Top Consumer Shares: WMT: flat MCD: flat DIS: flat CVS: flat KO: flat GE: flat Consumer shares were unchanged ahead of the opening bell Tuesday.
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Airline operator American Airlines Group ( AAL ) was downgraded by analysts at Evercore ISI to a hold rating from a buy. Top Consumer Shares: WMT: flat MCD: flat DIS: flat CVS: flat KO: flat GE: flat Consumer shares were unchanged ahead of the opening bell Tuesday. Shares in the company were flat at $72.40 pre-bell.
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Airline operator American Airlines Group ( AAL ) was downgraded by analysts at Evercore ISI to a hold rating from a buy. Shares in the company were unchanged at $103.24 pre-bell. The firm set its price target on the stock at $89 a share.
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8232.0
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2015-10-12 00:00:00 UTC
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Southwest Airlines Flights Postponed for Technical Reasons
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AAL
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https://www.nasdaq.com/articles/southwest-airlines-flights-postponed-for-technical-reasons-2015-10-12
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nan
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Several flights of Southwest Airlines Co.LUV were recently deferred owing to a software glitch which led to delayed check in for passengers.
The problem was first detected in the morning of Oct 11 which persisted till the evening. Meanwhile, Southwest Airlines has been requesting passengers to report at the airport at least two hours before the scheduled flight. As per the Dallas-based carrier, nearly 450 out of the 3600 flights scheduled for departure were postponed during the day.
Technical glitches are becoming a growing concern for carriers, often resulting in passenger harassment and messed up schedules. Last month, premier passenger carrier American Airlines Group AAL faced similar problems when several flights were grounded in Dallas, Chicago and Miami airports for less than two hours following a technical problem.
A few months back, United Continental Holdings, Inc. UAL had faced similar technical issues where network connectivity problems had led to service disruption.
Meanwhile, Southwest Airlines reported an increase in air traffic for the month of September. Traffic - measured in revenue passenger miles (RPMs) - came in at 9.2 billion, up 11.4% from 8.26 billion recorded a year ago. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) inched up 8.4% to 11.13 billion. Meanwhile, the load factor or percentage of seats filled by passengers increased to 82.7% from 80.5% in Sep 2014.
Southwest Airlines currently carries a Zacks Rank #2 (Buy). Another favorably ranked stock in the same space is JetBlue Airways Corp. JBLU with a Zacks Rank #1 (Strong Buy).
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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.
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Last month, premier passenger carrier American Airlines Group AAL faced similar problems when several flights were grounded in Dallas, Chicago and Miami airports for less than two hours following a technical problem. 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. Several flights of Southwest Airlines Co.LUV were recently deferred owing to a software glitch which led to delayed check in for passengers.
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Last month, premier passenger carrier American Airlines Group AAL faced similar problems when several flights were grounded in Dallas, Chicago and Miami airports for less than two hours following a technical problem. 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.
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Last month, premier passenger carrier American Airlines Group AAL faced similar problems when several flights were grounded in Dallas, Chicago and Miami airports for less than two hours following a technical problem. 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. Meanwhile, Southwest Airlines has been requesting passengers to report at the airport at least two hours before the scheduled flight.
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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. Last month, premier passenger carrier American Airlines Group AAL faced similar problems when several flights were grounded in Dallas, Chicago and Miami airports for less than two hours following a technical problem. Meanwhile, Southwest Airlines has been requesting passengers to report at the airport at least two hours before the scheduled flight.
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8233.0
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2015-10-12 00:00:00 UTC
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Nasdaq 100 Movers: INCY, REGN
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AAL
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https://www.nasdaq.com/articles/nasdaq-100-movers-incy-regn-2015-10-12
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nan
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nan
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In early trading on Monday, shares of Regeneron Pharmaceuticals ( REGN ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 2.7%. Year to date, Regeneron Pharmaceuticals registers a 26.1% gain.
And the worst performing Nasdaq 100 component thus far on the day is Incyte Corporation ( INCY ), trading down 3.6%. Incyte Corporation is showing a gain of 38.5% looking at the year to date performance.
Two other components making moves today are Tractor Supply ( TSCO ), trading down 3.1%, and American Airlines Group ( AAL ), trading up 2.1% on the day.
VIDEO: Nasdaq 100 Movers: INCY, REGN
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Two other components making moves today are Tractor Supply ( TSCO ), trading down 3.1%, and American Airlines Group ( AAL ), trading up 2.1% on the day. And the worst performing Nasdaq 100 component thus far on the day is Incyte Corporation ( INCY ), trading down 3.6%. Incyte Corporation is showing a gain of 38.5% looking at the year to date performance.
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Two other components making moves today are Tractor Supply ( TSCO ), trading down 3.1%, and American Airlines Group ( AAL ), trading up 2.1% on the day. And the worst performing Nasdaq 100 component thus far on the day is Incyte Corporation ( INCY ), trading down 3.6%. VIDEO: Nasdaq 100 Movers: INCY, REGN The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Two other components making moves today are Tractor Supply ( TSCO ), trading down 3.1%, and American Airlines Group ( AAL ), trading up 2.1% on the day. In early trading on Monday, shares of Regeneron Pharmaceuticals ( REGN ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 2.7%. And the worst performing Nasdaq 100 component thus far on the day is Incyte Corporation ( INCY ), trading down 3.6%.
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Two other components making moves today are Tractor Supply ( TSCO ), trading down 3.1%, and American Airlines Group ( AAL ), trading up 2.1% on the day. In early trading on Monday, shares of Regeneron Pharmaceuticals ( REGN ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 2.7%. And the worst performing Nasdaq 100 component thus far on the day is Incyte Corporation ( INCY ), trading down 3.6%.
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8234.0
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2015-10-12 00:00:00 UTC
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Company News for October 12, 2015
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AAL
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https://www.nasdaq.com/articles/company-news-for-october-12-2015-2015-10-12
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nan
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nan
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• Helen of Troy Limited's ( HELE ) shares surged 7.4% after announcing fiscal second quarter earnings per share of $1.06, beating the Zacks Consensus Estimate of $1
• Shares of American Airlines Group Inc. ( AAL ) jumped 6.7% after declaring total revenue passenger miles (RPM) of 18.1 billion in September, increasing 7.2% from the year-ago period
• United Continental Holdings, Inc.'s ( UAL ) shares gained 6.6% after anticipating third quarter pre-tax profit margin of 16% to 17%, up from previous forecast of 13.5% to 15.5%
• Shares of Ruby Tuesday, Inc. ( RT ) plunged 12.1% after reporting fiscal first quarter loss per share of $0.03, wider than the year-ago loss of a penny
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HELEN OF TROY (HELE): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
RUBY TUESDAY (RT): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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• Helen of Troy Limited's ( HELE ) shares surged 7.4% after announcing fiscal second quarter earnings per share of $1.06, beating the Zacks Consensus Estimate of $1 • Shares of American Airlines Group Inc. ( AAL ) jumped 6.7% after declaring total revenue passenger miles (RPM) of 18.1 billion in September, increasing 7.2% from the year-ago period • United Continental Holdings, Inc.'s ( UAL ) shares gained 6.6% after anticipating third quarter pre-tax profit margin of 16% to 17%, up from previous forecast of 13.5% to 15.5% • Shares of Ruby Tuesday, Inc. ( RT ) plunged 12.1% after reporting fiscal first quarter loss per share of $0.03, wider than the year-ago loss of a penny Want the latest recommendations from Zacks Investment Research? Click to get this free report HELEN OF TROY (HELE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report RUBY TUESDAY (RT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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• Helen of Troy Limited's ( HELE ) shares surged 7.4% after announcing fiscal second quarter earnings per share of $1.06, beating the Zacks Consensus Estimate of $1 • Shares of American Airlines Group Inc. ( AAL ) jumped 6.7% after declaring total revenue passenger miles (RPM) of 18.1 billion in September, increasing 7.2% from the year-ago period • United Continental Holdings, Inc.'s ( UAL ) shares gained 6.6% after anticipating third quarter pre-tax profit margin of 16% to 17%, up from previous forecast of 13.5% to 15.5% • Shares of Ruby Tuesday, Inc. ( RT ) plunged 12.1% after reporting fiscal first quarter loss per share of $0.03, wider than the year-ago loss of a penny Want the latest recommendations from Zacks Investment Research? Click to get this free report HELEN OF TROY (HELE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report RUBY TUESDAY (RT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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• Helen of Troy Limited's ( HELE ) shares surged 7.4% after announcing fiscal second quarter earnings per share of $1.06, beating the Zacks Consensus Estimate of $1 • Shares of American Airlines Group Inc. ( AAL ) jumped 6.7% after declaring total revenue passenger miles (RPM) of 18.1 billion in September, increasing 7.2% from the year-ago period • United Continental Holdings, Inc.'s ( UAL ) shares gained 6.6% after anticipating third quarter pre-tax profit margin of 16% to 17%, up from previous forecast of 13.5% to 15.5% • Shares of Ruby Tuesday, Inc. ( RT ) plunged 12.1% after reporting fiscal first quarter loss per share of $0.03, wider than the year-ago loss of a penny Want the latest recommendations from Zacks Investment Research? Click to get this free report HELEN OF TROY (HELE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report RUBY TUESDAY (RT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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• Helen of Troy Limited's ( HELE ) shares surged 7.4% after announcing fiscal second quarter earnings per share of $1.06, beating the Zacks Consensus Estimate of $1 • Shares of American Airlines Group Inc. ( AAL ) jumped 6.7% after declaring total revenue passenger miles (RPM) of 18.1 billion in September, increasing 7.2% from the year-ago period • United Continental Holdings, Inc.'s ( UAL ) shares gained 6.6% after anticipating third quarter pre-tax profit margin of 16% to 17%, up from previous forecast of 13.5% to 15.5% • Shares of Ruby Tuesday, Inc. ( RT ) plunged 12.1% after reporting fiscal first quarter loss per share of $0.03, wider than the year-ago loss of a penny Want the latest recommendations from Zacks Investment Research? Click to get this free report HELEN OF TROY (HELE): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report RUBY TUESDAY (RT): 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.
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8235.0
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2015-10-12 00:00:00 UTC
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Will Low Fuel Costs Help Delta (DAL) Top Earnings in Q3?
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AAL
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https://www.nasdaq.com/articles/will-low-fuel-costs-help-delta-dal-top-earnings-in-q3-2015-10-12
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nan
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nan
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We expect airline behemoth Delta Air Lines, Inc.DAL to report strong numbers when it reports financial results for third-quarter 2015 on Oct 14, 2015. With results scheduled to be declared prior to the commencement of trading on that day, Delta will kick off the earnings season in the airline sector.
Why a Likely Positive Surprise?
Our proven model shows that Delta is poised to beat earnings this quarter as it has the right combination of 2 key components:
Zacks ESP : The carrier currently has an Earnings ESP of +1.18%. This is because the Zacks Consensus Estimate is $1.70 per share, while the Most Accurate Estimate is pegged higher at $1.72.
Zacks Rank : Delta carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a higher chance of beating earnings. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of Delta's Zacks Rank #2 and earnings ESP of +1.18% makes us confident of an earnings beat at the company.
What's Driving the Better-than-Expected Earnings?
Delta boasts a solid earnings history, having delivered positive earnings surprises in each of the last four quarters, with an average beat of 3.02%. The company, along with peers such as Southwest Airlines Co. LUV , is benefiting considerably from persistent weak oil prices . Delta's results in the third quarter of the year are, once again, likely to be positively impacted by low fuel costs.
Fuel costs account for a major chunk of an airline's operating expenses. Consequently, cheaper oil price should boost Delta's bottom line in the quarter. The company projects average fuel price per gallon (inclusive of taxes, settled hedges etc.) for the third quarter in the band of $1.80 to $1.85, which represents a significant reduction from the year-ago figure of $2.90. Revenues are expected to be pressurized by a strong dollar yet again in this quarter.
Meanwhile, we are impressed by Delta's strong balance sheet. The carrier's efforts to enhance shareholder wealth through dividends and buybacks are encouraging.
For the third quarter of 2015, the carrier expects operating margin in the range of 20% to 21%, which reflects an improvement from the comparable figure of 15.8% recorded a year ago.
System capacity is expected to increase approximately by 3%. Unit revenue is projected to decline in the band of 4.5% to 5.5%, mainly due to a strong dollar.
Other Stocks to Consider
Delta is not the only carrier looking up this earnings season. The following airline stocks are also likely to beat earnings in the upcoming quarter:
Alaska Air Group, Inc. ALK , the parent company of Alaska Airlines, will unveil its third-quarter earnings numbers on Oct 22, before market opens. The company carries a Zacks Rank #2 and has an earnings ESP of +0.98%.
American Airlines Group AAL has an earnings ESP of +4.94% and a Zacks Rank #2. The company will report results on Oct 23.
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SOUTHWEST AIR (LUV): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Get Free Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines Group AAL has an earnings ESP of +4.94% and a Zacks Rank #2. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. With results scheduled to be declared prior to the commencement of trading on that day, Delta will kick off the earnings season in the airline sector.
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Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. American Airlines Group AAL has an earnings ESP of +4.94% and a Zacks Rank #2. We expect airline behemoth Delta Air Lines, Inc.DAL to report strong numbers when it reports financial results for third-quarter 2015 on Oct 14, 2015.
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Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. American Airlines Group AAL has an earnings ESP of +4.94% and a Zacks Rank #2. Our proven model shows that Delta is poised to beat earnings this quarter as it has the right combination of 2 key components: Zacks ESP : The carrier currently has an Earnings ESP of +1.18%.
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American Airlines Group AAL has an earnings ESP of +4.94% and a Zacks Rank #2. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Get Free Report To read this article on Zacks.com click here. Delta's results in the third quarter of the year are, once again, likely to be positively impacted by low fuel costs.
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8236.0
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2015-10-12 00:00:00 UTC
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American Airlines Up on September Traffic, PRASM Woes Stay
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AAL
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https://www.nasdaq.com/articles/american-airlines-up-on-september-traffic-prasm-woes-stay-2015-10-12
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nan
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nan
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Shares of Fort Worth, TX-based American Airlines Group Inc.AAL gained 6.74% on Oct 9 to close the trading session at $42.42 following the announcement of impressive Sep 2015 traffic data.
Traffic - measured in revenue passenger miles (RPMs) - came in at 18.1 billion during the month, up 7.2% from 16.9 billion recorded a year ago. The improvement came on the back of strong growth in the metric both on the international (up 8.8%) as well as the domestic (up 6.3%) front.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) improved 3.7% to 21.85 billion. Since air traffic growth outpaced capacity growth, the load factor or percentage of seats filled by passengers increased to 82.7% from 80% in Sep 2014. The levels reached by all the three measures were the highest recorded ever for September.
The record traffic numbers unveiled by American Airlines for the month of September represent another positive for the carrier which is already enjoying massive savings owing to weak oil prices . American Airlines Group, which does not hedge fuel costs, expects to generate massive savings in 2015 on the back of soft oil prices. Including taxes, the company expects average fuel price per gallon (mainline) in the range of $1.65 to $1.70 as opposed to $1.90 in the second quarter of 2015.
American Airlines still forecasts a 6% to 8% drop in passenger revenue per available seat mile (PRASM: a measure of unit revenue) for the third 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 come in the band of 17% to 18% (old guidance: 16% to 18%).
The PRASM weakness is not unique to American Airlines. Other American carriers like United Continental Holdings UAL and Delta Air Lines DAL also expect PRASM to decline in the third quarter of 2015.
The company further said that that in the third quarter, it has repurchased 38.4 million shares for $1.56 billion. In the first nine months of the year, the carrier has bought back 59.5 million shares for $2.5 billion. We are impressed by the company's efforts to reward shareholders through buybacks.
Zacks Rank
American Airlines currently carries a Zacks Rank #2 (Buy). Investors interested in the airline space may also consider Virgin America VA 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 >>
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DELTA AIR LINES (DAL): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
VIRGIN AMERICA (VA): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Shares of Fort Worth, TX-based American Airlines Group Inc.AAL gained 6.74% on Oct 9 to close the trading session at $42.42 following the announcement of impressive Sep 2015 traffic data. 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 VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. The record traffic numbers unveiled by American Airlines for the month of September represent another positive for the carrier which is already enjoying massive savings owing to weak oil prices .
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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 VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. Shares of Fort Worth, TX-based American Airlines Group Inc.AAL gained 6.74% on Oct 9 to close the trading session at $42.42 following the announcement of impressive Sep 2015 traffic data. Other American carriers like United Continental Holdings UAL and Delta Air Lines DAL also expect PRASM to decline in the third quarter of 2015.
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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 VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. Shares of Fort Worth, TX-based American Airlines Group Inc.AAL gained 6.74% on Oct 9 to close the trading session at $42.42 following the announcement of impressive Sep 2015 traffic data. The record traffic numbers unveiled by American Airlines for the month of September represent another positive for the carrier which is already enjoying massive savings owing to weak oil prices .
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Shares of Fort Worth, TX-based American Airlines Group Inc.AAL gained 6.74% on Oct 9 to close the trading session at $42.42 following the announcement of impressive Sep 2015 traffic data. 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 VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. Traffic - measured in revenue passenger miles (RPMs) - came in at 18.1 billion during the month, up 7.2% from 16.9 billion recorded a year ago.
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8237.0
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2015-10-12 00:00:00 UTC
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Monday's ETF with Unusual Volume: EXI
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AAL
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https://www.nasdaq.com/articles/mondays-etf-unusual-volume-exi-2015-10-12
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nan
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nan
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The iShares Global Industrials ETF ( EXI ) is seeing unusually high volume in afternoon trading Monday, with over 260,000 shares traded versus three month average volume of about 26,000. Shares of EXI were off about 0.2% on the day.
Components of that ETF with the highest volume on Monday were General Electric ( GE ), trading up about 0.2% with over 13.9 million shares changing hands so far this session, and American Airlines Group ( AAL ), up about 1.8% on volume of over 5.6 million shares. United Continental Holdings ( UAL ) is the component faring the best Monday, up by about 3% on the day, while Joy Global ( JOY ) is lagging other components of the iShares Global Industrials ETF, trading lower by about 4.1%.
VIDEO: Monday's ETF with Unusual Volume: EXI
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Components of that ETF with the highest volume on Monday were General Electric ( GE ), trading up about 0.2% with over 13.9 million shares changing hands so far this session, and American Airlines Group ( AAL ), up about 1.8% on volume of over 5.6 million shares. The iShares Global Industrials ETF ( EXI ) is seeing unusually high volume in afternoon trading Monday, with over 260,000 shares traded versus three month average volume of about 26,000. United Continental Holdings ( UAL ) is the component faring the best Monday, up by about 3% on the day, while Joy Global ( JOY ) is lagging other components of the iShares Global Industrials ETF, trading lower by about 4.1%.
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Components of that ETF with the highest volume on Monday were General Electric ( GE ), trading up about 0.2% with over 13.9 million shares changing hands so far this session, and American Airlines Group ( AAL ), up about 1.8% on volume of over 5.6 million shares. The iShares Global Industrials ETF ( EXI ) is seeing unusually high volume in afternoon trading Monday, with over 260,000 shares traded versus three month average volume of about 26,000. United Continental Holdings ( UAL ) is the component faring the best Monday, up by about 3% on the day, while Joy Global ( JOY ) is lagging other components of the iShares Global Industrials ETF, trading lower by about 4.1%.
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Components of that ETF with the highest volume on Monday were General Electric ( GE ), trading up about 0.2% with over 13.9 million shares changing hands so far this session, and American Airlines Group ( AAL ), up about 1.8% on volume of over 5.6 million shares. The iShares Global Industrials ETF ( EXI ) is seeing unusually high volume in afternoon trading Monday, with over 260,000 shares traded versus three month average volume of about 26,000. VIDEO: Monday's ETF with Unusual Volume: EXI The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Components of that ETF with the highest volume on Monday were General Electric ( GE ), trading up about 0.2% with over 13.9 million shares changing hands so far this session, and American Airlines Group ( AAL ), up about 1.8% on volume of over 5.6 million shares. The iShares Global Industrials ETF ( EXI ) is seeing unusually high volume in afternoon trading Monday, with over 260,000 shares traded versus three month average volume of about 26,000. VIDEO: Monday's ETF with Unusual Volume: EXI The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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8238.0
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2015-10-12 00:00:00 UTC
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American Airlines Goes on a Buyback Binge
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AAL
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https://www.nasdaq.com/articles/american-airlines-goes-buyback-binge-2015-10-12
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nan
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nan
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In a market where many pundits and investors think stocks are overpriced, American Airlines has stood out this year as a screaming bargain.
The company is poised to report its eighth consecutive record quarterly profit later this month. Yet after surging to an all-time high of $56.20 in January, American Airlines shares have fallen up to 40%. In recent months, the stock has been bouncing around the $40 mark, trading for less than five times American's projected 2015 earnings.
American Airlines stock performance, data by YCharts .
American Airlines' management has recognized that the stock's valuation is absurdly low. The company has gone on a buyback binge in the past few months, buying more and more stock as the share price has fallen.
Earnings up -- stock price down
Since the current management team took over following the American Airlines-US Airways merger in late 2013, the company has avoided fuel hedging. This has allowed American to reap a massive windfall in 2015 as fuel prices have fallen.
Through the first six months of 2015, American posted an adjusted profit of $3.1 billion: up 67% year over year. (That's even more remarkable because the company had posted a record profit in each quarter of 2014.) The company's recent guidance implies that it will post an adjusted profit of roughly $1.9 billion in Q3, up from $1.2 billion a year earlier.
Despite this run of stellar profitability, the market has punished American Airlines stock in 2015. Many investors feel that profit growth driven by low fuel prices isn't "real" or sustainable. That's because American's unit revenue has fallen this year, hurt by pockets of rising competition in the U.S., the strong dollar, and falling fuel surcharges on international routes.
Buyback time
Confronted with a bizarre combination of surging cash flow and a falling stock price, American's management began buying back stock in earnest earlier this year.
The board approved a $2 billion share repurchase program in January. American Airlines spent $190 million to buy back 3.8 million shares of stock in Q1. As the stock price really started to slide, management accelerated the pace of repurchases during Q2, buying back 17.3 million shares for $753 million.
American Airlines' share buybacks have taken off this year. Image source: American Airlines.
The American Airlines board then doubled the repurchase authorization to $4 billion in July. On the company'searnings callthat month, CEO Doug Parker told analysts and investors that he thought the stock was dramatically undervalued. He also made it clear that he saw this as a great opportunity to buy back even more stock at a discount.
Sure enough, American Airlines went out and bought back a stunning 37.4 million shares for $1.56 billion during the third quarter. This means that in the span of just two quarters, American Airlines has repurchased nearly 8% of the 694 million shares it had outstanding at the end of March.
Buybacks on the cheap will add value
In theory, the purpose of share buybacks is to reduce a company's share count so that its income is spread over fewer shares. This increases earnings per share -- which hopefully benefits the stock price. American Airlines' massive share repurchases this year haven't stopped its stock slide, though. That might lead some investors to conclude that the buybacks aren't working.
However, that's only true in the short run. Right now, the impact of American's share buybacks is being offset by negative sentiment caused by its unit revenue declines.
As the carrier's unit revenue trajectory improves over the next few quarters -- thanks to easier comparisons, integration benefits, and (hopefully) economic turnarounds in key foreign markets -- that negative sentiment should reverse. But the reduced share count will remain, providing a permanent EPS benefit.
The more shares American Airlines can buy back at a discount, the better off its long-term shareholders will be. By accelerating the company's EPS growth, American Airlines' share buybacks could act as a slingshot, driving a strong recovery for the stock in 2016.
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 Goes on a Buyback Binge originally appeared on Fool.com.
Adam Levine-Weinberg is long November 2015 $40 calls on American Airlines Group. 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 - 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.
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Earnings up -- stock price down Since the current management team took over following the American Airlines-US Airways merger in late 2013, the company has avoided fuel hedging. That's because American's unit revenue has fallen this year, hurt by pockets of rising competition in the U.S., the strong dollar, and falling fuel surcharges on international routes. As the carrier's unit revenue trajectory improves over the next few quarters -- thanks to easier comparisons, integration benefits, and (hopefully) economic turnarounds in key foreign markets -- that negative sentiment should reverse.
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Buyback time Confronted with a bizarre combination of surging cash flow and a falling stock price, American's management began buying back stock in earnest earlier this year. As the stock price really started to slide, management accelerated the pace of repurchases during Q2, buying back 17.3 million shares for $753 million. By accelerating the company's EPS growth, American Airlines' share buybacks could act as a slingshot, driving a strong recovery for the stock in 2016.
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American Airlines spent $190 million to buy back 3.8 million shares of stock in Q1. American Airlines' massive share repurchases this year haven't stopped its stock slide, though. By accelerating the company's EPS growth, American Airlines' share buybacks could act as a slingshot, driving a strong recovery for the stock in 2016.
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The company has gone on a buyback binge in the past few months, buying more and more stock as the share price has fallen. Through the first six months of 2015, American posted an adjusted profit of $3.1 billion: up 67% year over year. American Airlines' share buybacks have taken off this year.
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8239.0
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2015-10-09 00:00:00 UTC
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The Zacks Analyst Blog Highlights: American Airlines Group, Best Buy Company, Delta Air Lines, Tractor Supply and Avago Technologies
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AAL
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https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-american-airlines-group-best-buy-company-delta-air
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nan
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nan
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For Immediate Release
Chicago, IL - October 09, 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 ), Best Buy Company Inc. ( BBY ), Delta Air Lines, Inc. ( DAL ), Tractor Supply Company ( TSCO ) and Avago Technologies Limited ( AVGO ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Thursday's Analyst Blog:
5 Large-Cap Stocks with Great Growth Prospects
After six years of a bull run, investors suddenly found themselves at the mercy of a major stock market correction this August. Well into October, tremors of the sell-off are still perceptible. The major U.S. indexes - S&P 500 and Dow Jones Industrial Average - are currently yielding negative year-to-date returns in the range of 3-5%.
Needless to say, the equity markets have become extremely volatile. The primary reasons are continuous downward pressure on oil prices and the persistent slowdown in the Chinese economy, along with weaknesses in several other economies like Europe, Russia, Japan and Brazil. The Federal Reserve's "no rate hike" decision over similar concerns as well as low inflation in the U.S. has added fuel to the fire.
While the domestic economy is showing signs of growth, global concerns are making investors jittery. Also, concerns pertaining to divergent monetary policies across major economies have made matters worse.
How to Play It Safe?
What should be the winning strategy in this precarious investment game when the global scenario is far from supportive? Melodramatic markets tend to show exaggerated movements on whatever disclosures or revelations are made.
Given the insecurities looming large in the global markets, we present large-cap stocks, to be the safest bet to defy the times. Large-cap stocks are an ideal investment option for investors looking for performance stability that comes with lower risk than small-cap and mid-cap stocks.
Let's Play Our Cards Right
To accomplish the daunting task of picking the right large-cap stocks that have great growth prospects, we first looked at companies with a market cap of more than $10 billion.
Then, a thorough analysis of the company's growth potential was made to determine if the particular company has a bright future. Using our style score system , one can locate stocks that have a solid upside potential. Our Growth Style Score condenses all the essential metrics from the company's financial statements to get a true sense of the quality and sustainability of its growth.
Finally, we added the most important criteria - a Zacks Rank #1 (Strong Buy) or #2 (Buy) - to get at the right stocks. Our research shows that stocks with a Style Score of 'A' when combined with a Zacks Rank #1 or #2 offer the best investment opportunities.
With the help of Zacks Stock Screener we zeroed in on these five stocks:
American Airlines Group Inc.AAL
American Airlines Group Inc. operates in the airline industry. The company operates more than 6,700 daily flights to over 330 destinations in more than 50 nations across the globe from its hubs. It primarily operates in two segments: Mainline and Regional affiliates. Furthermore, through its large cargo unit, the company offers a broad range of freight and mail services worldwide. American Airlines Group is headquartered in Fort Worth, TX.
Zacks Rank: #2
Growth Score: A
Long-term EPS Growth: 14.04%
Market Cap: $25.62 billion
Return on Equity: 162.01% vs. Industry Average: 21.93%
Best Buy Company Inc.BBY
Headquartered in Richfield, MN, Best Buy Company Inc. is a multinational specialty retailer of consumer electronics, home office products, entertainment software, appliances and related services with 1,448 domestic locations and 283 international outlets at the end of fiscal 2015.
Zacks Rank: #2
Growth Score: A
Long-term EPS Growth: 10.65%
Market Cap: $12.86 billion
Return on Equity: 19.83% vs. Industry Average: 7.13%
Delta Air Lines, Inc.DAL
Based in Atlanta, GA, Delta Air Lines, Inc. is a leading provider of scheduled air transportation for passengers and cargo throughout the U.S. and around the world. Delta offers services to 327 destinations in 59 countries across six continents. It operates a mainline fleet of more than 700 aircraft and serves in excess of 170 million customers annually.
Zacks Rank: #1
Growth Score: A
Long-term EPS Growth: 20.57%
Market Cap: $35.86 billion
Return on Equity: 30.84% vs. Industry Average: 21.93%
Tractor Supply CompanyTSCO
Headquartered in Brentwood, TN, Tractor Supply Company is the largest retail farm and ranch store chain in the U.S. The company offers a wide array of merchandise such as livestock, pet and animal products, maintenance products for agricultural and rural use, hardware and tools, lawn and garden power equipment, truck and towing products, and work apparel.
Zacks Rank: #2
Growth Score: A
Long-term EPS Growth: 16%
Market Cap: $11.76 billion
Return on Equity: 30.64% vs. Industry Average: 13.62%
Avago Technologies LimitedAVGO
Based in Singapore, Avago Technologies Limited is a premier designer, developer and global supplier of a broad range of analog semiconductor devices and digital, mixed-signal and optoelectronics components and subsystems. Avago products primarily serve four target markets: Wireless Communications, Wired Infrastructure, Enterprise Storage and Industrial & Other.
Zacks Rank: #2
Growth Score: A'
Long-term EPS Growth: 17.93%
Market Cap: $32.25 billion
Return on Equity: 59% vs. Industry Average: 6.57%
Dealing with volatility is something investors may have to get used to for the rest of 2015. At the same time, investors would be foolish to ignore the growth prospects inherent in these large-cap stocks. They're also a hedge against risk. This is why these stocks would make for good additions to your portfolio.
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
BEST BUY (BBY): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
TRACTOR SUPPLY (TSCO): Free Stock Analysis Report
AVAGO TECHNOLOG (AVGO): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Stocks recently featured in the blog include the American Airlines Group Inc. ( AAL ), Best Buy Company Inc. ( BBY ), Delta Air Lines, Inc. ( DAL ), Tractor Supply Company ( TSCO ) and Avago Technologies Limited ( AVGO ). With the help of Zacks Stock Screener we zeroed in on these five stocks: American Airlines Group Inc.AAL American Airlines Group Inc. operates in the airline industry. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report BEST BUY (BBY): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report TRACTOR SUPPLY (TSCO): Free Stock Analysis Report AVAGO TECHNOLOG (AVGO): Free Stock Analysis Report To read this article on Zacks.com click here.
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Stocks recently featured in the blog include the American Airlines Group Inc. ( AAL ), Best Buy Company Inc. ( BBY ), Delta Air Lines, Inc. ( DAL ), Tractor Supply Company ( TSCO ) and Avago Technologies Limited ( AVGO ). Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report BEST BUY (BBY): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report TRACTOR SUPPLY (TSCO): Free Stock Analysis Report AVAGO TECHNOLOG (AVGO): Free Stock Analysis Report To read this article on Zacks.com click here. With the help of Zacks Stock Screener we zeroed in on these five stocks: American Airlines Group Inc.AAL American Airlines Group Inc. operates in the airline industry.
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Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report BEST BUY (BBY): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report TRACTOR SUPPLY (TSCO): Free Stock Analysis Report AVAGO TECHNOLOG (AVGO): 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 ), Best Buy Company Inc. ( BBY ), Delta Air Lines, Inc. ( DAL ), Tractor Supply Company ( TSCO ) and Avago Technologies Limited ( AVGO ). With the help of Zacks Stock Screener we zeroed in on these five stocks: American Airlines Group Inc.AAL American Airlines Group Inc. operates in the airline industry.
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Stocks recently featured in the blog include the American Airlines Group Inc. ( AAL ), Best Buy Company Inc. ( BBY ), Delta Air Lines, Inc. ( DAL ), Tractor Supply Company ( TSCO ) and Avago Technologies Limited ( AVGO ). With the help of Zacks Stock Screener we zeroed in on these five stocks: American Airlines Group Inc.AAL American Airlines Group Inc. operates in the airline industry. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report BEST BUY (BBY): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report TRACTOR SUPPLY (TSCO): Free Stock Analysis Report AVAGO TECHNOLOG (AVGO): Free Stock Analysis Report To read this article on Zacks.com click here.
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8240.0
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2015-10-08 00:00:00 UTC
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5 Large-Cap Stocks with Great Growth Prospects
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AAL
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https://www.nasdaq.com/articles/5-large-cap-stocks-with-great-growth-prospects-2015-10-08
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nan
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nan
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After six years of a bull run, investors suddenly found themselves at the mercy of a major stock market correction this August. Well into October, tremors of the sell-off are still perceptible. The major U.S. indexes - S&P 500 and Dow Jones Industrial Average - are currently yielding negative year-to-date returns in the range of 3-5%.
Needless to say, the equity markets have become extremely volatile. The primary reasons are continuous downward pressure on oil prices and the persistent slowdown in the Chinese economy, along with weaknesses in several other economies like Europe, Russia, Japan and Brazil. The Federal Reserve's "no rate hike" decision over similar concerns as well as low inflation in the U.S. has added fuel to the fire.
While the domestic economy is showing signs of growth, global concerns are making investors jittery. Also, concerns pertaining to divergent monetary policies across major economies have made matters worse.
How to Play It Safe?
What should be the winning strategy in this precarious investment game when the global scenario is far from supportive? Melodramatic markets tend to show exaggerated movements on whatever disclosures or revelations are made
Given the insecurities looming large in the global markets, we present large-cap stocks, to be the safest bet to defy the times. Large-cap stocks are an ideal investment option for investors looking for performance stability that comes with lower risk than small-cap and mid-cap stocks.
Let's Play Our Cards Right
To accomplish the daunting task of picking the right large-cap stocks that have great growth prospects, we first looked at companies with a market cap of more than $10 billion.
Then, a thorough analysis of the company's growth potential was made to determine if the particular company has a bright future. Using our style score system , one can locate stocks that have a solid upside potential. Our Growth Style Score condenses all the essential metrics from the company's financial statements to get a true sense of the quality and sustainability of its growth.
Finally, we added the most important criteria - a Zacks Rank #1 (Strong Buy) or #2 (Buy) - to get at the right stocks. Our research shows that stocks with a Style Score of 'A' when combined with a Zacks Rank #1 or #2 offer the best investment opportunities.
With the help of Zacks Stock Screener we zeroed in on these five stocks:
American Airlines Group Inc.AAL
American Airlines Group Inc. operates in the airline industry. The company operates more than 6,700 daily flights to over 330 destinations in more than 50 nations across the globe from its hubs. It primarily operates in two segments: Mainline and Regional affiliates. Furthermore, through its large cargo unit, the company offers a broad range of freight and mail services worldwide. American Airlines Group is headquartered in Fort Worth, TX.
Zacks Rank: #2
Growth Score: A
Long-term EPS Growth: 14.04%
Market Cap: $25.62 billion
Return on Equity: 162.01% vs. Industry Average: 21.93%
Best Buy Company Inc.BBY
Headquartered in Richfield, MN, Best Buy Company Inc. is a multinational specialty retailer of consumer electronics, home office products, entertainment software, appliances and related services with 1,448 domestic locations and 283 international outlets at the end of fiscal 2015.
Zacks Rank: #2
Growth Score: A
Long-term EPS Growth: 10.65%
Market Cap: $12.86 billion
Return on Equity: 19.83% vs. Industry Average: 7.13%
Delta Air Lines, Inc.DAL
Based in Atlanta, GA, Delta Air Lines, Inc. is a leading provider of scheduled air transportation for passengers and cargo throughout the U.S. and around the world. Delta offers services to 327 destinations in 59 countries across six continents. It operates a mainline fleet of more than 700 aircraft and serves in excess of 170 million customers annually.
Zacks Rank: #1
Growth Score: A
Long-term EPS Growth: 20.57%
Market Cap: $35.86 billion
Return on Equity: 30.84% vs. Industry Average: 21.93%
Tractor Supply CompanyTSCO
Headquartered in Brentwood, TN, Tractor Supply Company is the largest retail farm and ranch store chain in the U.S. The company offers a wide array of merchandise such as livestock, pet and animal products, maintenance products for agricultural and rural use, hardware and tools, lawn and garden power equipment, truck and towing products, and work apparel.
Zacks Rank: #2
Growth Score: A
Long-term EPS Growth: 16%
Market Cap: $11.76 billion
Return on Equity: 30.64% vs. Industry Average: 13.62%
Avago Technologies LimitedAVGO
Based in Singapore, Avago Technologies Limited is a premier designer, developer and global supplier of a broad range of analog semiconductor devices and digital, mixed-signal and optoelectronics components and subsystems. Avago products primarily serve four target markets: Wireless Communications, Wired Infrastructure, Enterprise Storage and Industrial & Other.
Zacks Rank: #2
Growth Score: A
Long-term EPS Growth: 17.93%
Market Cap: $32.25 billion
Return on Equity: 59% vs. Industry Average: 6.57%
Dealing with volatility is something investors may have to get used to for the rest of 2015. At the same time, investors would be foolish to ignore the growth prospects inherent in these large-cap stocks. They're also a hedge against risk. This is why these stocks would make for good additions to your portfolio.
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
TRACTOR SUPPLY (TSCO): Free Stock Analysis Report
BEST BUY (BBY): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
AVAGO TECHNOLOG (AVGO): 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.
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With the help of Zacks Stock Screener we zeroed in on these five stocks: American Airlines Group Inc.AAL American Airlines Group Inc. operates in the airline industry. Click to get this free report TRACTOR SUPPLY (TSCO): Free Stock Analysis Report BEST BUY (BBY): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AVAGO TECHNOLOG (AVGO): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Let's Play Our Cards Right To accomplish the daunting task of picking the right large-cap stocks that have great growth prospects, we first looked at companies with a market cap of more than $10 billion.
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Click to get this free report TRACTOR SUPPLY (TSCO): Free Stock Analysis Report BEST BUY (BBY): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AVAGO TECHNOLOG (AVGO): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. With the help of Zacks Stock Screener we zeroed in on these five stocks: American Airlines Group Inc.AAL American Airlines Group Inc. operates in the airline industry. Zacks Rank: #2 Growth Score: A Long-term EPS Growth: 10.65% Market Cap: $12.86 billion Return on Equity: 19.83% vs. Industry Average: 7.13% Delta Air Lines, Inc.DAL Based in Atlanta, GA, Delta Air Lines, Inc. is a leading provider of scheduled air transportation for passengers and cargo throughout the U.S. and around the world.
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Click to get this free report TRACTOR SUPPLY (TSCO): Free Stock Analysis Report BEST BUY (BBY): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AVAGO TECHNOLOG (AVGO): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. With the help of Zacks Stock Screener we zeroed in on these five stocks: American Airlines Group Inc.AAL American Airlines Group Inc. operates in the airline industry. Zacks Rank: #2 Growth Score: A Long-term EPS Growth: 14.04% Market Cap: $25.62 billion Return on Equity: 162.01% vs. Industry Average: 21.93% Best Buy Company Inc.BBY Headquartered in Richfield, MN, Best Buy Company Inc. is a multinational specialty retailer of consumer electronics, home office products, entertainment software, appliances and related services with 1,448 domestic locations and 283 international outlets at the end of fiscal 2015.
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With the help of Zacks Stock Screener we zeroed in on these five stocks: American Airlines Group Inc.AAL American Airlines Group Inc. operates in the airline industry. Click to get this free report TRACTOR SUPPLY (TSCO): Free Stock Analysis Report BEST BUY (BBY): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AVAGO TECHNOLOG (AVGO): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. While the domestic economy is showing signs of growth, global concerns are making investors jittery.
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8241.0
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2015-10-08 00:00:00 UTC
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American Airlines to Replace Con-way in Dow Transports
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AAL
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https://www.nasdaq.com/articles/american-airlines-to-replace-con-way-in-dow-transports-2015-10-08
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nan
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nan
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Shares of Fort Worth, TX-based American Airlines Group Inc.AAL gained 3.09% on Oct 7, following the news that it will feature in the legendary 131-year old Dow Jones Transportation Average index. The carrier will replace Con-way Inc., a trucking company, in the oldest U.S. stock index after the close of trading on Oct 14. Con-way's impending acquisition by XPO Logistics Inc. XPO prompted the change in the benchmark's composition, which will come into effect following the commencement of trading on Oct 15.
Following the inclusion of American Airlines, the strength of airline companies on the 20-member list will increase to six. The Dow Jones Transportation Average - a price-weighted average of 20 U.S. transportation securities - was created by Charles Dow, co-founder of Dow Jones & Company, way back in 1884. The index includes railroads, truckers, marine transportation, delivery services and logistics companies, apart from airlines. Consequently, the Dow Jones Transportation Average index stands as a true representative of the U.S. transportation division. The most well-known U.S. stock index is Dow Jones Industrial Average, which came into existence twelve years after the creation of the Dow Jones Transportation Average.
According to the Dow Theory, the Dow Jones Industrial Average governs the movement of the Dow Jones Transportation Average in normal market conditions. In the event of the industrial average scaling a new high, transports must follow suit. In the scenario of both averages simultaneously experiencing tough times, the trend reverses. An alarming situation highlighting economic weakness/market abnormality arises in the event of the indices diverging. For example, an upward movement of the industrial average coupled with a downward movement of the transportation average indicates declining demand with goods not being transported at the same rate as they are being produced.
Following American Airlines' replacement of a trucking company, the market capitalization of the airlines sub-industry group will exceed that of the trucking sub-group in the price weighted index, according to S&P Dow Jones Indices, a division of McGraw Hill Financial Inc.
Zacks Rank
American Airlines carries a Zacks Rank #2 (Buy). Investors interested in the airline space may also consider Delta Air Lines Inc. DAL and JetBlue Airways Corporation JBLU . Notably, both these Zacks Rank #1 (Strong Buy) companies are members of the Dow Jones Transportation Average index.
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
AMER AIRLINES (AAL): Free Stock Analysis Report
XPO LOGISTICS (XPO): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Shares of Fort Worth, TX-based American Airlines Group Inc.AAL gained 3.09% on Oct 7, following the news that it will feature in the legendary 131-year old Dow Jones Transportation Average index. Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report XPO LOGISTICS (XPO): Free Stock Analysis Report To read this article on Zacks.com click here. Investors interested in the airline space may also consider Delta Air Lines Inc. DAL and JetBlue Airways Corporation JBLU .
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Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report XPO LOGISTICS (XPO): Free Stock Analysis Report To read this article on Zacks.com click here. Shares of Fort Worth, TX-based American Airlines Group Inc.AAL gained 3.09% on Oct 7, following the news that it will feature in the legendary 131-year old Dow Jones Transportation Average index. According to the Dow Theory, the Dow Jones Industrial Average governs the movement of the Dow Jones Transportation Average in normal market conditions.
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Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report XPO LOGISTICS (XPO): Free Stock Analysis Report To read this article on Zacks.com click here. Shares of Fort Worth, TX-based American Airlines Group Inc.AAL gained 3.09% on Oct 7, following the news that it will feature in the legendary 131-year old Dow Jones Transportation Average index. The Dow Jones Transportation Average - a price-weighted average of 20 U.S. transportation securities - was created by Charles Dow, co-founder of Dow Jones & Company, way back in 1884.
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Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report XPO LOGISTICS (XPO): Free Stock Analysis Report To read this article on Zacks.com click here. Shares of Fort Worth, TX-based American Airlines Group Inc.AAL gained 3.09% on Oct 7, following the news that it will feature in the legendary 131-year old Dow Jones Transportation Average index. According to the Dow Theory, the Dow Jones Industrial Average governs the movement of the Dow Jones Transportation Average in normal market conditions.
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8242.0
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2015-10-07 00:00:00 UTC
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The Zacks Analyst Blog Highlights: American Airlines, Delta Air Lines, FreightCar America, JetBlue Airways and SkyWest
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AAL
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https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-american-airlines-delta-air-lines-freightcar-america
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nan
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nan
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For Immediate Release
Chicago, IL - October 07, 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 ), Delta Air Lines Inc. ( DAL ), FreightCar America Inc. ( RAIL ), JetBlue Airways Corporation ( JBLU ) and SkyWest Inc. ( SKYW ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Tuesday's Analyst Blog:
Delta and 3 Other Transportation Stocks in High Gear
The transportation sector is highly diversified with airlines, truckers, shippers and railroads running alongside. Now, the one and vital factor that's common for each of these drivers is low oil prices as fuel accounts for the majority of input cost for any transportation company.
Airlines: Biggest Beneficiary of Weak Oil
The free-fall in oil prices which has now lasted for over one year has benefited the airline stocks like no other. Operating expenses of these stocks have been reduced because one of the major input costs for carriers is fuel. The horror show of oil is actually nothing short of a godsend for these players that have seen their bottom lines being benefited greatly.
The magnitude of the benefit can be made out from the fact that oil prices are currently hovering around $45 per barrel, representing an over 100% decline from the mid-2014 levels when oil was trading above $100 per barrel.
Naturally, this huge decline in one of the largest input costs has resulted in massive savings for carriers. Despite the fact that most carriers hedge at least some of their fuel costs, the majority of them should still continue to benefit considerably from the steep decline in oil prices.
For example, the Fort Worth, TX-based American Airlines Group ( AAL ), which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 thanks to soft oil prices. The Atlanta, GA-based Delta Air Lines Inc. ( DAL ), which has restructured its fuel hedge portfolio in the wake of the soft fuel price environment, also expects to generate savings of over $2 billion in 2015.
The solid financial health of the airline stocks has resulted in most of them, like Delta rewarding shareholders through fresh buyback programs apart from hiking their dividend payments. Carriers have also used their favorable financial position to reduce debt levels.
Weak Oil Should Benefit Carriers in Q3, Too
The fall in oil prices -- which has been going on for quite some time -- has resulted in blockbuster earnings for airline companies over the last few quarters.
In the second quarter of 2015, the airline industry amassed record quarterly profits in excess of $5 billion, all thanks to the plunge in fuel prices. This is expected to continue in the third quarter earnings season, which will be kick-started by Delta on Oct 14. We expect the company to better estimates on the back of low fuel costs. The company has a solid earnings history, having surpassed the Zacks Consensus Estimate in each of the last four quarters.
Airlines' Good Zacks Industry Rank Supports Bullish View
Most of the stocks in the airline space is seeing solid earnings estimate revisions, and is in great company from the Zacks Industry Rank perspective.
This is important because often a rising tide will lift all the boats. Likewise, broad trends in a sector can boost stocks across the board. The Zacks Industry Rank #28 for the "Trans-Airline" segment that places it at the top 1/3rd of the 260+ industry groups further supports the bullish stance on airline stocks.
Transportation to Log Double-Digit Growth
With airline stocks flying high, it is quite natural that the broader transportation sector is expected to give a handsome performance in the third quarter. This is despite the fact that the poor show of railroads is expected to continue courtesy weak domestic coal shipments.
Earnings growth for the S&P members in the transportation space is projected to grow at 17.3% in the third quarter of 2015 which compares favorably with 12.6% growth seen in the second quarter (read more: Zacks Earning Trends report ).
Boost Your Portfolio with 4 High-Flying Transportation Stocks
In view of the overall positive sentiment surrounding the transportation sector, mainly due to the high-flying airlines' sub-group, we believe that it is certainly a profitable strategy for investors to include some well-performing transportation stocks in their portfolios for higher returns.
However, it is by no means an easy task to select the right stocks given the wide range of players in the transportation space. To make one's search easier, we have handpicked transportation stocks that are backed by a good Zacks Growth Score apart from a Zacks Rank #1 (Strong Buy). Then we narrowed down our list to four gainful stocks with the help of our new style score system .
Notably, our research shows that stocks with Style Scores of 'A' or 'B' when combined with a Zacks Rank #1 or #2 (Buy) offer the best investment opportunities.
Airline behemoth Delta Air Lines is our first choice. The carrier boasts a Growth Style Score of 'A.' The company's expected earnings growth rate for the current year is 39%, which compares favorably with the industry growth rate of 8.1%.
Our next choice is FreightCar America Inc. ( RAIL ) which designs, manufactures, and sells aluminum-bodied railcars and coal cars. This Chicago-based transportation company has a Growth Style Score of 'A.' The company's expected earnings growth rate for the current year is more than 100%, way above the industry average of 10.7%.
We also advise investors to add Long Island City, NY-based low-cost carrier JetBlue Airways Corporation ( JBLU ) to their portfolio. This high-flying airline stock has a Growth Style Score of 'B' and an expected earnings growth rate for the current year of over 100%, which is way above the industry average of 8.1%.
Our final choice is the St. George, UT-based carrier SkyWest Inc. ( SKYW ). The carrier has a Growth Style Score of 'B' with an expected earnings growth rate for the current year exceeding 100%, again way above the industry average of 8.1%.
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 >>
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
DELTA AIR LINES (DAL): Free Stock Analysis Report
FREIGHTCAR AMER (RAIL): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): 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.
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Stocks recently featured in the blog include the American Airlines Group ( AAL ), Delta Air Lines Inc. ( DAL ), FreightCar America Inc. ( RAIL ), JetBlue Airways Corporation ( JBLU ) and SkyWest Inc. ( SKYW ). For example, the Fort Worth, TX-based American Airlines Group ( AAL ), which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 thanks to soft oil prices. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report FREIGHTCAR AMER (RAIL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report To read this article on Zacks.com click here.
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Stocks recently featured in the blog include the American Airlines Group ( AAL ), Delta Air Lines Inc. ( DAL ), FreightCar America Inc. ( RAIL ), JetBlue Airways Corporation ( JBLU ) and SkyWest Inc. ( SKYW ). Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report FREIGHTCAR AMER (RAIL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report To read this article on Zacks.com click here. For example, the Fort Worth, TX-based American Airlines Group ( AAL ), which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 thanks to soft oil prices.
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Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report FREIGHTCAR AMER (RAIL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): 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 the American Airlines Group ( AAL ), Delta Air Lines Inc. ( DAL ), FreightCar America Inc. ( RAIL ), JetBlue Airways Corporation ( JBLU ) and SkyWest Inc. ( SKYW ). For example, the Fort Worth, TX-based American Airlines Group ( AAL ), which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 thanks to soft oil prices.
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Stocks recently featured in the blog include the American Airlines Group ( AAL ), Delta Air Lines Inc. ( DAL ), FreightCar America Inc. ( RAIL ), JetBlue Airways Corporation ( JBLU ) and SkyWest Inc. ( SKYW ). For example, the Fort Worth, TX-based American Airlines Group ( AAL ), which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 thanks to soft oil prices. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report FREIGHTCAR AMER (RAIL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report To read this article on Zacks.com click here.
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8243.0
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2015-10-07 00:00:00 UTC
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Airline Stock Roundup: Delta Gives Fresh Q3 View, Air France to Trim Workforce
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AAL
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https://www.nasdaq.com/articles/airline-stock-roundup%3A-delta-gives-fresh-q3-view-air-france-to-trim-workforce-2015-10-07
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nan
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nan
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The past week saw Atlanta, GA-based airline behemoth, Delta Air Lines DAL tweaking its guidance for the third quarter of 2015. The new guidance compares favorably, particularly in terms of unit revenue and average fuel price per gallon, to the one announced in July.
France's flagship carrier Air France-KLM SA AFLYY grabbed headlines following its decision to cut 2,900 jobs announced in a meeting with union representatives. The meeting did not go smoothly as it was stormed protesters. Ugly scenes followed with executives fleeing in tattered and torn clothes.
Much calmer news emanated from the Seattle, WA-based Alaska Air Group ALK . The parent company of Alaska Airlines and Horizon Air Industries revealed an increase in air traffic as well as capacity for September. American Airlines Group AAL also featured in the headlines over the past week by virtue of its pay-related tentative deal with the union representing its reservations and gate agents.
On the price front, the NYSE ARCA Airline index declined marginally to $86.22 over the last 5 trading days as oil prices fluctuated wildly.
(Read the last Airline Stock Roundup for Sep 30, 2015 ).
Recap of the Past Week's Most Important Stories
1. Load factor (% of seats filled by passengers) at Delta climbed 130 basis points to 85% in September as traffic growth outpaced the rise in capacity. For the third quarter of 2015, the carrier now expects operating margin in the range of 20% to 21% (old guidance: 19% to 21%). The estimated fuel price per gallon, including taxes and hedges, is now expected at $1.80 to $1.85 (previous guidance: $1.90 to $1.95). Unit revenue is now projected to decline in the band of 4.5% and 5.5% (instead of 4.5% to 6.5% projected previously) (read more: Delta Air Lines September Traffic Rises Amid PRASM Worries ).
2. According to a Bloomberg report, the struggling French carrier Air France-KLM SA will trim its workforce by 2,900. The carrier's executives announced that 300 cockpit crew, 900 flight attendants and 1,700 ground staff could be dismissed soon (read more: Air France Plans 2,900 Job Cuts, Unions Threaten Strike ).
3. There have been quite a few updates on labor deals (albeit tentative) in the airline space, of late. Not to be left behind, American Airlines Group also announced a tentative deal with the Communications Workers of America and International Brotherhood of Teamsters - the union representing the carrier's passenger service agents (read more: American Airlines Nears Pay-Hike Deal with Service Staff ).
4. Alaska Air Group's air traffic - measured in revenue passenger miles (RPMs) - for Sep 2015 was 2.63 billion, up 10% from 2.39 billion a year ago. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) improved 10.3% year over year to 3.22 billion. Meanwhile, the load factor decreased to 81.6% from 81.9% in Sep 2014 (read more: Alaska Air Group September Traffic Up on Route Expansion ).
In a bid to expand its operations, the carrier started operating flights between the cities of Seattle and Raleigh/Durham, NC from Oct 1 (read more: Alaska Air Group Adds Raleigh to Seattle Network ).
5. Low-cost carrier JetBlue Airways Corp. JBLU is consistently engaged in efforts to expand its operations. In keeping with this objective, the Long Island City, NY-based carrier announced the commencement of daily flights to Mexico City, thereby making the capital of Mexico its 91st global destination. As far as the Latin America and Caribbean region is concerned, Mexico City marks the 35th destination for JetBlue (read more: JetBlue Flies to Mexico City, Boosts Latin American Presence ).
JetBlue Airways has also announced plans to operate two daily non-stop roundtrip flights between Nashville International Airport (BNA) and Boston Logan International Airport from May 5, 2016. It will also run a once-daily non-stop roundtrip flight between BNA and Fort Lauderdale-Hollywood International Airport.
Performance
The following table shows the price movement of the major airline players over the past week and during the last 6 months.
As seen in the chart above, the majority of the big airline stocks traded in the red over the past week. Moreover, most of the stocks also lost value over the last six months with Latin American carrier GOL Linhas GOL declining the most.
What's Next in the Airline Biz?
With the Q3 earnings season yet to commence, we expect traffic updates from carriers like Southwest Airlines Co. LUV over the coming days. Moreover, we expect investors to remain glued to the price movement of airline stocks given the volatile nature exhibited by oil prices lately.
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
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
AIR FRANCE-ADR (AFLYY): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines Group AAL also featured in the headlines over the past week by virtue of its pay-related tentative deal with the union representing its reservations and gate agents. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): 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 AIR FRANCE-ADR (AFLYY): Free Stock Analysis Report To read this article on Zacks.com click here. France's flagship carrier Air France-KLM SA AFLYY grabbed headlines following its decision to cut 2,900 jobs announced in a meeting with union representatives.
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Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): 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 AIR FRANCE-ADR (AFLYY): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group AAL also featured in the headlines over the past week by virtue of its pay-related tentative deal with the union representing its reservations and gate agents. Not to be left behind, American Airlines Group also announced a tentative deal with the Communications Workers of America and International Brotherhood of Teamsters - the union representing the carrier's passenger service agents (read more: American Airlines Nears Pay-Hike Deal with Service Staff ).
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Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): 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 AIR FRANCE-ADR (AFLYY): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group AAL also featured in the headlines over the past week by virtue of its pay-related tentative deal with the union representing its reservations and gate agents. Not to be left behind, American Airlines Group also announced a tentative deal with the Communications Workers of America and International Brotherhood of Teamsters - the union representing the carrier's passenger service agents (read more: American Airlines Nears Pay-Hike Deal with Service Staff ).
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American Airlines Group AAL also featured in the headlines over the past week by virtue of its pay-related tentative deal with the union representing its reservations and gate agents. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): 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 AIR FRANCE-ADR (AFLYY): Free Stock Analysis Report To read this article on Zacks.com click here. France's flagship carrier Air France-KLM SA AFLYY grabbed headlines following its decision to cut 2,900 jobs announced in a meeting with union representatives.
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8244.0
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2015-10-06 00:00:00 UTC
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Delta and 3 Other Transportation Stocks in High Gear
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AAL
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https://www.nasdaq.com/articles/delta-and-3-other-transportation-stocks-in-high-gear-2015-10-06
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nan
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nan
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The transportation sector is highly diversified with airlines, truckers, shippers and railroads running alongside. Now, the one and vital factor that's common for each of these drivers is low oil prices as fuel accounts for the majority of input cost for any transportation company.
Airlines: Biggest Beneficiary of Weak Oil
The free-fall in oil prices which has now lasted for over one year has benefited the airline stocks like no other. Operating expenses of these stocks have been reduced because one of the major input costs for carriers is fuel. The horror show of oil is actually nothing short of a godsend for these players that have seen their bottom lines being benefited greatly.
The magnitude of the benefit can be made out from the fact that oil prices are currently hovering around $45 per barrel, representing an over 100% decline from the mid-2014 levels when oil was trading above $100 per barrel.
Naturally, this huge decline in one of the largest input costs has resulted in massive savings for carriers. Despite the fact that most carriers hedge at least some of their fuel costs, the majority of them should still continue to benefit considerably from the steep decline in oil prices.
For example, the Fort Worth, TX-based American Airlines Group AAL , which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 thanks to soft oil prices. The Atlanta, GA-based Delta Air Lines Inc. DAL , which has restructured its fuel hedge portfolio in the wake of the soft fuel price environment, also expects to generate savings of over $2 billion in 2015.
The solid financial health of the airline stocks has resulted in most of them like Delta and Southwest Airlines LUV rewarding shareholders through fresh buyback programs apart from hiking their dividend payments. Carriers have also used their favorable financial position to reduce debt levels.
Weak Oil Should Benefit Carriers in Q3, Too
The fall in oil prices -- which has been going on for quite some time -- has resulted in blockbuster earnings for airline companies over the last few quarters.
In the second quarter of 2015, the airline industry amassed record quarterly profits in excess of $5 billion, all thanks to the plunge in fuel prices. This is expected to continue in the third quarter earnings season, which will be kick-started by Delta on Oct 14. We expect the company to better estimates on the back of low fuel costs. The company has a solid earnings history, having surpassed the Zacks Consensus Estimate in each of the last four quarters.
Airlines' Good Zacks Industry Rank Supports Bullish View
Most of the stocks in the airline space is seeing solid earnings estimate revisions, and is in great company from the Zacks Industry Rank perspective.
This is important because often a rising tide will lift all the boats. Likewise, broad trends in a sector can boost stocks across the board. The Zacks Industry Rank #28 for the "Trans-Airline" segment that places it at the top 1/3rd of the 260+ industry groups further supports the bullish stance on airline stocks.
Transportation to Log Double-Digit Growth
With airline stocks flying high, it is quite natural that the broader transportation sector is expected to give a handsome performance in the third quarter. This is despite the fact that the poor show of railroads is expected to continue courtesy weak domestic coal shipments.
Earnings growth for the S&P members in the transportation space is projected to grow at 17.3% in the third quarter of 2015 which compares favorably with 12.6% growth seen in the second quarter (read more: Zacks Earning Trends report ).
Boost Your Portfolio with 4 High-Flying Transportation Stocks
In view of the overall positive sentiment surrounding the transportation sector, mainly due to the high-flying airlines' sub-group, we believe that it is certainly a profitable strategy for investors to include some well-performing transportation stocks in their portfolios for higher returns.
However, it is by no means an easy task to select the right stocks given the wide range of players in the transportation space. To make one's search easier, we have handpicked transportation stocks that are backed by a good Zacks Growth Score apart from a Zacks Rank #1 (Strong Buy). Then we narrowed down our list to four gainful stocks with the help of our new style score system .
Notably, our research shows that stocks with Style Scores of 'A' or 'B' when combined with a Zacks Rank #1 or #2 (Buy) offer the best investment opportunities.
Airline behemoth Delta Air Lines is our first choice. The carrier boasts a Growth Style Score of 'A.' The company's expected earnings growth rate for the current year is 39%, which compares favorably with the industry growth rate of 8.1%.
Our next choice is FreightCar America Inc.RAIL which designs, manufactures, and sells aluminum-bodied railcars and coal cars. This Chicago-based transportation company has a Growth Style Score of 'A.' The company's expected earnings growth rate for the current year is more than 100%, way above the industry average of 10.7%.
We also advise investors to add Long Island City, NY-based low-cost carrier JetBlue Airways CorporationJBLU to their portfolio. This high-flying airline stock has a Growth Style Score of 'B' and an expected earnings growth rate for the current year of over 100%, which is way above the industry average of 8.1%.
Our final choice is the St. George, UT-based carrier SkyWest Inc.SKYW . The carrier has a Growth Style Score of 'B' with an expected earnings growth rate for the current year exceeding 100%, again way above the industry average of 8.1%.
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
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
SKYWEST INC (SKYW): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
FREIGHTCAR AMER (RAIL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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For example, the Fort Worth, TX-based American Airlines Group AAL , which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 thanks to soft oil prices. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report FREIGHTCAR AMER (RAIL): Free Stock Analysis Report To read this article on Zacks.com click here. Now, the one and vital factor that's common for each of these drivers is low oil prices as fuel accounts for the majority of input cost for any transportation company.
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Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report FREIGHTCAR AMER (RAIL): Free Stock Analysis Report To read this article on Zacks.com click here. For example, the Fort Worth, TX-based American Airlines Group AAL , which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 thanks to soft oil prices. Airlines' Good Zacks Industry Rank Supports Bullish View Most of the stocks in the airline space is seeing solid earnings estimate revisions, and is in great company from the Zacks Industry Rank perspective.
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Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report FREIGHTCAR AMER (RAIL): Free Stock Analysis Report To read this article on Zacks.com click here. For example, the Fort Worth, TX-based American Airlines Group AAL , which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 thanks to soft oil prices. Airlines' Good Zacks Industry Rank Supports Bullish View Most of the stocks in the airline space is seeing solid earnings estimate revisions, and is in great company from the Zacks Industry Rank perspective.
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For example, the Fort Worth, TX-based American Airlines Group AAL , which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 thanks to soft oil prices. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report FREIGHTCAR AMER (RAIL): Free Stock Analysis Report To read this article on Zacks.com click here. Despite the fact that most carriers hedge at least some of their fuel costs, the majority of them should still continue to benefit considerably from the steep decline in oil prices.
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8245.0
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2015-10-05 00:00:00 UTC
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Nasdaq 100 Movers: SWKS, MU
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AAL
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https://www.nasdaq.com/articles/nasdaq-100-movers-swks-mu-2015-10-05
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nan
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nan
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In early trading on Monday, shares of Micron Technology ( MU ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 5.5%. Year to date, Micron Technology has lost about 52.0% of its value.
And the worst performing Nasdaq 100 component thus far on the day is Skyworks Solutions ( SWKS ), trading down 1.1%. Skyworks Solutions is showing a gain of 14.3% looking at the year to date performance.
Two other components making moves today are Lam Research ( LRCX ), trading down 1.0%, and American Airlines Group ( AAL ), trading up 2.9% on the day.
VIDEO: Nasdaq 100 Movers: SWKS, MU
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Two other components making moves today are Lam Research ( LRCX ), trading down 1.0%, and American Airlines Group ( AAL ), trading up 2.9% on the day. And the worst performing Nasdaq 100 component thus far on the day is Skyworks Solutions ( SWKS ), trading down 1.1%. Skyworks Solutions is showing a gain of 14.3% looking at the year to date performance.
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Two other components making moves today are Lam Research ( LRCX ), trading down 1.0%, and American Airlines Group ( AAL ), trading up 2.9% on the day. And the worst performing Nasdaq 100 component thus far on the day is Skyworks Solutions ( SWKS ), trading down 1.1%. VIDEO: Nasdaq 100 Movers: SWKS, MU The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Two other components making moves today are Lam Research ( LRCX ), trading down 1.0%, and American Airlines Group ( AAL ), trading up 2.9% on the day. In early trading on Monday, shares of Micron Technology ( MU ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 5.5%. And the worst performing Nasdaq 100 component thus far on the day is Skyworks Solutions ( SWKS ), trading down 1.1%.
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Two other components making moves today are Lam Research ( LRCX ), trading down 1.0%, and American Airlines Group ( AAL ), trading up 2.9% on the day. In early trading on Monday, shares of Micron Technology ( MU ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 5.5%. And the worst performing Nasdaq 100 component thus far on the day is Skyworks Solutions ( SWKS ), trading down 1.1%.
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8246.0
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2015-10-02 00:00:00 UTC
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Nasdaq 100 Movers: AAL, WYNN
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AAL
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https://www.nasdaq.com/articles/nasdaq-100-movers-aal-wynn-2015-10-02
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nan
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nan
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In early trading on Friday, shares of Wynn Resorts ( WYNN ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 14.0%. Year to date, Wynn Resorts has lost about 60.4% of its value.
And the worst performing Nasdaq 100 component thus far on the day is American Airlines Group ( AAL ), trading down 3.7%. American Airlines Group is lower by about 29.6% looking at the year to date performance.
Two other components making moves today are Netflix ( NFLX ), trading down 3.5%, and Micron Technology ( MU ), trading up 6.2% on the day.
VIDEO: Nasdaq 100 Movers: AAL, WYNN
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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And the worst performing Nasdaq 100 component thus far on the day is American Airlines Group ( AAL ), trading down 3.7%. VIDEO: Nasdaq 100 Movers: AAL, WYNN 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 Wynn Resorts ( WYNN ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 14.0%.
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And the worst performing Nasdaq 100 component thus far on the day is American Airlines Group ( AAL ), trading down 3.7%. VIDEO: Nasdaq 100 Movers: AAL, WYNN The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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And the worst performing Nasdaq 100 component thus far on the day is American Airlines Group ( AAL ), trading down 3.7%. VIDEO: Nasdaq 100 Movers: AAL, WYNN 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 Wynn Resorts ( WYNN ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 14.0%.
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And the worst performing Nasdaq 100 component thus far on the day is American Airlines Group ( AAL ), trading down 3.7%. VIDEO: Nasdaq 100 Movers: AAL, WYNN 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 Wynn Resorts ( WYNN ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 14.0%.
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8247.0
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2015-10-02 00:00:00 UTC
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The Economic Impact of the Bank of America Chicago Marathon
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AAL
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https://www.nasdaq.com/articles/economic-impact-bank-america-chicago-marathon-2015-10-02
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nan
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nan
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The Bank of America ( BAC ) Chicago Marathon is one of the largest running events in the world, drawing over 40,000 runners from across the world last year . Only the New York City Marathon draws more runners. Friends, family, and running enthusiasts come from all parts of the globe to watch the participants' 26.2 mile journey through 29 Chicago neighborhoods. The Chicago NBC affiliate places the number of spectators to an estimate of 1.7 million for the 2014 Chicago Marathon.
That number is more than likely to increase for the event on Sunday, October 11 th - maybe even reaching the 2 million spectator mark. Many of the participants and spectators are not from the city. According to data for the 2013 Chicago Marathon per a chicagobusiness.com article , over 10,000 of the participants, or 23% of the field, were from outside the US, coming from 129 different countries. Mexico was the top country with 2,375 participants, and Canada was second with 1,761 participants.
Regarding participants from other US states, the previous article mentions that Indiana, Michigan, New York, and California were the top 4 states with the most participants outside of Illinois. Those numbers were 1,360, 1192, 1155, and 1,074 respectively.
The amount of out-of-state, both national and international, individuals involved with the Chicago Marathon generate serious tourism-related revenue figures. According to a study performed by the University of Illinois at Urbana-Champaign's Regional Economics Applications Laboratory, the 2013 Bank of America Chicago Marathon generated "$253.49 million in total business activity to the Chicago economy," which is an "equivalent of 1,742 full-time jobs and $85.94 million worth of wages and salary income." Furthermore, the economics lab reported the marathon itself "directly contributed to an estimated $101.8 million distributed among the main sectors of the tourism industry, in addition to another $151.7 million in indirect activity."
Whether this "equivalency" directly contributed to full-time jobs for workers after the marathon is rather debatable. However, local business owners, hotels, gratuity-reliant jobs, and the city of Chicago via sales tax revenues, did and will see more moneys pumped into the local economy - primarily in the downtown neighborhoods of The Loop, West Loop, and River North.
Local Charities
The Chicago Marathon each year does provide an increase of monies into the local economy from non-Chicago residents, and if that $250 million is reinvested into the community, it will promote more growth and opportunity for many individuals.
Another way the Chicago Marathon impacts the community is fundraising for charities . The marathon hosts thousands of runners who will run on behalf of a charity of their choosing. In 2014, there were over 10,000 charity runners whom participated in the marathon on behalf of over 190 charities - local, national, and global.
A close friend of mine is a charity runner for a local organization, PAWS Chicago , Chicago's largest no-kill animal shelter, so I am rather familiar of how the process works. When an individual runs for a charity, he or she gets a guaranteed spot in the marathon and do not have to enter the lottery.
To receive this guaranteed spot, the individual must collected a set number of funds for the charity. In the case of running for Team PAWS , pre-lottery members have to raise a minimum of $1,000 and post lottery members have to raise $1,500 in order to have their spot secured. Some charities will also reimburse the runner the marathon registration fee once their goals are met.
At a minimum, the 10,000 charity runners raising $1,000 each generates $10 million for local, national, and global charities. These millions of dollars are directly impacting many communities, especially Chicago ones. The funds generated from these charitable donations help improve the lives of loved ones, improve the local neighborhood, or even generate some jobs for these organizations.
The Sponsors
The Bank of America Chicago Marathon has a many official and affiliated sponsors . There are a few sponsors who should be seeming positive bumps in revenue from the spectacle that is the event. Nike ( NKE ) is an official sponsor for the marathon. They have a line of apparel specifically for this year's Chicago Marathon. It is safe to assume that the majority of runners and spectators will be purchasing a Nike "2015 Chicago Marathon" shirt to commemorate the event.
Gatorade Endurance, a Pepsico Inc. ( PEP ) brand, is the official drink of the Chicago Marathon. Along with another Pepsico product, Aquafina, being a supporting sponsor, it is safe to assume that tens-of-thousands of gallons of Gatorade and water will be consumed during the marathon. If Gatorade Endurance provides the needed nutrients that prevent runners from cramping and dehydration as it claims to do, then it will have lifelong customers who continue to use the product to train and exercise.
All the international and non-regional participants need transportation and a place to stay for the weekend. Hotel giant Hilton ( HLT ) is another official sponsor, and has multiple locations in the Loop and River North neighborhoods. Not only will the prices for the rooms be raised due to marathon, Hilton Hotels are probably at capacity, or very close to it. American Airlines ( AAL ) has international flights and a hub at O'Haire International Airport, so expect the company to have filled flights until a few days after the marathon.
Final Thoughts
In all, the Bank of America Chicago Marathon is a life changing experience for the runners and a memorable trip for hundreds of thousands of individuals to one of the best cities in the United States. Even for a brief moment, local businesses can generate extra revenue to help massage the pain of slower business during the brutal winters. Millions of dollars will be raised for great causes, and the corporate sponsors will buy some good publicity supporting the event; maybe obtain some loyal customers in the process.
Yes, we locals do not enjoy the road closures, crowded L trains, and tourists walking around Michigan Avenue with a selfie stick, completely unaware of their surroundings. But in all, the Chicago Marathon is an exciting event for everyone involved.
(Sources for the photos are here and here )
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NIKE INC-B (NKE): Free Stock Analysis Report
PEPSICO INC (PEP): Free Stock Analysis Report
BANK OF AMER CP (BAC): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
HILTON WW HLDG (HLT): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
American Airlines ( AAL ) has international flights and a hub at O'Haire International Airport, so expect the company to have filled flights until a few days after the marathon. Click to get this free report NIKE INC-B (NKE): Free Stock Analysis Report PEPSICO INC (PEP): Free Stock Analysis Report BANK OF AMER CP (BAC): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report HILTON WW HLDG (HLT): Free Stock Analysis Report To read this article on Zacks.com click here. If Gatorade Endurance provides the needed nutrients that prevent runners from cramping and dehydration as it claims to do, then it will have lifelong customers who continue to use the product to train and exercise.
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Click to get this free report NIKE INC-B (NKE): Free Stock Analysis Report PEPSICO INC (PEP): Free Stock Analysis Report BANK OF AMER CP (BAC): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report HILTON WW HLDG (HLT): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines ( AAL ) has international flights and a hub at O'Haire International Airport, so expect the company to have filled flights until a few days after the marathon. According to a study performed by the University of Illinois at Urbana-Champaign's Regional Economics Applications Laboratory, the 2013 Bank of America Chicago Marathon generated "$253.49 million in total business activity to the Chicago economy," which is an "equivalent of 1,742 full-time jobs and $85.94 million worth of wages and salary income."
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Click to get this free report NIKE INC-B (NKE): Free Stock Analysis Report PEPSICO INC (PEP): Free Stock Analysis Report BANK OF AMER CP (BAC): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report HILTON WW HLDG (HLT): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines ( AAL ) has international flights and a hub at O'Haire International Airport, so expect the company to have filled flights until a few days after the marathon. According to a study performed by the University of Illinois at Urbana-Champaign's Regional Economics Applications Laboratory, the 2013 Bank of America Chicago Marathon generated "$253.49 million in total business activity to the Chicago economy," which is an "equivalent of 1,742 full-time jobs and $85.94 million worth of wages and salary income."
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American Airlines ( AAL ) has international flights and a hub at O'Haire International Airport, so expect the company to have filled flights until a few days after the marathon. Click to get this free report NIKE INC-B (NKE): Free Stock Analysis Report PEPSICO INC (PEP): Free Stock Analysis Report BANK OF AMER CP (BAC): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report HILTON WW HLDG (HLT): Free Stock Analysis Report To read this article on Zacks.com click here. Many of the participants and spectators are not from the city.
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8248.0
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2015-10-02 00:00:00 UTC
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JetBlue Airways Turns From Laggard To Head Of Pack
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AAL
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https://www.nasdaq.com/articles/jetblue-airways-turns-laggard-head-pack-2015-10-02
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nan
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nan
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I n an industry of vanished perks,JetBlue Airways ( JBLU ) has long stood out from its peers for offering everyday amenities, such as generous leg room and free baggage checks, at no extra cost.
It famously led the way in placing TVs in front of passenger seats, now ubiquitous on most airlines.
But going the extra mile for passengers didn't translate into extra dollars, analysts and investors complained. Unit revenue and ancillary sales, which include baggage fees, lagged peers.
"The fact of the matter is, customers have not shown a willingness to pay more for a better product," said Jim Corridore, airline equity analyst with S&P Capital IQ.
JetBlue isn't lagging peers anymore. "It's clearly outperforming at this point," said Helane Becker, an analyst with Cowen & Co.
"Unit revenue has outperformed the industry. Their balance sheet has improved dramatically. You can see that in the stock price," up about 63% year-to-date.
What changed? JetBlue's relatively weak financial and stock performances led to a series of changes that cut away some perks and added a premium business class at a price below rivals.
Several executives left last year, followed by the announcement in September that CEO Dave Barger would leave when his contract expired in February of this year.
New Captain, New Initiatives
He was replaced by company executive Robin Hayes, a former British Airways executive, who also holds the title of president.
Under Barger's final months, the firm implemented some new initiatives to get customers to pay up for more, such as a premium "Mint" business-class service launched in mid-2014 on flights between New York and the West Coast. It'll be expanded to flights between Boston and San Francisco in March.
At the end of June, JetBlue started charging for bags that used to fly free, part of "Fare Options," a new tiered pricing scheme that still includes free checked bag options.
For this past September, Deutsche Bank projects that JetBlue will have been the only airline of the top six U.S.-based carriers to show a year-over-year increase in passenger revenue per available seat mile -- up an estimated 2%. It forecast declines of 3.5% atSouthwest Airlines ( LUV ) and up to 7% declines atAmerican Airlines ( AAL ).
On Friday,Delta Air Lines ( DAL ) was the first of the carriers to report on September: unit revenue was down 5%.
Beginning in mid-2016, JetBlue will add 15 more seats to A320 aircraft, for a total of 165 seats. But analysts say that its leg room will still be more generous than the competition's.
JetBlue says that all of the new initiatives will add $450 million in operating income, starting in 2017.
In a research note last month, the Buckingham Research Group estimated that the current Mint service alone likely generates an incremental $120 million in revenue and 10 cents per share annually. If expanded to the airline's other routes of 2,000 miles or more, the report noted, it could translate to $500 million in incremental revenue and 40 cents in earnings.
JetBlue is the fifth largest U.S.-based airline by revenue, after Delta, American,United Continental ( UAL ) and Southwest.
The New York-based carrier flies to more than 90 cities in the U.S., the Caribbean and Latin America. Its leading markets are New York, Boston, Fort Lauderdale, Los Angeles, Orlando and San Juan, Puerto Rico. Service to Mexico City launched on Oct. 1 from Orlando and Fort Lauderdale.
JetBlue is essentially positioned between the consolidated legacy carriers, with their extensive routes, and ultralow-fare airlines such asSpirit Airlines (SAVE) andAllegiant Travel (ALGT), which boost cheap fares with add-on fees.
"It still has lower costs than peers, but it is not a low-fare carrier in the traditional sense," Corridore said.
While changes made so far have already had a positive impact on JetBlue's financial performance, so have lower fuel costs and easing competition in key markets.
JetBlue is benefiting from rivals' relatively low-capacity increases in its key markets New York, Boston and Fort Lauderdale, Becker says.
While capacity increases are up around 3% in JetBlue markets, she adds, the airlines' average is somewhat higher, and some markets such as Seattle and Dallas are up in the double digits.
"Nobody's really been growing aggressively in New York and Boston and to some extent Fort Lauderdale, which are all big markets for JetBlue," she said.
Operating income in the second quarter doubled from a year earlier to $282 million. Per-share earnings jumped 132% to 44 cents per share.
Passenger revenue per available seat mile -- a closely watched metric in the airline industry -- increased 1.4%. Revenue passenger miles rose 8.7% on a capacity increase of 7.5%, for a load factor of 85.6%, up 1 percentage point.
Meanwhile, JetBlue's operating expense per available seat mile decreased 8.6%. Excluding fuel and profit sharing, it rose a slight 0.6%.
With lower oil prices and only 19% of its fuel consumption hedged, JetBlue's realized fuel price in the quarter fell 31% to $2.13 per gallon.
Oil Eases Slower Sales Growth
Lower-priced oil -- down more than 60% from a year ago -- is a "good trade-off" to slower growing airline-industry revenue this year, Corridore says. Jet fuel accounts for a third of an airline's costs.
With domestic revenue growth slowing, capacity growth in the industry will remain tempered, analysts say. That's unlike past stretches following oil-price declines, when airlines would order new planes using their excess cash.
Now U.S. carriers (JetBlue included) have been using excess cash to buy back shares and pay down debt, noted Goldman Sachs analysts in a report on Sept. 30.
Still, JetBlue expects capacity to increase at the high end of its 7%-to-9% range for the full year. It sees operating expenses per available seat mile rising 0% to 1.5%, excluding fuel and profit-sharing.
The airline's earnings for the year are seen as growing 170% over last year to $1.89 per share, according to Thomson Reuters.
More tailwinds could be ahead for JetBlue. The carrier's strong presence in Florida, especially South Florida, should put it in a favorable competitive position when travel to Cuba opens, Corridore says. "Cuba could be a lucrative market for them," he said.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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It forecast declines of 3.5% atSouthwest Airlines ( LUV ) and up to 7% declines atAmerican Airlines ( AAL ). I n an industry of vanished perks,JetBlue Airways ( JBLU ) has long stood out from its peers for offering everyday amenities, such as generous leg room and free baggage checks, at no extra cost. Under Barger's final months, the firm implemented some new initiatives to get customers to pay up for more, such as a premium "Mint" business-class service launched in mid-2014 on flights between New York and the West Coast.
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It forecast declines of 3.5% atSouthwest Airlines ( LUV ) and up to 7% declines atAmerican Airlines ( AAL ). I n an industry of vanished perks,JetBlue Airways ( JBLU ) has long stood out from its peers for offering everyday amenities, such as generous leg room and free baggage checks, at no extra cost. At the end of June, JetBlue started charging for bags that used to fly free, part of "Fare Options," a new tiered pricing scheme that still includes free checked bag options.
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It forecast declines of 3.5% atSouthwest Airlines ( LUV ) and up to 7% declines atAmerican Airlines ( AAL ). For this past September, Deutsche Bank projects that JetBlue will have been the only airline of the top six U.S.-based carriers to show a year-over-year increase in passenger revenue per available seat mile -- up an estimated 2%. JetBlue is essentially positioned between the consolidated legacy carriers, with their extensive routes, and ultralow-fare airlines such asSpirit Airlines (SAVE) andAllegiant Travel (ALGT), which boost cheap fares with add-on fees.
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It forecast declines of 3.5% atSouthwest Airlines ( LUV ) and up to 7% declines atAmerican Airlines ( AAL ). If expanded to the airline's other routes of 2,000 miles or more, the report noted, it could translate to $500 million in incremental revenue and 40 cents in earnings. While changes made so far have already had a positive impact on JetBlue's financial performance, so have lower fuel costs and easing competition in key markets.
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8249.0
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2015-10-01 00:00:00 UTC
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American Airlines Nears Pay-Hike Deal with Service Staff
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AAL
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https://www.nasdaq.com/articles/american-airlines-nears-pay-hike-deal-with-service-staff-2015-10-01
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nan
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nan
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There have been quite a few updates on labor deals (albeit tentative) in the airline space, of late. Soon after Southwest Airlines Inc. LUV and Republic Airways Holdings Inc. RJET inked provisional deals with their respective pilot unions pertaining to pilots' pay and work rules among other things, American Airlines GroupAAL recently announced a tentative pay-related agreement with the union representing its reservations and gate agents.
The tentative deal between the Fort Worth, TX-based carrier and the Communications Workers of America and International Brotherhood of Teamsters (CWA-IBT) is deemed a key positive toward the successful integration of the workforce of American Airlines and US Airways. The CWA-IBT represents the gate and ticket agents, Premium Service representatives, Reservations representatives and Travel Center representatives of the carrier and boasts more than 14,000 workers. We note that the workers were not unionized previously and came under the CWA-IBT umbrella only last year.
Following the tentative agreement on a new joint collective bargaining agreement, the above workers will vote on the same after a thorough review. The contract, if accepted, will ensure significant pay hikes, apart from job security and improved work rules, for the passenger service agents at American Airlines.
We note that American Airlines already has contract deals with its pilots and flight attendants. We won't be surprised if the outcome of the ratification voting procedure is positive in this case too. With American Airlines Group enjoying solid financial health, courtesy low oil prices , employees are naturally looking for higher pay and benefits.
Zacks Rank
American Airlines 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).
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SOUTHWEST AIR (LUV): Free Stock Analysis Report
REPUBLIC AIRWAY (RJET): 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.
|
Soon after Southwest Airlines Inc. LUV and Republic Airways Holdings Inc. RJET inked provisional deals with their respective pilot unions pertaining to pilots' pay and work rules among other things, American Airlines GroupAAL recently announced a tentative pay-related agreement with the union representing its reservations and gate agents. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report REPUBLIC AIRWAY (RJET): 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 tentative deal between the Fort Worth, TX-based carrier and the Communications Workers of America and International Brotherhood of Teamsters (CWA-IBT) is deemed a key positive toward the successful integration of the workforce of American Airlines and US Airways.
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Soon after Southwest Airlines Inc. LUV and Republic Airways Holdings Inc. RJET inked provisional deals with their respective pilot unions pertaining to pilots' pay and work rules among other things, American Airlines GroupAAL recently announced a tentative pay-related agreement with the union representing its reservations and gate agents. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report REPUBLIC AIRWAY (RJET): 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. A better-ranked stock in the airline space is Delta Air Lines DAL , sporting a Zacks Rank #1 (Strong Buy).
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Soon after Southwest Airlines Inc. LUV and Republic Airways Holdings Inc. RJET inked provisional deals with their respective pilot unions pertaining to pilots' pay and work rules among other things, American Airlines GroupAAL recently announced a tentative pay-related agreement with the union representing its reservations and gate agents. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report REPUBLIC AIRWAY (RJET): 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 tentative deal between the Fort Worth, TX-based carrier and the Communications Workers of America and International Brotherhood of Teamsters (CWA-IBT) is deemed a key positive toward the successful integration of the workforce of American Airlines and US Airways.
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Soon after Southwest Airlines Inc. LUV and Republic Airways Holdings Inc. RJET inked provisional deals with their respective pilot unions pertaining to pilots' pay and work rules among other things, American Airlines GroupAAL recently announced a tentative pay-related agreement with the union representing its reservations and gate agents. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report REPUBLIC AIRWAY (RJET): 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. A better-ranked stock in the airline space is Delta Air Lines DAL , sporting a Zacks Rank #1 (Strong Buy).
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8250.0
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2015-09-28 00:00:00 UTC
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What Is The Economy of Things?
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AAL
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https://www.nasdaq.com/articles/what-economy-things-2015-09-28
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nan
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nan
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T
he Internet of Things (IoT) has already begun the process of “digitizing the physical world,” in the McKinsey Global Institute’s phrasing. Right now, billions of interconnected sensors are busily spouting data on acceleration, temperature, location, power consumption and other variables, with minimal human intervention. IDC predicts that 30 billion devices will come online by 2020—close to four per person, using UN world population forecasts.
Soon enough, machines will generate more data through their own passive operations than humans will through active use. IDC estimated that in 2012, machine-generated data accounted for 30% of the “digital universe”; in 2011, the figure was 24%. The digital universe is itself ballooning, with a tenfold increase from 4.4 zettabytes in 2013 to 44 zettabytes expected by 2020. To say that this is equal to 44 trillion gigabytes is impressive, but abstract. Put another way, 42 zettabytes would be sufficient to store audio recordings of every word ever spoken by every human being who has ever lived.
Those who manage to organize and analyze this ocean of information will be able to gain ever more exquisite insights into the functioning of bodies, cars (a few of which already have all the sensor-generated information they need to run autonomously), homes, factories, supply chains—just about anything. This will in turn help them to reduce waste, prune inefficiencies, scope out shortcuts and generally improve the way systems operate. When it comes to the IoT, the axiom “knowledge is power” is more than a metaphor.
The Economy of Things
In a report for the IBM Institute for Business Value, Veena Pureswaran and Dr. Robin Lougee have taken a crack at characterizing and quantifying what they call the Economy of Things, the business end of the IoT. If the IoT is “digitizing the physical world,” then the Economy of Things represents the “liquification of the physical world.”
Pureswaran describes the thought behind that terminology: “the hypothesis here was that several industries have benefited greatly from digitization and the internet, and it’s very likely that the internet of things will bring that same benefit to the physical world, to industries that have typically had greater physical constraints, suffered from much more obstruction of information, and have typically lacked this idea of a more liquid marketplace.”
By way of historical analogy, the report detailed the effect of digitization on the airline industry. Partnering with American Airlines (AAL), IBM (IBM) began developing the Semi-Automated Booking & Reservations Engine (SABRE) in 1953. The effects of this innovation were muted prior to regulatory changes in 1978, but from that point on, air travel became “one of the first markets where every physical asset was digitized and placed into a single global online marketplace,” in the words of the report. Air fares roughly halved between 1978 and today. Planes that flew half-full for 6-7 hours a day now fill 85-90% of seats and fly 14 hours per day.
This transformation of the airline industry provides the conceptual framework for Pureswaran’s and Lougee’s study. For them, the Economy of Things will have three broad effects: “creating asset marketplaces,” “managing risk” and “improving efficiency.” SABRE highlights at least two of these, creating marketplaces for seats and improving efficiency by filling more seats and spending more time in the air.
The authors were not content to rely on analogy, however. “To understand this better we wanted to be able to model this quantitatively,” says Pureswaran, “so we worked with the Oxford Economics Institute on the actual economic modeling. The goal of the modeling exercise was to understand what the impact on different industries will be. We actually selected five industries for our case study. Three of them made it to the report.”
The three industries that appear in the paper are commercial real estate in the US, small and medium business lending in South Africa and agriculture in the US. The other two are SMB lending in Latin America and trucking and haulage in the US. Data assets are available to download for all five models (zip), including explanations of assumptions and adjustable parameters that give some color to the forecasts.
Creating Asset Marketplaces: US Commercial Real Estate
Only around 67% of the US’s 12 billion square feet of commercial real estate is utilized. The IoT, however, promises to make office space taggable, indexable and searchable in real time, so that an empty conference room can become a classroom, for example. The practice of hot-desking, in which there are fewer desks than employees—Deloitte’s new hyper-green Amsterdam office has only 4 desks for every 10 employees—could further improve efficiency through the process Oxford Economics’ Andrew Tessler calls “uberization” in the study’s data assets.
These and other adjustments could lead, the authors forecast, to a 39% increase in virtual capacity, based on a 50% adoption rate of IoT technologies. This in turn suggests a 42% drop in rents and a $128 billion net industry benefit. Lessors would not be so lucky, losing an estimated $14 billion.
Managing Risk: SMB Loans In South Africa
In South Africa, less than half of small and medium businesses (SMBs) operate in the formal economy. Since it is difficult to assess informal businesses’ credit risk, banks are reluctant to lend to them, and many informal SMBs therefore resort to higher-priced lenders or forgo borrowing altogether. The IoT could invigorate this sector, according to the report: “Combining device instrumentation, digital money, GPS logs and social networks, it will be possible for financial institutions to build much more accurate pictures of risk and simultaneously reduce the cost of repossession.”
Assuming 50% adoption of IoT technologies, the results could be dramatic: a $10 billion credit infusion could drive average interest rates down by 1% and boost GDP by 0.8% by 2020.
Improving Efficiency: US Agriculture
Farmers everywhere must contend with fickle odds. High-tech fertilizers and pesticides, genetically spruced-up seeds, fancy equipment and libraries worth of knowledge about soil and weather patterns help, but they did not stop US average corn-for-grain yield from swinging by 39% (upwards, thankfully) between 2012 and 2014.
Dr. Lougee, who contributed this section to the report, writes that by analyzing real-time data from sensors and drones, farmers can apply site-specific treatments, a process that could in large part be automated. Given the abundance of arable land in North America, US farmers have focused more on maximizing output per worker, rather than per acre. If the US were to catch up to northwest European yields through IoT innovation, however, food prices could drop 6% by 2020, boosting real GDP by 2%.
Who Benefits?
The question is, when all of this value is unlocked, who benefits? The answer, to the extent anyone knows, is not so simple. Take the historical precedent we began with, SABRE. Huge gains in efficiency did not translate into prosperity for airlines; collectively, the industry has not turned a profit since 1978. Most have filed for bankruptcy at one point or another. When American Airlines spun SABRE off in 1999, it was worth more than the parent company.
This would indicate that those who develop the data-processing tools that undergird the Economy of Things will reap the greatest reward. They certainly have their work cut out for them. McKinsey’s report on the IoT shows just how much data is typically lost before it can contribute to the decision-making process. Surveying an oil rig, they found that 40% is simply not stored; only about 1% is streamed onshore; this tiny subset is then carved up into a few metrics, which are analyzed retrospectively, not in real time.
Looking at this funnel, one marvels at the wasted potential of these 30,000 sensors. What if their garbled data could be effectively tagged, organized and analyzed in real time? IBM, AT&T (T), Cisco (CSCO), GE (GE) and Intel (INTC) would like to find out. In March 2014 they founded the Industrial Internet Consortium to explore real-world applications for the IoT, develop standards and best practices, address security gaps and facilitate the exchange of ideas related to the IoT.
There may also be an opportunity for chip makers, who are worse for wear due to flagging global demand. The SPDR S&P Semiconductor ETF (XSD) is down 7% year to date and nearly 19% this quarter. Sales may not recover up for a couple of years yet, but long-term prospects are brighter: PWC projects a 10.4% compound annual growth rate for sales of sensors and actuators through 2019; this is the segment of the semiconductor industry most associated with the IoT.
As with the regular-old internet, though, much of the windfall from the IoT is likely to be diffuse. As Pureswaran puts it, “At a macroeconomic level, we all end up winners.”
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Partnering with American Airlines (AAL), IBM (IBM) began developing the Semi-Automated Booking & Reservations Engine (SABRE) in 1953. The effects of this innovation were muted prior to regulatory changes in 1978, but from that point on, air travel became “one of the first markets where every physical asset was digitized and placed into a single global online marketplace,” in the words of the report. High-tech fertilizers and pesticides, genetically spruced-up seeds, fancy equipment and libraries worth of knowledge about soil and weather patterns help, but they did not stop US average corn-for-grain yield from swinging by 39% (upwards, thankfully) between 2012 and 2014.
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Partnering with American Airlines (AAL), IBM (IBM) began developing the Semi-Automated Booking & Reservations Engine (SABRE) in 1953. For them, the Economy of Things will have three broad effects: “creating asset marketplaces,” “managing risk” and “improving efficiency.” SABRE highlights at least two of these, creating marketplaces for seats and improving efficiency by filling more seats and spending more time in the air. Three of them made it to the report.” The three industries that appear in the paper are commercial real estate in the US, small and medium business lending in South Africa and agriculture in the US.
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Partnering with American Airlines (AAL), IBM (IBM) began developing the Semi-Automated Booking & Reservations Engine (SABRE) in 1953. If the IoT is “digitizing the physical world,” then the Economy of Things represents the “liquification of the physical world.” Pureswaran describes the thought behind that terminology: “the hypothesis here was that several industries have benefited greatly from digitization and the internet, and it’s very likely that the internet of things will bring that same benefit to the physical world, to industries that have typically had greater physical constraints, suffered from much more obstruction of information, and have typically lacked this idea of a more liquid marketplace.” By way of historical analogy, the report detailed the effect of digitization on the airline industry. For them, the Economy of Things will have three broad effects: “creating asset marketplaces,” “managing risk” and “improving efficiency.” SABRE highlights at least two of these, creating marketplaces for seats and improving efficiency by filling more seats and spending more time in the air.
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Partnering with American Airlines (AAL), IBM (IBM) began developing the Semi-Automated Booking & Reservations Engine (SABRE) in 1953. If the IoT is “digitizing the physical world,” then the Economy of Things represents the “liquification of the physical world.” Pureswaran describes the thought behind that terminology: “the hypothesis here was that several industries have benefited greatly from digitization and the internet, and it’s very likely that the internet of things will bring that same benefit to the physical world, to industries that have typically had greater physical constraints, suffered from much more obstruction of information, and have typically lacked this idea of a more liquid marketplace.” By way of historical analogy, the report detailed the effect of digitization on the airline industry. For them, the Economy of Things will have three broad effects: “creating asset marketplaces,” “managing risk” and “improving efficiency.” SABRE highlights at least two of these, creating marketplaces for seats and improving efficiency by filling more seats and spending more time in the air.
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8251.0
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2015-09-28 00:00:00 UTC
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Southwest Airlines' Business Travel Appeal Has Limits
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AAL
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https://www.nasdaq.com/articles/southwest-airlines-business-travel-appeal-has-limits-2015-09-28
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nan
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nan
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Last week, Fortune ran a very interesting story on how Southwest Airlines has been reinventing itself to appeal more to business travelers. Management sees long-haul travel and the business travel market as key areas where Southwest can grow as short-haul leisure travel demand declines.
Southwest Airlines is chasing more business travelers.
Southwest certainly has been retooling its business in the past few years, and the trend toward flying longer routes is very clear. However, the Fortune article overstates the extent to which Southwest is vying for business travelers.
In cities where Southwest is the leading airline, the carrier should be able to win over plenty of business travelers -- and in many cases, it already has. But across most of the country, Southwest isn't a big threat to American Airlines , Delta Air Lines , and United Continental in the business travel market.
Southwest has bulked up in big cities
Southwest Airlines has changed dramatically in the last 10 years. In 2005, it didn't fly to major cities like Atlanta, Denver, and Minneapolis -- and it only served huge metropolises including New York, Boston, Washington, D.C., and San Francisco through secondary (and typically inconvenient) airports. Today, Southwest flies to all of those cities' main airports.
By entering these key airports, Southwest has put itself in much better position to court business travelers as well as leisure travelers. But it has come at a price. These airports tend to be more expensive to operate at, raising costs, and are congested, leading to more delays (or forcing Southwest to build extra time into its schedule -- which also raises costs).
Sure enough, Southwest's non-fuel cost per available seat mile has risen from $0.0637 in 2005 to $0.0822 in 2014 (or $0.0852, including the impact of profit sharing).
Despite this big increase in costs, Southwest has been earning record profits recently. That's due in part to a less cutthroat competitive environment, but it also has a lot to do with Southwest's increased presence in the top U.S. business and population centers.
Legacy carriers have an edge with businesses
There's more to winning business travelers than having a presence in big cities, though. Most importantly, American Airlines, Delta, and United all have significantly broader route networks than Southwest Airlines. All three legacy carriers serve more than 300 destinations, compared to about 100 for Southwest. That makes them one-stop shops for corporate travel departments.
Legacy carriers have massive route networks compared to Southwest. Image source: American Airlines.
It's not a fluke that American, Delta, and United serve vastly more destinations. One key way that Southwest keeps its costs down is by operating a uniform fleet of Boeing 737s. However, these planes are too big to serve small cities and don't have enough range to fly more than about 3,000 miles. To offer comprehensive route networks, the legacy carriers need lots of different aircraft types, adding complexity and cost.
The legacy carriers also offer costly perks that are valued by frequent fliers, including first class and extra-legroom seats, airport lounges, and concierge-type services. Southwest keeps its costs down by sticking to the basics.
Finally, even in its biggest markets, Southwest doesn't offer as many flights as legacy carriers do at their hubs. For example, Chicago is Southwest's top city, with 247 daily departures. However, American Airlines and United Airlines both operate hubs in Chicago with roughly twice as many daily flights as Southwest.
Where Southwest can succeed
Thus, American Airlines, Delta Air Lines, and United Continental still have significant advantages over Southwest in competing for business travelers' loyalty. Most business travelers won't sacrifice their lounge access, first class upgrades, and numerous flight options for free checked bags. (Frequent travelers can usually get baggage fees waived, anyway.)
However, in cities where Southwest is the No. 1 airline, it should be able to snag a high share of the corporate travel market. Industry consolidation has led to a big drop in the number of airline hubs, so Southwest is now the top airline in many cities, including some pretty big ones like San Diego, Las Vegas, St. Louis, Nashville, Baltimore, Tampa, and Orlando.
Business travelers may like fancy perks, but what they really need is to get where they are going as quickly and conveniently as possible. If the choice is between a nonstop flight on Southwest and a connection on a legacy carrier -- even in first class! -- most business travelers would prefer the former.
Thus, if Southwest Airlines wants to attract more business travelers, its best play is to keep adding connections to top business markets from the cities where it is already the biggest airline in town. In their hub markets, the legacy carriers are the clear choice for most business travelers -- and will remain so for the foreseeable future.
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The article Southwest Airlines' Business Travel Appeal Has Limits originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of The Boeing Company and 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 has no position in any of the stocks mentioned. 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.
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But across most of the country, Southwest isn't a big threat to American Airlines , Delta Air Lines , and United Continental in the business travel market. In 2005, it didn't fly to major cities like Atlanta, Denver, and Minneapolis -- and it only served huge metropolises including New York, Boston, Washington, D.C., and San Francisco through secondary (and typically inconvenient) airports. The legacy carriers also offer costly perks that are valued by frequent fliers, including first class and extra-legroom seats, airport lounges, and concierge-type services.
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But across most of the country, Southwest isn't a big threat to American Airlines , Delta Air Lines , and United Continental in the business travel market. Where Southwest can succeed Thus, American Airlines, Delta Air Lines, and United Continental still have significant advantages over Southwest in competing for business travelers' loyalty. Adam Levine-Weinberg owns shares of The Boeing Company and United Continental Holdings, and is long November 2015 $40 calls on American Airlines Group and long January 2017 $40 calls on Delta Air Lines.
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But across most of the country, Southwest isn't a big threat to American Airlines , Delta Air Lines , and United Continental in the business travel market. Where Southwest can succeed Thus, American Airlines, Delta Air Lines, and United Continental still have significant advantages over Southwest in competing for business travelers' loyalty. Thus, if Southwest Airlines wants to attract more business travelers, its best play is to keep adding connections to top business markets from the cities where it is already the biggest airline in town.
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However, these planes are too big to serve small cities and don't have enough range to fly more than about 3,000 miles. The legacy carriers also offer costly perks that are valued by frequent fliers, including first class and extra-legroom seats, airport lounges, and concierge-type services. Thus, if Southwest Airlines wants to attract more business travelers, its best play is to keep adding connections to top business markets from the cities where it is already the biggest airline in town.
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8252.0
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2015-09-25 00:00:00 UTC
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Delta Pounces on American Airlines' Exit from Tel Aviv
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AAL
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https://www.nasdaq.com/articles/delta-pounces-american-airlines-exit-tel-aviv-2015-09-25
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nan
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nan
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Last month, American Airlines announced that it will drop its daily flights between Philadelphia and Tel Aviv in January. That will leave the world's largest airline with no flights to Israel.
American Airlines will end its Philadelphia-Tel Aviv flights in January. Source: American Airlines.
Just a month later, American's rival Delta Air Lines announced that it will expand its flight schedule to Tel Aviv. Delta currently offers daily service to Tel Aviv from New York's JFK Airport, and as of May, it will add four weekly flights on that route, bringing it to 11 weekly flights.
Why is Delta so interested in growing in a foreign market where American Airlines faced persistent losses? It all comes down to Delta's position as the No. 1 international airline in New York, the top business destination in the U.S. and the epicenter of the U.S. Jewish community.
American Airlines struggles in Israel
American Airlines' merger partner, US Airways, began the Philadelphia-Tel Aviv flights in 2009 as part of a push to make Philadelphia its primary international gateway. However, the flights consistently lost money, including more than $20 million just this year.
US Airways had hoped that merging with American Airlines -- and thus expanding the airline's route network -- would improve results for the Tel Aviv flights. It later hoped that lower fuel prices would be the difference-maker.
Yet neither of these factors had the desired impact because more than 70% of passengers on the flights were connecting from elsewhere. Connecting traffic is far less lucrative for airlines. First, customers have lots of choices of where (and on what airline) to connect, keeping a lid on fares. Second, the airline has to cover the extra cost of the connecting flight.
This was a perennial issue at US Airways. The company acknowledged that its hub markets had lower travel demand than competitors' hubs -- and it offset this weakness by paying its workers less. The merger with American Airlines allowed US Airways employees to get pay more in line with industry standards. But this magnified the problems of some legacy US Airways routes that continued to suffer from weak local demand.
No such problems for Delta
By contrast, Delta Air Lines benefits from its strong position in New York. The airline offers 207 peak-day departures at JFK Airport to 92 destinations, and it also operates a sizable domestic hub 10 miles away at LaGuardia Airport. That's not nearly as big as American Airlines' hub in Philadelphia, but it's enough to provide connections to most major cities in the U.S.
Delta has built up a strong presence in New York.
More importantly, the Jewish population of New York City, Long Island, and Westchester County -- JFK Airport's approximate target market -- is more than 1.5 million. That's many times larger than Philadelphia's Jewish community. New York is also the most important business market in the U.S.
All of this means there is tons of local demand for New York-Tel Aviv flights. That provides a large base of relatively high-fare traffic that can make Delta's flights profitable.
With more flights, Delta should be able to gain share -- particularly in the lucrative corporate market -- on the New York-Tel Aviv route. Delta's current New York-Tel Aviv flight departs in the late evening and arrives the following day in the late afternoon. On the other hand, the new flight will leave New York in the afternoon, arriving in Tel Aviv in the morning.
The current schedule may work for leisure travelers, but the extra flights will be more convenient for most business travelers, since they won't lose a full business day traveling to Israel. Delta's potential ability to poach some of American Airlines' Tel Aviv traffic is an added bonus.
The power of New York
This example showcases the immense value of having a big global hub in New York. While the large Jewish population in the New York area adds to demand for flights to Israel, New York is a massive travel market -- period. With strong local demand there, airlines can get a good mix of local and connecting traffic on long-haul routes.
Other cities can't offer as favorable a mix of traffic. Philadelphia is not a small city by any means -- it is the sixth-largest metro area in the U.S., with a population of about 6 million -- but its local demand can only support flights on a handful of the busiest international routes. Tel Aviv simply didn't make the cut.
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The article Delta Pounces on American Airlines' Exit from Tel Aviv 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 has no position in any of the stocks mentioned. 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.
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More importantly, the Jewish population of New York City, Long Island, and Westchester County -- JFK Airport's approximate target market -- is more than 1.5 million. Philadelphia is not a small city by any means -- it is the sixth-largest metro area in the U.S., with a population of about 6 million -- but its local demand can only support flights on a handful of the busiest international routes. To learn more about what The Motley Fool thinks about current investment trends, and receive a special free report about what might be the next big industry to come out of Silicon Valley, just click here now .
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Just a month later, American's rival Delta Air Lines announced that it will expand its flight schedule to Tel Aviv. Delta currently offers daily service to Tel Aviv from New York's JFK Airport, and as of May, it will add four weekly flights on that route, bringing it to 11 weekly flights. 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 has no position in any of the stocks mentioned.
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Delta currently offers daily service to Tel Aviv from New York's JFK Airport, and as of May, it will add four weekly flights on that route, bringing it to 11 weekly flights. American Airlines struggles in Israel American Airlines' merger partner, US Airways, began the Philadelphia-Tel Aviv flights in 2009 as part of a push to make Philadelphia its primary international gateway. US Airways had hoped that merging with American Airlines -- and thus expanding the airline's route network -- would improve results for the Tel Aviv flights.
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Last month, American Airlines announced that it will drop its daily flights between Philadelphia and Tel Aviv in January. US Airways had hoped that merging with American Airlines -- and thus expanding the airline's route network -- would improve results for the Tel Aviv flights. Connecting traffic is far less lucrative for airlines.
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8253.0
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2015-09-24 00:00:00 UTC
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The Search For Boeing's MOM
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AAL
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https://www.nasdaq.com/articles/search-boeings-mom-2015-09-24
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nan
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nan
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By Aspire Aviation :
As aviation professionals descended into the 'City of Light' for the biennial Paris Air Show, much of the buzz was centred on Boeing's middle of market (( MOM )) aircraft. John Wojick, senior vice president (SVP) for global sales and marketing at Boeing ( BA ), confirmed in an interview prior to the air show that the Seattle-based planemaker is indeed moving forward with a study of an all-new commercial jet tentatively earmarked for entry into service in the middle of the next decade. This potential MOM aircraft would be sized between current single and twin-aisle offerings and supersede the discontinued Boeing 757 family.
Production for the old 757 ended more than a decade ago. However, it remains somewhat of a darling with US carriers on transcontinental routes and other transatlantic long-haul routes that do not justify the use of a larger aircraft.
The upcoming MOM is expected to be a clean-sheet design; developed from scratch, rather than being a derivative of an existing model. Brand new airplanes are a rare occurrence; so even a rumoured launch several years down the line brings much fanfare. Boeing's previous jet, the 787 Dreamliner was announced in 2003, and the one prior to that, the 777, was launched in 1990.
Having held high-level talks with airline customers and industry professionals, Wojick's team has identified the key attributes that are expected from this latest offering from Boeing. "Our customers tell us they want an airplane that is bigger than the 757 and flies farther," said Wojick. "It would be very efficient operating domestically in the continental U.S. or China, and regionally as well in Southeast Asia and Europe. It could fly from the East Coast of the U.S. to many destinations in Europe." Wojick stressed that current interest stems from a broad customer base, ranging from established incumbents such as American ( AAL ), Delta ( DAL ) and United ( UAL ) to smaller low-cost carriers.
(click to enlarge)
Image Courtesy of Boeing
This makes a departure for Boeing from its stance from last year, when Boeing's chief executive at the time, Jim McNerney, said the company would take no more 'moonshots' in the form of an entirely new aircraft. This change of heart is most likely due to mounting pressure from archrival Airbus (EADSY). The Toulouse-based planemaker has a MOM offering in the form of the A321LR, a stretched version of its next generation A320neo family with more efficient engines.
Due for an entry to service date sometime in 2019, the A321LR has been hailed by Airbus as having the longest range of any narrow-body jet. The aircraft can be configured to seat up to 240 passengers, and with a range of 4,000 nautical miles (nm), the aircraft would be suitable for transatlantic routes, as well as Southeast Asia-Australia ones.
Meanwhile, according to analysts from Bank of America/Merrill Lynch, the Boeing MOM offering would seat between 200-270 passengers and have a range of between 3,000-5,000 nautical miles. Based on a patent filing by Boeing (US2010/0200697 A1), it is possible that this MOM aircraft would adopt an oval fuselage instead of a conventional circular one.
From an aerodynamic point of view, for a given cabin width, the aircraft would be subjected to less parasitic drag if an oval cross-section fuselage is chosen. In light of this enhanced cabin width, it is expected that the aircraft would be a twin-aisle offering, possibly seating passengers in a 2-3-2 configuration in economy and 1-2-1 or 2-2-2 in premium cabins.
It is speculated that the MOM aircraft would have an aluminium body with composite wings, similar to the 777X. The MOM programme is however expected to be not as technologically ambitious as the 787 Dreamliner, on which entry to service suffered delays of more than 3 years due to glitches plaguing its lineup of cutting-edge technologies.
The Bank of America/Merrill Lynch analysis puts the fuel cost per available seat mile ((ASM)) of the "7M7" at 3.59 US cents on an average of 246 seats, lower than the 737-800's 3.76 US cents per ASM and 777-300ER's 4.55 US cents after factoring in a 15% step-change in fuel efficiency.
The 2,207 figure was derived from an assumption of 57% of the 3,453 airport pairs, or 1,977 pairs less than 5,000nm a part would be served by the MOM accommodating 200-270 seats. Yet where such a demand exists does not necessarily mean it is best served by the MOM as suggested, given the load factor, realistic airline use, belly cargo and en-route wind considerations.
The re-engined A330-800neo and A330-900neo, for example, will have 252 seats and 310 seats in a standard 2-class configuration, consisting of 36 Business and 216 Economy seats for the former and 36 Business and 274 Economy seats for the latter. Assuming an average of 80% load factor yields 201 seats and 248 seats for the -800neo and -900neo, respectively.
Further factoring in airlines typically have less dense configurations than airframers' standards, it is easy to see which aircraft realistically serves the market well, not the least to mention it is problematic to build a route's business case using a 100% load factor that inevitably leads to demand spill and revenue that is not maximised in accordance to the forward-booking curve with dynamic, changing demand forecasted by the origin and destination-based (O&D) revenue management system (RMS).
(click to enlarge)
Airlines' ability to make full use of the aircraft's performance on transatlantic routes is further hindered by payload restrictions and en-route winds. On the London Heathrow-Los Angeles route, for instance, which stretches an average of 4,980nm in equivalent still air distance (ESAD) using North Atlantic tracks, existing widebodies already face some considerable payload restrictions.
For a 3-class, 210-seat A330-200 with an actual take-off weight (TOW) of 513,409lbs, it would operate at a useful payload inclusive of passengers and cargo at 74,482lbs, or having just 69.1% of the maximum structural payload of 107,755lbs being available, assuming an average headwind of 17 knots.
January 2015 also saw the fiercest North Atlantic winds in over 25 months with a British Airways 777-200ER reportedly catching a tailwind in excess of 173 knots on the eastbound New York John F. Kennedy-London Heathrow leg and completing the journey in just under 5 hours.
This illustrates the higher take-off weight offered by the 242-tonne A330s is actually needed, which would dramatically improve the available payloads from the 233-tonne, 2004-vintage ex-Northwest example used above, thus dispelling the notion that the latest available aircraft is overbuilt, once cargo and operational considerations are factored in.
In fact, a 3-class, 214-seat 787-8 with an actual take-off weight (TOW) of 500,732lbs flying the aforementioned westbound LHR-LAX journey, would be able to carry 96.9% of its 95,300lbs maximum structural payload, or in a nutshell a full haul of passengers and cargo.
What the oval-shaped MOM targets is niche, new thin long-haul routes one notch below the smallest widebody aircraft, hovering around 187 seats in a realistic 85% load of the 220-seat MOM. The 200-270-seat bracket seems a little too wide and too high.
Examples abound in the Southeast Asia-Australia market: Philippine Airlines' 62% 2015 first-half load factor between the Southeast Asian nation and Sydney, Melbourne, Brisbane, Darwin and Cairns from 1st December onwards with an average of 162 seats filled; Malaysia Airlines' 71% load factor at 189 seats; Royal Brunei Airlines' 72% factor at 182 seats, just to name a few.
Intriguingly, these 3 Southeast Asian carriers' fleet planning process lays bare the fact that Boeing's "7M7" or "MOM" will be sandwiched between the 2-class 206-seat, 4,000nm A321LR and the A330neo. Philippine Airlines is currently in advanced talks to swap 10 out of 30 outstanding A321neo orders into the A321LR ones; Malaysia Airlines Berhad ((MAB)) signed a lease agreement with Air Lease Corporation ((ALC)) for 4 A350-900s, which includes options for 2 additional A350-900s and 2 A330-900neos; and Royal Brunei operates the 787-8 Dreamliner on its Melbourne route.
Indeed, the purported US$15 billion programme cost for Boeing's "7M7" translates into a US$81 million per piece, according to Bank of America/Merrill Lynch. This would amount to a 50% premium on top of the A321's US$54 million full-life base value (FLBV). Whether the MOM offers 50% more value, with cargo space in a 1-abreast LD3 underbelly configuration being suboptimal, than an A321 and the successor A321LR, remains questionable.
Asked to comment on this potential Boeing MOM offering, Airbus chief operating officer ((COO)) - Customers, John Leahy, had this to say. "In 2015, I wouldn't worry about what Boeing is doing in 2025. I'm not overly concerned about Boeing's paper airplane. The aviation publications are littered with Boeing paper tigers."
See also CSX Corporation Is Fairly Valued 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.
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Wojick stressed that current interest stems from a broad customer base, ranging from established incumbents such as American ( AAL ), Delta ( DAL ) and United ( UAL ) to smaller low-cost carriers. John Wojick, senior vice president (SVP) for global sales and marketing at Boeing ( BA ), confirmed in an interview prior to the air show that the Seattle-based planemaker is indeed moving forward with a study of an all-new commercial jet tentatively earmarked for entry into service in the middle of the next decade. January 2015 also saw the fiercest North Atlantic winds in over 25 months with a British Airways 777-200ER reportedly catching a tailwind in excess of 173 knots on the eastbound New York John F. Kennedy-London Heathrow leg and completing the journey in just under 5 hours.
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Wojick stressed that current interest stems from a broad customer base, ranging from established incumbents such as American ( AAL ), Delta ( DAL ) and United ( UAL ) to smaller low-cost carriers. Yet where such a demand exists does not necessarily mean it is best served by the MOM as suggested, given the load factor, realistic airline use, belly cargo and en-route wind considerations. Examples abound in the Southeast Asia-Australia market: Philippine Airlines' 62% 2015 first-half load factor between the Southeast Asian nation and Sydney, Melbourne, Brisbane, Darwin and Cairns from 1st December onwards with an average of 162 seats filled; Malaysia Airlines' 71% load factor at 189 seats; Royal Brunei Airlines' 72% factor at 182 seats, just to name a few.
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Wojick stressed that current interest stems from a broad customer base, ranging from established incumbents such as American ( AAL ), Delta ( DAL ) and United ( UAL ) to smaller low-cost carriers. (click to enlarge) Image Courtesy of Boeing This makes a departure for Boeing from its stance from last year, when Boeing's chief executive at the time, Jim McNerney, said the company would take no more 'moonshots' in the form of an entirely new aircraft. What the oval-shaped MOM targets is niche, new thin long-haul routes one notch below the smallest widebody aircraft, hovering around 187 seats in a realistic 85% load of the 220-seat MOM.
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Wojick stressed that current interest stems from a broad customer base, ranging from established incumbents such as American ( AAL ), Delta ( DAL ) and United ( UAL ) to smaller low-cost carriers. "Our customers tell us they want an airplane that is bigger than the 757 and flies farther," said Wojick. Due for an entry to service date sometime in 2019, the A321LR has been hailed by Airbus as having the longest range of any narrow-body jet.
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2015-09-23 00:00:00 UTC
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Airline Hubs: Which Company Dominates Your Airport?
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https://www.nasdaq.com/articles/airline-hubs-which-company-dominates-your-airport-2015-09-23
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Airline hubs are specific airports that an airline company uses as a transfer spot to get travelers to their intended destination. This system is part of the spoke-hub transportation model, which has been favored by many airlines since the industry was deregulated in 1978; the model consists of a system of connections in which all airline traffic moves across spokes linked to the hub at the center.
Image via .
As you can see in the above example, Denver and Los Angeles represent hubs, with many spokes reaching outward to other cities. The purpose of this model is simple: to save airlines money and to provide passengers better routes to their selected destinations. Today, most airlines have at least one main airport that their flights must travel through, and from there, the flights go outwards on different network spokes.
So which airlines dominate which airports? Let's take a look at four major U.S. airlines, and see where their hubs are located.
American Airlines ( AAL )
The world's largest airline by fleet size and revenue, American Airlines has been an industry staple since its formation in 1930. The company is headquartered in Fort Worth, Texas, and since its merger with US Airways in 2013, American Airlines operates nine domestic hubs:
Dallas-Fort Worth International Airport
Charlotte-Douglas International Airport
Chicago O'Hare International Airport
Philadelphia International Airport
Phoenix Sky Harbor International Airport
Miami International Airport
Ronald Reagan Washington International Airport
Los Angeles International Airport
New York City's John F. Kennedy International Airport
Delta Airlines ( DAL )
Like American Airlines, Delta Airlines has been present in the U.S. airline industry for decades. It began carrying passengers in 1929, and has grown rapidly since then due to many airline mergers. Headquartered in Atlanta, Georgia, Delta Airlines operates 10 domestic hubs:
Hartsfield-Jackson Atlanta International Airport
Detroit Metropolitan Wayne County Airport
Cincinnati/Northern Kentucky International Airport
New York City's John F. Kennedy International Airport
New York City's La Guardia Airport
Boston's Logan International Airport
Los Angeles International Airport
Minneapolis-St. Paul International Airport
Salt Lake City International Airport
Seattle-Tacoma International Airport
And three international hubs:
Amsterdam Airport Schiphol
Tokyo Narita International Airport
Paris-Charles de Gaulle Airport
Southwest Airlines ( LUV )
Touted as the world's largest low-cost carrier, Southwest Airlines was launched in 1967 and is known for its Rapid Rewards frequent-flyer program; the airline is headquartered in Dallas, Texas. While Southwest does not use the hub and spoke transportation model (it prefers the old-fashioned point-to-point system, which carries passengers short distances with few connecting flights), the airline still operates out of 10 major domestic cities:
Chicago Midway International Airport
Baltimore-Washington International Airport
Las Vegas' McCarran International Airport
Dallas Love Field Airport
Denver International Airport
Phoenix Sky Harbor International Airport
Houston, Texas' William P. Hobby Airport
Hartsfield-Jackson Atlanta International Airport
Orlando International Airport
Los Angeles International Airport
United Continental Holdings ( UAL )
Headquartered in Chicago, United Continental Holdings is an airline holding company for United Airlines and Continental Airlines, which formed due to a merger in 2010. Operating more than 700 mainline aircraft , United Continental needs a lot of hubs. The airline company has nine hubs in total, eight domestic:
Chicago O'Hare International Airport
Houston, Texas' George Bush Intercontinental Airport
Denver International Airport
Los Angeles International Airport
Newark Liberty International Airport
San Francisco International Airport
Washington Dulles International Airport
Guam A.B. Wan Pat International Airport
And one international:
Tokyo Narita International Airport
As you can see, these four major airlines overlap in their hub or major operating city location nationwide, which can be looked at as a positive thing for sequent travelers. The hub and spoke model offers each airline (even Southwest) a way to replace high numbers half-empty routes with fewer, fuller ones, which then leads to less delays and a wide variety of connections.
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UNITED CONT HLD (UAL): Free Stock Analysis Report
SOUTHWEST AIR (LUV): 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.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines ( AAL ) The world's largest airline by fleet size and revenue, American Airlines has been an industry staple since its formation in 1930. Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): 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. As you can see in the above example, Denver and Los Angeles represent hubs, with many spokes reaching outward to other cities.
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American Airlines ( AAL ) The world's largest airline by fleet size and revenue, American Airlines has been an industry staple since its formation in 1930. Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): 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 company is headquartered in Fort Worth, Texas, and since its merger with US Airways in 2013, American Airlines operates nine domestic hubs: Dallas-Fort Worth International Airport Charlotte-Douglas International Airport Chicago O'Hare International Airport Philadelphia International Airport Phoenix Sky Harbor International Airport Miami International Airport Ronald Reagan Washington International Airport Los Angeles International Airport New York City's John F. Kennedy International Airport Delta Airlines ( DAL ) Like American Airlines, Delta Airlines has been present in the U.S. airline industry for decades.
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American Airlines ( AAL ) The world's largest airline by fleet size and revenue, American Airlines has been an industry staple since its formation in 1930. Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): 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 company is headquartered in Fort Worth, Texas, and since its merger with US Airways in 2013, American Airlines operates nine domestic hubs: Dallas-Fort Worth International Airport Charlotte-Douglas International Airport Chicago O'Hare International Airport Philadelphia International Airport Phoenix Sky Harbor International Airport Miami International Airport Ronald Reagan Washington International Airport Los Angeles International Airport New York City's John F. Kennedy International Airport Delta Airlines ( DAL ) Like American Airlines, Delta Airlines has been present in the U.S. airline industry for decades.
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American Airlines ( AAL ) The world's largest airline by fleet size and revenue, American Airlines has been an industry staple since its formation in 1930. Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): 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. Today, most airlines have at least one main airport that their flights must travel through, and from there, the flights go outwards on different network spokes.
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2015-09-22 00:00:00 UTC
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American Airlines Flights Grounded on Technical Concerns
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https://www.nasdaq.com/articles/american-airlines-flights-grounded-on-technical-concerns-2015-09-22
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Technical glitches are becoming a growing concern for carriers, often resulting in passenger harassments and messed up flight schedules.
Recently, several flights of American Airlines GroupAAL , which came into being following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways, experienced significant delays due to a software glitch. According to media reports, computer failures have delayed timely check in of passengers on the flight.
American Airlines flights remained grounded in Dallas, Chicago and Miami airports for less than two hours following a technical problem. However, the root cause of the problem not known. The sole consolation for the carrier was, however, that there was no evidence of external threat/hacking behind the problem, according to a report appearing in the Associated Press.
According to FlightAware.com, the technical problem resulted in about 600 flights being delayed on American Airlines and more than 200 for Eagle operator Envoy Air. This had happened late afternoon on Thursday.
Prior to that, in Apr 2015, passengers of American Airlines Group faced undue bother following significant flight delays caused by an abrupt crash of pilots' iPads. As technological infrastructure constitutes a key expense for airline companies, the profitability of carriers could be potentially affected in the event of such technology malfunctions.
Few months back, even United Continental Holdings, Inc. UAL faced similar technical issues where network connectivity problems were responsible for service disruption. The glitch prompted the Federal Aviation Administration to issue an advisory notice pertaining to a "ground stop" for United Airlines flights (mainline). The advisory was, however, lifted after approximately 2 hours as flights of the Chicago, IL-based carrier resumed regular operations after the software issue was resolved.
Stocks to Consider
American Airlines currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include SkyWest Inc. SKYW and JetBlue Airways Corp. JBLU . Both sport a Zacks Rank #1 (Strong Buy).
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JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
UNITED CONT HLD (UAL): 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.
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Recently, several flights of American Airlines GroupAAL , which came into being following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways, experienced significant delays due to a software glitch. Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): 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. Prior to that, in Apr 2015, passengers of American Airlines Group faced undue bother following significant flight delays caused by an abrupt crash of pilots' iPads.
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Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): 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. Recently, several flights of American Airlines GroupAAL , which came into being following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways, experienced significant delays due to a software glitch. Prior to that, in Apr 2015, passengers of American Airlines Group faced undue bother following significant flight delays caused by an abrupt crash of pilots' iPads.
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Recently, several flights of American Airlines GroupAAL , which came into being following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways, experienced significant delays due to a software glitch. Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): 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. According to FlightAware.com, the technical problem resulted in about 600 flights being delayed on American Airlines and more than 200 for Eagle operator Envoy Air.
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Recently, several flights of American Airlines GroupAAL , which came into being following the Dec 2013 merger of AMR (American Airlines' parent group) and US Airways, experienced significant delays due to a software glitch. Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): 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. According to FlightAware.com, the technical problem resulted in about 600 flights being delayed on American Airlines and more than 200 for Eagle operator Envoy Air.
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2015-09-22 00:00:00 UTC
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Southwest Airlines Sees 24.5% Y/Y Drop in Q3 Fuel Costs
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AAL
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https://www.nasdaq.com/articles/southwest-airlines-sees-24.5-y-y-drop-in-q3-fuel-costs-2015-09-22
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The Dallas, TX-based low-cost carrier Southwest Airlines Co.LUV announced that it expects its average fuel cost in the third quarter of 2015 to fall 24.5% on a year-over-year basis to $2.22 per gallon. Economic fuel costs are anticipated to decline approximately $1.3 billion in 2015 compared with 2014 levels, thereby resulting in significant savings for Southwest Airlines. The projection is not surprising as weak fuel costs have benefited airline stocks including Southwest Airlines for quite some time.
The company further expects 2015 unit costs (excluding fuel and oil expenses) to drop 2% year over year. Capacity (measured in available seat miles or ASMs) in 2015 is still projected to expand by 7% from 2014 levels.
We remind investors that Southwest Airlines' statement on capacity expansion had triggered a massive sell-off in the airline space in May this year. At that time, the carrier said that it plans to raise its capacity in the band of 7%-8% in 2015 as opposed to the earlier projection of a 7% increase. Southwest Airlines' projection wreaked havoc among investors who feared that the increased capacity would lead to an oversupplied market despite weak fuel costs. Investors were naturally concerned that oversupply could result in lower fares and hamper profit. Following the investor panic, the low-cost carrier reverted to a 7% capacity growth plan.
The carrier still expects operating revenue per ASM to decline approximately 1% in the third quarter of 2015 compared with the year-ago period.
Apart from the projections, Southwest Airlines announced that it has shelled out $1.3 billion to its stockholders so far this year through share repurchases and dividend payments. In May, the carrier hiked its quarterly dividend by 25% to 7.5 cents per share apart from approving a new stock repurchase program worth $1.5 billion. We note that the solid financial health of carriers, thanks to low oil prices , has resulted in a surge in buyback activities apart from dividend hikes. Companies like Delta Air Lines DAL and American Airlines Group AAL too have authorized new share buyback programs this year.
Zacks Rank
Southwest Airlines currently carries a Zacks Rank #2 (Buy). Investors interested in the airline space may also consider Virgin America VA , which sports a Zacks Rank #1 (Strong Buy).
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SOUTHWEST AIR (LUV): Free Stock Analysis Report
DELTA AIR LINES (DAL): 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.
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Companies like Delta Air Lines DAL and American Airlines Group AAL too have authorized new share buyback programs this year. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. The Dallas, TX-based low-cost carrier Southwest Airlines Co.LUV announced that it expects its average fuel cost in the third quarter of 2015 to fall 24.5% on a year-over-year basis to $2.22 per gallon.
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Companies like Delta Air Lines DAL and American Airlines Group AAL too have authorized new share buyback programs this year. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): 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.
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Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): 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. Companies like Delta Air Lines DAL and American Airlines Group AAL too have authorized new share buyback programs this year. The projection is not surprising as weak fuel costs have benefited airline stocks including Southwest Airlines for quite some time.
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Companies like Delta Air Lines DAL and American Airlines Group AAL too have authorized new share buyback programs this year. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. The Dallas, TX-based low-cost carrier Southwest Airlines Co.LUV announced that it expects its average fuel cost in the third quarter of 2015 to fall 24.5% on a year-over-year basis to $2.22 per gallon.
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2015-09-22 00:00:00 UTC
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Brazil's Economy Tumbles: How Are Airlines Responding?
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https://www.nasdaq.com/articles/brazils-economy-tumbles-how-are-airlines-responding-2015-09-22
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While slowing growth in China has been top of mind for many investors in the past month, economic conditions are far worse in Brazil: another key developing economy.
Coming into the year, economists were expecting only modest economic growth in Brazil. The slowdown has been far worse than feared, though. Economists now expect GDP to decline 2.7% in 2015 and a further 0.8% in 2016. Meanwhile, the Brazilian real has lost more than half of its value against the dollar since early 2012, with most of that drop occurring in the past year.
US Dollar to Brazilian Real Exchange Rate , data by YCharts
The combination of the weak real and the economic downturn in Brazil has caused a lot of headaches for top U.S. airlines American Airlines , United Continental , and Delta Air Lines . Let's take a look at how each one is reacting to this difficult situation.
American Airlines battens down the hatches
American Airlines has by far the largest position in Brazil of any U.S. carrier, so the weak Brazilian economy is a particularly big problem for it. In the past year, American has cut its service to Brazil significantly. It has mostly done so by reducing frequencies and using smaller airplanes, but it also dropped its experimental route from New York to Viracopos Airport (located on the outskirts of Sao Paulo) in March, just five months after launching it.
In Q2, American Airlines' capacity to Brazil was down a stunning 20% year over year, yet unit revenue still tumbled 24% in the market. As of July, American's management was planning for capacity declines to moderate in the second half of 2015 as the carrier overlaps the initial cuts made last year.
American Airlines has a sizable presence in Brazil. Photo: American Airlines
However, it may announce changes to that plan when the company reports its Q3 earnings next month. American's sales manager for Brazil recently told Bloomberg that the airline is planning month to month and offering bigger and bigger promotions to fill empty seats on its planes.
Given that the economic outlook for Brazil has worsened lately -- while the real has plunged nearly 30% against the dollar in the past three months -- American Airlines may need to go even further in cutting flights to Brazil to shore up its profitability there.
United Continental finds a partner
United Airlines has also been paring its capacity to Brazil. During Q2, the company slashed its fourth quarter capacity there by 7%. Meanwhile, to drum up demand, the company began a 25% sale on economy-class "Saver" award flights to Brazil, running from late August through the end of November.
United Airlines also made a bold bet on the future of the Brazilian market just a few months ago by investing $100 million for a 5% stake in No. 3 Brazilian airline Azul. The two airlines also entered a long-term strategic partnership.
It will probably take a few years for United and Azul to fully exploit the benefits of their new partnership. However, even in the short term, United Airlines should benefit from some extra connecting traffic on its existing routes to Brazil.
Delta Air Lines moves capacity around
Like its two rivals, Delta Air Lines has also announced capacity cuts in Brazil lately. As of April, Delta intended to cut its capacity to Brazil by 15% in Q4. However, Delta isn't just slashing capacity across the board. Instead, it has dropped some flights from its massive Atlanta hub while adding point-to-point routes out of Orlando.
Delta is cutting capacity in Brazil -- but still adding some new flights there. Photo: The Motley Fool
Earlier in the year, Delta announced plans to begin flying from Sao Paulo to Orlando four times weekly starting in December. It also plans to replace its daily flight between Brasilia and Atlanta with a new daily flight from Brasilia to Orlando as of the beginning of December. Finally, Delta announced just this week that it wants to increase its Sao Paulo-Orlando service to daily in February.
While Delta offers vastly fewer connecting flights in Orlando than in Atlanta, it is betting on higher local demand due to Orlando's big tourism market. Delta will still offer connecting flights in Orlando to key hub markets like New York, Atlanta, Detroit, and Los Angeles, though. Finally, on the Brasilia route, it will be able to use a smaller 757 aircraft that doesn't have the range to make it to Atlanta.
Will any of these strategies work?
The economic situation in Brazil is very fluid right now -- and lately, everything has been going in the wrong direction. Airlines will need to incorporate as much flexibility as possible into their plans, so that they can adapt to the changing market conditions.
American Airlines has the most at stake due to its large presence in Brazil. Given that its initial round of capacity cuts hasn't turned things around, it will be interesting to see whether it will slash capacity in the region again in 2016.
United and Delta have less to lose, but they still can't afford to leave unprofitable capacity in the market indefinitely. Investors should listen closely to what executives at all three airlines have to say about Brazil during their earnings calls next month for clues about their next moves.
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The article Brazil's Economy Tumbles: How Are Airlines Responding? 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 has no position in any of the stocks mentioned. 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.
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While slowing growth in China has been top of mind for many investors in the past month, economic conditions are far worse in Brazil: another key developing economy. It has mostly done so by reducing frequencies and using smaller airplanes, but it also dropped its experimental route from New York to Viracopos Airport (located on the outskirts of Sao Paulo) in March, just five months after launching it. Photo: The Motley Fool Earlier in the year, Delta announced plans to begin flying from Sao Paulo to Orlando four times weekly starting in December.
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US Dollar to Brazilian Real Exchange Rate , data by YCharts The combination of the weak real and the economic downturn in Brazil has caused a lot of headaches for top U.S. airlines American Airlines , United Continental , and Delta Air Lines . Photo: The Motley Fool Earlier in the year, Delta announced plans to begin flying from Sao Paulo to Orlando four times weekly starting in December. 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 has no position in any of the stocks mentioned.
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US Dollar to Brazilian Real Exchange Rate , data by YCharts The combination of the weak real and the economic downturn in Brazil has caused a lot of headaches for top U.S. airlines American Airlines , United Continental , and Delta Air Lines . In Q2, American Airlines' capacity to Brazil was down a stunning 20% year over year, yet unit revenue still tumbled 24% in the market. Given that the economic outlook for Brazil has worsened lately -- while the real has plunged nearly 30% against the dollar in the past three months -- American Airlines may need to go even further in cutting flights to Brazil to shore up its profitability there.
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While slowing growth in China has been top of mind for many investors in the past month, economic conditions are far worse in Brazil: another key developing economy. In Q2, American Airlines' capacity to Brazil was down a stunning 20% year over year, yet unit revenue still tumbled 24% in the market. Delta is cutting capacity in Brazil -- but still adding some new flights there.
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2015-09-22 00:00:00 UTC
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BlackBerry's (BBRY) Q2 Earnings Preview: What's in Store?
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https://www.nasdaq.com/articles/blackberrys-bbry-q2-earnings-preview%3A-whats-in-store-2015-09-22
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Canadian smartphone manufacturer BlackBerry LimitedBBRY is expected to release its second-quarter 2016 financial numbers before the opening bell on Sep 25.
In the last quarter, the company delivered a negative 25% earnings surprise. Meanwhile, in the last four quarters, the company reported positive earnings surprises, with an average beat of 103.31%.
Let's see how things are shaping up for this announcement.
Factors at Play
BlackBerry's BES12 platform is gaining popularity. Meanwhile, the company's latest deal to buy Good Technology for $425 million is poised to boost its mobile security business.
However, deteriorating smartphone sales, stiff competition, a stale product portfolio and unfavorable product mix are potent headwinds.
Previously, BlackBerry had faced service disruption in emerging nations of India, Pakistan, United Arab Emirates, Saudi Arabia and Indonesia owing to security reasons. However, services were resumed under more limitations, thereby hurting the company's reputation in markets where it enjoys considerable hold.
Earnings Whispers
Our proven model does not conclusively show that BlackBerry 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, 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 stands at -14.29% as the Most Accurate estimate is pegged at a loss of 8 cents while the Zacks Consensus Estimate is a loss of 7 cents.
Zacks Rank: BlackBerry carries a Zacks Rank #3 (Hold) which increases the predictive power of ESP. However, the company's -14.29% ESP makes surprise prediction difficult.
Please note that Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
Stocks to Consider
Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.
Allegiant Travel Company ALGT has an ESP of +3.20% and a Zacks Rank #2 (Buy).
Delta Air Lines, Inc. DAL has an ESP of +2.38% and a Zacks Rank #2.
American Airlines Group Inc. AAL carries a Zacks Rank #3 and an ESP of +0.38%.
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
AMER AIRLINES (AAL): Free Stock Analysis Report
BLACKBERRY LTD (BBRY): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines Group Inc. AAL carries a Zacks Rank #3 and an ESP of +0.38%. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report BLACKBERRY LTD (BBRY): Free Stock Analysis Report To read this article on Zacks.com click here. Canadian smartphone manufacturer BlackBerry LimitedBBRY is expected to release its second-quarter 2016 financial numbers before the opening bell on Sep 25.
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Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report BLACKBERRY LTD (BBRY): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc. AAL carries a Zacks Rank #3 and an ESP of +0.38%. Zacks Rank: BlackBerry carries a Zacks Rank #3 (Hold) which increases the predictive power of ESP.
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Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report BLACKBERRY LTD (BBRY): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group Inc. AAL carries a Zacks Rank #3 and an ESP of +0.38%. That is not the case here, as you will see below: Zacks ESP: The Earnings ESP for the company stands at -14.29% as the Most Accurate estimate is pegged at a loss of 8 cents while the Zacks Consensus Estimate is a loss of 7 cents.
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American Airlines Group Inc. AAL carries a Zacks Rank #3 and an ESP of +0.38%. Click to get this free report DELTA AIR LINES (DAL): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report BLACKBERRY LTD (BBRY): 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, 2 or at least 3 for this to happen.
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8259.0
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2015-09-18 00:00:00 UTC
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The Zacks Analyst Blog Highlights: American Airlines Group, Delta Air Lines, JetBlue Airways, Southwest Airlines and Alaska Air Group
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AAL
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https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-american-airlines-group-delta-air-lines-jetblue-airways
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nan
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nan
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For Immediate Release
Chicago, IL - September 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 American Airlines Group ( AAL ), Delta Air Lines ( DAL ), JetBlue Airways Corporation ( JBLU ), Southwest Airlines Co. ( LUV ) and Alaska Air Group, Inc. ( ALK ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Thursday's Analyst Blog:
Airline Fares Turn Pocket-Friendly: 3 Stocks to Buy
Fliers are on cloud nine, it seems. Customer-friendly data of a 3.1% (seasonally adjusted) month-on-month decline in average airfares in August released by the Bureau of Labor Statistics (BLS) marks the second consecutive month of airline fare reduction. The data also points to a 6% year-over-year decline in the average fare (on an unadjusted basis) in Aug 2015.
The fall in airfare (on a seasonally adjusted basis) was much steeper in Jul 2015, where airfares in the U.S. decreased 5.6% over Jun 2015. This decline marked the sharpest monthly drop since Dec 1995.
Low Oil Prices Prompting Fare Reduction
Everyone knows that weak oil prices came as a boon for the airline stocks. This is because fuel costs account for a major chunk of an airline's operating expenses. Despite the recent rally, crude prices have been hovering around the $45 a barrel mark. This represents a significant decline from the approximate $105 per barrel witnessed in July last year. The reduction in oil prices has significantly lowered the operating expenses of carriers, thereby aiding their bottom lines and resulting in huge savings.
American Airlines Group ( AAL ), which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 due to soft oil prices. Delta Air Lines ( DAL ), which has restructured its fuel hedge portfolio in the wake of the soft fuel price environment, expects to generate savings of over $2 billion in 2015.
With savings of such gigantic proportions, the decline in airfare does not come as a surprise. Going by the data, it can be easily deduced that the benefit of low oil prices is being passed on to the fliers by the U.S. carriers.
Moreover, as the monthly traffic results suggest, carriers are constantly expanding capacity and this is likely to see further drop in airfares going forward.
Promising IATA Forecast
With oil prices expected to remain weak at least for the remainder of the year, the party will still be on for the carriers. According to a forecast by the International Air Transport Association (IATA), 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.
The IATA increased its projection for 2015 global net profit for the industry to $29.3 billion from the earlier projection of $25 billion. In comparison, the 2014 figure was $16.4 billion. The bulk of the 2015 global profits ($15.7 billion) is expected to come from the North American region.
3 Solid Picks
In the backdrop of the consumer-friendly data for fliers and an upbeat outlook for the airline industry, it will be prudent to enrich your portfolio with stocks from this promising industry.
However, given the vastness of the space, zeroing in on the right stocks is by no means an easy task. To aid your search, we have arrived at three airline stocks backed by a good Zacks Growth Score and Zacks Rank. We narrowed down our choices with the help of our new style score system .
Our research shows that stocks with Growth Style Scores of 'A' or 'B' when combined with Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities in the growth investing space.
JetBlue Airways Corporation ( JBLU ) is a low-fare and low-cost passenger airline. The company sports a Zacks Rank #1 and has a Growth Style Score of 'B.'
The expected earnings growth rate at JetBlue for the current year is a phenomenal 166.1%.
Southwest Airlines Co. ( LUV ) is a passenger airline that provides scheduled air transportation in the U.S. Southwest Airlines is one of the world's most profitable low-cost airlines that consistently offers the lowest fares.
Southwest holds a Zacks Rank #2 and has a Growth Style Score of 'B.'
The expected earnings growth rate at Southwest for the current year is also an impressive 71.6%.
Alaska Air Group, Inc. ( ALK ) is a holding company that has two principal subsidiaries: Alaska Airlines, Inc. and Horizon Air Industries, Inc. The company holds a Zacks Rank #2 and has a Growth Style Score of 'B.'
The expected earnings growth rate at Alaska Air Group for the current year is 50.6%.
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About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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
DELTA AIR LINES (DAL): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
SOUTHWEST AIR (LUV): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines Group ( AAL ), which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 due to soft oil prices. Stocks recently featured in the blog include the American Airlines Group ( AAL ), Delta Air Lines ( DAL ), JetBlue Airways Corporation ( JBLU ), Southwest Airlines Co. ( LUV ) and Alaska Air Group, Inc. ( ALK ). Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here.
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Stocks recently featured in the blog include the American Airlines Group ( AAL ), Delta Air Lines ( DAL ), JetBlue Airways Corporation ( JBLU ), Southwest Airlines Co. ( LUV ) and Alaska Air Group, Inc. ( ALK ). American Airlines Group ( AAL ), which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 due to soft oil prices. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here.
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Stocks recently featured in the blog include the American Airlines Group ( AAL ), Delta Air Lines ( DAL ), JetBlue Airways Corporation ( JBLU ), Southwest Airlines Co. ( LUV ) and Alaska Air Group, Inc. ( ALK ). Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group ( AAL ), which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 due to soft oil prices.
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Stocks recently featured in the blog include the American Airlines Group ( AAL ), Delta Air Lines ( DAL ), JetBlue Airways Corporation ( JBLU ), Southwest Airlines Co. ( LUV ) and Alaska Air Group, Inc. ( ALK ). American Airlines Group ( AAL ), which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 due to soft oil prices. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here.
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8260.0
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2015-09-17 00:00:00 UTC
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Airline Fares Turn Pocket-Friendly: 3 Stocks to Buy
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AAL
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https://www.nasdaq.com/articles/airline-fares-turn-pocket-friendly%3A-3-stocks-to-buy-2015-09-17
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nan
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nan
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Fliers are on cloud nine, it seems. Customer-friendly data of a 3.1% (seasonally adjusted) month-on-month decline in average airfares in August released by the Bureau of Labor Statistics (BLS) marks the second consecutive month of airline fare reduction. The data also points to a 6% year-over-year decline in the average fare (on an unadjusted basis) in Aug 2015.
The fall in airfare (on a seasonally adjusted basis) was much steeper in Jul 2015, where airfares in the U.S. decreased 5.6% over Jun 2015. This decline marked the sharpest monthly drop since Dec 1995.
Low Oil Prices Prompting Fare Reduction
Everyone knows that weak oil prices came as a boon for the airline stocks. This is because fuel costs account for a major chunk of an airline's operating expenses. Despite the recent rally, crude prices have been hovering around the $45 a barrel mark. This represents a significant decline from the approximate $105 per barrel witnessed in July last year. The reduction in oil prices has significantly lowered the operating expenses of carriers, thereby aiding their bottom lines and resulting in huge savings.
American Airlines Group AAL , which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 due to soft oil prices. Delta Air Lines DAL , which has restructured its fuel hedge portfolio in the wake of the soft fuel price environment, expects to generate savings of over $2 billion in 2015.
With savings of such gigantic proportions, the decline in airfare does not come as a surprise. Going by the data, it can be easily deduced that the benefit of low oil prices is being passed on to the fliers by the U.S. carriers.
Moreover, as the monthly traffic results suggest, carriers are constantly expanding capacity and this is likely to see further drop in airfares going forward.
Promising IATA Forecast
With oil prices expected to remain weak at least for the remainder of the year, the party will still be on for the carriers. According to a forecast by the International Air Transport Association (IATA), 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.
The IATA increased its projection for 2015 global net profit for the industry to $29.3 billion from the earlier projection of $25 billion. In comparison, the 2014 figure was $16.4 billion. The bulk of the 2015 global profits ($15.7 billion) is expected to come from the North American region.
3 Solid Picks
In the backdrop of the consumer-friendly data for fliers and an upbeat outlook for the airline industry, it will be prudent to enrich your portfolio with stocks from this promising industry.
However, given the vastness of the space, zeroing in on the right stocks is by no means an easy task. To aid your search, we have arrived at three airline stocks backed by a good Zacks Growth Score and Zacks Rank. We narrowed down our choices with the help of our new style score system .
Our research shows that stocks with Growth Style Scores of 'A' or 'B' when combined with Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities in the growth investing space.
JetBlue Airways CorporationJBLU is a low-fare and low-cost passenger airline. The company sports a Zacks Rank #1 and has a Growth Style Score of 'B.'
The expected earnings growth rate at JetBlue for the current year is a phenomenal 166.1%.
Southwest Airlines Co.LUV is a passenger airline that provides scheduled air transportation in the U.S. Southwest Airlines is one of the world's most profitable low-cost airlines that consistently offers the lowest fares.
Southwest holds a Zacks Rank #2 and has a Growth Style Score of 'B.'
The expected earnings growth rate at Southwest for the current year is also an impressive 71.6%.
Alaska Air Group, Inc.ALK is a holding company that has two principal subsidiaries: Alaska Airlines, Inc. and Horizon Air Industries, Inc. The company holds a Zacks Rank #2 and has a Growth Style Score of 'B.'
The expected earnings growth rate at Alaska Air Group for the current year is 50.6%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
SOUTHWEST AIR (LUV): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
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.
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American Airlines Group AAL , which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 due to soft oil prices. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Customer-friendly data of a 3.1% (seasonally adjusted) month-on-month decline in average airfares in August released by the Bureau of Labor Statistics (BLS) marks the second consecutive month of airline fare reduction.
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American Airlines Group AAL , which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 due to soft oil prices. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report 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 expected earnings growth rate at Alaska Air Group for the current year is 50.6%.
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Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group AAL , which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 due to soft oil prices. Our research shows that stocks with Growth Style Scores of 'A' or 'B' when combined with Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities in the growth investing space.
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American Airlines Group AAL , which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 due to soft oil prices. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report To read this article on Zacks.com click here. Customer-friendly data of a 3.1% (seasonally adjusted) month-on-month decline in average airfares in August released by the Bureau of Labor Statistics (BLS) marks the second consecutive month of airline fare reduction.
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8261.0
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2015-09-16 00:00:00 UTC
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American Airlines Remains Focused On Completing The Integration Process, Pacific To Drive Future Growth
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AAL
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https://www.nasdaq.com/articles/american-airlines-remains-focused-completing-integration-process-pacific-drive-future
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nan
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nan
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American Airlines, the world's largest airline by traffic, is concentrating all its efforts (including a large amount of cash) to achieve the final milestone in the integration process of its merger with US Airways that took place in December 2013. This was the message that was conveyed by the airline's Chief Financial Officer ( CFO ), Derek Kerr, who presented at the Cowen and Company's 8th Annual Global Transportation Conference last week. While Mr. Kerr painted an optimistic picture about its third quarter performance and the airline's operations in general, the key takeaway from the presentation was the fact that the airline expects a majority of its future growth to be driven by the Pacific region. The general tone of the presentation was very positive and the airline appeared comfortable with its current performance, despite the recent tremors felt by the global markets. We believe that the airline is on track for meeting the deadline of operating a single passenger service system (PSS) and is set to deliver another record quarter on the back of lower crude oil prices .
Source: Google Finance
Here are the key highlights of the presentation:
Integration On Track For Completion - American Airlines has completed four out of the five major milestones that the airline had identified in the integration process. The last step in the process, which comprises the integration of operations of American Airlines and US Airways on a single passenger service system (PSS), is expected to be completed by 17th October 2015. The airline used the "drain down" approach, under which the airline migrated all the reservations for US Airways flights to American flights for departures on and beyond 17th October to its existing system called Sabre on 18th July 2015. Post the cutoff date, all US Airways flights will cease to exist and passengers will be able to book flights for both the flights on a single reservation system. The Fort Worth-based airline is providing extensive training to its customer facing employees and has hired additional staff to ensure a smooth transition.
3Q Expectations High - American Airline delivered its highest ever quarterly profit of $1.9 billion in the last quarter, despite challenging weather conditions. The airline generated a pretax operating margin of 17.2% in the second quarter, which is substantially higher than the other network carriers such as United and Delta. The legacy carrier expects to repeat its 2Q performance in the third quarter on the back of weak fuel prices and better operational performance.
High Liquidity - The legacy carrier had a liquidity of approximately $11.5 billion, which is very high compared to its peers. However, the airline specified that it has maintained a high liquidity to ensure a hassle free transition into a single PSS next month. Consequently, the airline's liquidity is expected to reduce significantly in 2016, closer to the average liquidity of other network carriers.
Youngest Fleet By 2017 - American is investing heavily on its fleet replacement program. The airline is expected to receive 87 A320 family aircraft over the next two years and over 100 A320 Neo aircraft beyond 2018. As a result, the airline will have the youngest and most fuel efficient fleet in the industry by 2017. The airline's average fleet age in 2017 is expected to be 9.6 years, which is at least 3 to 4 years lower compared to its competitors .
Latin American To Remain Weak; Pacific To Drive Future Growth - The network carrier expects Latin American markets, particularly Brazil, to remain rough even in the second half of the year. However, the airline sees a majority of its future growth to be driven by the Pacific markets, even though the airline does not have a significant presence in those markets yet.
Pricing Pressure To Persist In Dallas - The airline does not foresee a pricing improvement in Dallas as the airline expects the Dallas Love Field to remain competitive due to the presence of Southwest Airlines and Spirit Airlines in the region. American had previously provided a guidance of a 6-8% decline in its third quarter unit revenues due to this pricing pressure.
Overall, American Airlines is extremely confident about migrating into a single passenger reservation system by mid-October and is looking forward to record third quarter results to be announced next month.
See Our Complete Analysis For American Airlines
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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This was the message that was conveyed by the airline's Chief Financial Officer ( CFO ), Derek Kerr, who presented at the Cowen and Company's 8th Annual Global Transportation Conference last week. We believe that the airline is on track for meeting the deadline of operating a single passenger service system (PSS) and is set to deliver another record quarter on the back of lower crude oil prices . The last step in the process, which comprises the integration of operations of American Airlines and US Airways on a single passenger service system (PSS), is expected to be completed by 17th October 2015.
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The last step in the process, which comprises the integration of operations of American Airlines and US Airways on a single passenger service system (PSS), is expected to be completed by 17th October 2015. Latin American To Remain Weak; Pacific To Drive Future Growth - The network carrier expects Latin American markets, particularly Brazil, to remain rough even in the second half of the year. Mid & Small Cap | European Large & Mid Cap More Trefis Research The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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While Mr. Kerr painted an optimistic picture about its third quarter performance and the airline's operations in general, the key takeaway from the presentation was the fact that the airline expects a majority of its future growth to be driven by the Pacific region. The airline used the "drain down" approach, under which the airline migrated all the reservations for US Airways flights to American flights for departures on and beyond 17th October to its existing system called Sabre on 18th July 2015. Pricing Pressure To Persist In Dallas - The airline does not foresee a pricing improvement in Dallas as the airline expects the Dallas Love Field to remain competitive due to the presence of Southwest Airlines and Spirit Airlines in the region.
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The last step in the process, which comprises the integration of operations of American Airlines and US Airways on a single passenger service system (PSS), is expected to be completed by 17th October 2015. The legacy carrier expects to repeat its 2Q performance in the third quarter on the back of weak fuel prices and better operational performance. Overall, American Airlines is extremely confident about migrating into a single passenger reservation system by mid-October and is looking forward to record third quarter results to be announced next month.
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8262.0
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2015-09-15 00:00:00 UTC
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American Airlines Continues to Gain on Solid August Traffic
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AAL
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https://www.nasdaq.com/articles/american-airlines-continues-to-gain-on-solid-august-traffic-2015-09-15
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nan
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nan
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Shares of Fort Worth, TX-based American Airlines Group Inc. AAL have gained 3.14% ever since the carrier unveiled impressive Aug 2015 traffic data last week.
Traffic - measured in revenue passenger miles (RPMs) - stood at 21 billion during the month, up 5% from 20 billion recorded a year ago. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) improved 2.7% to 24.3 billion. Since air traffic growth outpaced capacity growth, the load factor or percentage of seats filled by passengers increased to 86.5% from 84.6% in Aug 2014. The levels reached by all the three measures were the highest recorded ever for August.
The record traffic numbers unveiled by American Airlines for the month of August represent another positive for the carrier which is already enjoying massive savings owing to weak oil prices . American Airlines Group, which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 on the back of soft oil prices.
For the first eight months of 2015, American Airlines generated RPMs of 150.81 billion (up 1.3% from the corresponding period last year) and ASMs of 181.43 billion (up 1.1% year over year). Load factor improved 20 basis points year over year to 83.1% as traffic growth outpaced the increase in capacity.
American Airlines forecasts a 6% to 8% drop in passenger revenue per available seat mile (PRASM: a measure of unit revenue) for the third 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 16% to 18%.
The PRASM weakness is not unique to American Airlines. Other American carriers like United Continental Holdings UAL and Delta Air Lines DAL also expect PRASM to decline in the third quarter of 2015.
Zacks Rank
American Airlines carries a Zacks Rank #3 (Hold). A better-ranked stock in the airline space is JetBlue Airways JBLU with a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
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.
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Shares of Fort Worth, TX-based American Airlines Group Inc. AAL have gained 3.14% ever since the carrier unveiled impressive Aug 2015 traffic data last week. Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The record traffic numbers unveiled by American Airlines for the month of August represent another positive for the carrier which is already enjoying massive savings owing to weak oil prices .
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Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Shares of Fort Worth, TX-based American Airlines Group Inc. AAL have gained 3.14% ever since the carrier unveiled impressive Aug 2015 traffic data last week. Load factor improved 20 basis points year over year to 83.1% as traffic growth outpaced the increase in capacity.
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Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Shares of Fort Worth, TX-based American Airlines Group Inc. AAL have gained 3.14% ever since the carrier unveiled impressive Aug 2015 traffic data last week. The record traffic numbers unveiled by American Airlines for the month of August represent another positive for the carrier which is already enjoying massive savings owing to weak oil prices .
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Click to get this free report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Shares of Fort Worth, TX-based American Airlines Group Inc. AAL have gained 3.14% ever since the carrier unveiled impressive Aug 2015 traffic data last week. Traffic - measured in revenue passenger miles (RPMs) - stood at 21 billion during the month, up 5% from 20 billion recorded a year ago.
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8263.0
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2015-09-11 00:00:00 UTC
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Nasdaq 100 Movers: VIP, AAL
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AAL
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https://www.nasdaq.com/articles/nasdaq-100-movers-vip-aal-2015-09-11
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nan
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nan
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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 1.2%. Year to date, American Airlines Group has lost about 22.3% of its value.
And the worst performing Nasdaq 100 component thus far on the day is VimpelCom ( VIP ), trading down 4.9%. VimpelCom is showing a gain of 6.5% looking at the year to date performance.
Two other components making moves today are JD.com ( JD ), trading down 2.4%, and Amazon.com ( AMZN ), trading up 0.4% on the day.
VIDEO: Nasdaq 100 Movers: VIP, AAL
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In early trading on Friday, shares of American Airlines Group ( AAL ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 1.2%. VIDEO: Nasdaq 100 Movers: VIP, 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 VimpelCom ( VIP ), trading down 4.9%.
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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 1.2%. VIDEO: Nasdaq 100 Movers: VIP, 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 22.3% of its value.
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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 1.2%. VIDEO: Nasdaq 100 Movers: VIP, 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 VimpelCom ( VIP ), trading down 4.9%.
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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 1.2%. VIDEO: Nasdaq 100 Movers: VIP, 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 VimpelCom ( VIP ), trading down 4.9%.
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8264.0
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2015-09-10 00:00:00 UTC
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United Continental's CEO Resigns In The Wake Of A Federal Investigation – Tough Times Ahead?
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AAL
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https://www.nasdaq.com/articles/united-continentals-ceo-resigns-wake-federal-investigation-tough-times-ahead-2015-09-10
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nan
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nan
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Just when everyone thought that things were improving for United Continental Holdings ( UAL ), as it joined the S&P 500 Index last week , the airline's president and chief executive officer, Jeff Smisek, along with two other senior officials, stepped down in the wake of a federal investigation questioning their connections with the Port Authority of New York and New Jersey. Oscar Munoz, who has previously worked at a railroad company, CSX Corporation ( CSX ), and is currently a member of United's board, will replace Jeff Smisek as the head of the company with immediate effect, while retaining his seat on the board. United has elected Henry L. Meyer III, the airline's lead independent director as non-executive chairman of the board of directors. The market was not pleased with the news and the airline's stock was down 1.7% in after-market hours. While no one knows how and when the investigation will conclude, we figure that the news is likely to have an adverse impact on United's stock performance in the near term.
Source: Google Finance
We briefly discuss the charges that have been raised in the federal probe against United:
In February of this year, United had disclosed that the US Attorney for New Jersey was investigating the airline and some of its top executives for trading favors with David Samson, the former Chairman of the Port Authority.
Despite being uneconomical, the airline restarted direct bi-weekly flights from Newark to Columbia, South Carolina, after David Samson became the Chairman of the Port Authority. It is alleged that the flight was resumed since Samson has a vacation home in Columbia, because of which the flight was nicknamed "the Chairman's flight" by some of the Port Authority officials.
To return the favor, Samson approved major improvements at the Newark Liberty International Airport that were indirectly proposed by United. Coincidentally, United is the largest carrier operating at the Newark airport.
Soon after Samson resigned from his position last year, United canceled the flights on the Newark-Columbia route.
Though it is difficult to comment on the merits of the probe, we expect this change in management due to a federal investigation to further weaken investor confidence in United's fundamentals.
See Our Complete Analysis For United Continental Here
On a separate note, United's new website - United.com - that was unveiled in May this year, was temporarily unavailable for a couple of hours on Tuesday, 8th September 2015. Consequently, the airline had to divert customers to its mobile application and airport kiosks to book and/or check in for flights. However, the outage did not cause any flight delays or cancellations. While one could have ignored this incident as a one-time event, this wasn't the first incident of operational failure on the part of the Chicago-based airline. The legacy carrier has been facing a number of technical glitches since its merger with Continental Airlines in 2010. For instance, a computer fault in July of this year caused all the US departments of United to come to a standstill for almost two hours. A similar incident occurred in June of this year, which led to cancellation of some flights due to insufficient flight dispatch information. There have been other instances in the past as well, where technical failures have resulted in a drop in United's operational performance. If the airline does not work towards improving its operational performance and overall perception in the market in the near future, it may become difficult for the world's second largest airline to catch up with its peers. While it remains to be seen what the new leadership will bring to the table, we foresee a tough road ahead for United.
Source: The Wall Street Journal
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Just when everyone thought that things were improving for United Continental Holdings ( UAL ), as it joined the S&P 500 Index last week , the airline's president and chief executive officer, Jeff Smisek, along with two other senior officials, stepped down in the wake of a federal investigation questioning their connections with the Port Authority of New York and New Jersey. Despite being uneconomical, the airline restarted direct bi-weekly flights from Newark to Columbia, South Carolina, after David Samson became the Chairman of the Port Authority. Though it is difficult to comment on the merits of the probe, we expect this change in management due to a federal investigation to further weaken investor confidence in United's fundamentals.
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Despite being uneconomical, the airline restarted direct bi-weekly flights from Newark to Columbia, South Carolina, after David Samson became the Chairman of the Port Authority. Mid & Small Cap | European Large & Mid Cap More Trefis Research The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Just when everyone thought that things were improving for United Continental Holdings ( UAL ), as it joined the S&P 500 Index last week , the airline's president and chief executive officer, Jeff Smisek, along with two other senior officials, stepped down in the wake of a federal investigation questioning their connections with the Port Authority of New York and New Jersey. Source: Google Finance We briefly discuss the charges that have been raised in the federal probe against United: In February of this year, United had disclosed that the US Attorney for New Jersey was investigating the airline and some of its top executives for trading favors with David Samson, the former Chairman of the Port Authority. It is alleged that the flight was resumed since Samson has a vacation home in Columbia, because of which the flight was nicknamed "the Chairman's flight" by some of the Port Authority officials.
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Source: Google Finance We briefly discuss the charges that have been raised in the federal probe against United: In February of this year, United had disclosed that the US Attorney for New Jersey was investigating the airline and some of its top executives for trading favors with David Samson, the former Chairman of the Port Authority. It is alleged that the flight was resumed since Samson has a vacation home in Columbia, because of which the flight was nicknamed "the Chairman's flight" by some of the Port Authority officials. There have been other instances in the past as well, where technical failures have resulted in a drop in United's operational performance.
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8265.0
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2015-09-09 00:00:00 UTC
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Is American Airlines Shooting Itself in the Foot With Price Matching?
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AAL
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https://www.nasdaq.com/articles/american-airlines-shooting-itself-foot-price-matching-2015-09-09
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nan
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nan
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As oil prices have fallen during the past year, pricing pressure in the airline industry has steadily increased. Markets targeted by low-cost carriers like Southwest Airlines and ultra-low cost carriers like Spirit Airlines have seen some of the biggest impacts.
Incumbent carriers have reacted to these threats in various ways. American Airlines , the largest airline in the world, has made a bold bet on price matching. Yet it has suffered significant unit revenue declines for the past few quarters. Does this mean its strategy is backfiring?
Pricing pressure heats up
American Airlines was one of the first airlines to report pricing pressure in a handful of domestic markets beginning in late 2014. It attributed the pressure to capacity growth by a number of low-cost carriers.
American Airlines has faced pricing pressure in numerous markets in 2015. Photo: American Airlines.
Most notably, Southwest Airlines has dramatically expanded its capacity at Dallas Love Field since the expiration of the Wright Amendment last fall. This has affected pricing at nearby Dallas-Fort Worth International Airport: American's largest hub.
Meanwhile, ultra-low cost carrier Spirit Airlines was a small niche carrier just a few years ago, but it has been growing extremely quickly. In 2015, Spirit expects to increase its capacity by 30.3%, while adding 15 planes to its fleet. As a result, Spirit Airlines has added capacity in markets across the country.
This explosion of low-cost carrier and ultra-low cost carrier capacity across the country has led to extremely cheap fares on certain routes, especially on off-peak days. This includes roundtrip fares of less than $100 on routes like Chicago-New York, Chicago-Washington D.C., and Dallas-New York.
Fighting back with price matching
American Airlines management first mentioned that it was matching low-cost carriers' prices on the company's Q4earnings callin January. As the year has progressed, the company has become even more aggressive, though.
In July, American Airlines President Scott Kirby told a Wall Street analyst, "I think we are all-in now in matching everywhere." Kirby asserted that this aggressive posture was working -- markets where the company had started matching competitors' prices were outperforming on a relative basis.
On the other hand, this hasn't appreciably improved American's unit revenue trajectory in the domestic market, where it faces the most competition from discount airlines. Passenger revenue per available seat mile, or PRASM, declined 1% on domestic routes in Q1, and then declined 6.2% in Q2. The company expects a fairly similar performance in Q3, and on the Q2earnings call Kirby opined that PRASM could continue declining until the second half of 2016.
There's no good alternative
American Airlines has stated that routes where it's matching prices are outperforming other routes. However, it's possible that unit revenue would be higher still if it had, instead, cut capacity in markets where it's facing the most competitive capacity growth in order to prop up fares.
The problem is, while that strategy might have bolstered unit revenue in the short term, it would have created even bigger problems in the long run. If American Airlines were to retreat in every market where Southwest, Spirit, and their peers are expanding, those carriers would be even more profitable than they are now. Those excess profits would likely be reinvested in future capacity growth.
In essence, American Airlines would be aiding the growth of its competitors. Additionally, those rivals would have strong incentives to expand in other American Airlines markets going forward, knowing that the latter would pull back to avoid a collapse in pricing.
It's not clear whether American's decision to aggressively match competitors' prices will allow it to maximize its earnings in 2015. However, the real payoff will come later on. Hopefully, a bold price-matching strategy today will make competitors think twice before planning big encroachments on American Airlines' territory in the future.
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The article Is American Airlines Shooting Itself in the Foot With Price Matching? originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of Spirit Airlines and is long November 2015 $40 calls on American Airlines Group and long March 2016 $40 calls on Spirit Airlines. 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.
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Kirby asserted that this aggressive posture was working -- markets where the company had started matching competitors' prices were outperforming on a relative basis. Additionally, those rivals would have strong incentives to expand in other American Airlines markets going forward, knowing that the latter would pull back to avoid a collapse in pricing. To learn more about what The Motley Fool thinks about current investment trends, and receive a special free report about what might be the next big industry to come out of Silicon Valley, just click here now .
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Markets targeted by low-cost carriers like Southwest Airlines and ultra-low cost carriers like Spirit Airlines have seen some of the biggest impacts. This explosion of low-cost carrier and ultra-low cost carrier capacity across the country has led to extremely cheap fares on certain routes, especially on off-peak days. Adam Levine-Weinberg owns shares of Spirit Airlines and is long November 2015 $40 calls on American Airlines Group and long March 2016 $40 calls on Spirit Airlines.
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Pricing pressure heats up American Airlines was one of the first airlines to report pricing pressure in a handful of domestic markets beginning in late 2014. Fighting back with price matching American Airlines management first mentioned that it was matching low-cost carriers' prices on the company's Q4earnings callin January. Adam Levine-Weinberg owns shares of Spirit Airlines and is long November 2015 $40 calls on American Airlines Group and long March 2016 $40 calls on Spirit Airlines.
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American Airlines , the largest airline in the world, has made a bold bet on price matching. American Airlines has faced pricing pressure in numerous markets in 2015. This explosion of low-cost carrier and ultra-low cost carrier capacity across the country has led to extremely cheap fares on certain routes, especially on off-peak days.
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8266.0
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2015-09-09 00:00:00 UTC
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3 Ways You Can Still Reap Big Profits With Oil Prices Declining
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AAL
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https://www.nasdaq.com/articles/3-ways-you-can-still-reap-big-profits-oil-prices-declining-2015-09-09
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nan
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nan
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The days of triple-digit oil prices are clearly in the rearview mirror, with some suggesting it could be years before oil ever tops that mark again. While that's bad news for OPEC and big oil, it's music to the ears of those that consume oil and petroleum-based products. Here are three industries really cashing in on the low price of crude.
John Rosevear: Nothing makes an auto investor happier than a maxed-out factory making high-profit products, and Ford and General Motors both have a bunch of those right now thanks to a boom in SUV and truck sales that has been fueled in part by lower gas prices.
The tremendously high costs of an auto factory mean most don't break even until they're running at about 80% of capacity, generally speaking (where "capacity" is two full shifts, five days a week). A factory that is running flat-out, nearly around the clock, is at its most profitable. If it's making high-profit-margin products like pickups or SUVs, that's even better.
Brent Crude Oil Spot Price data by YCharts .
Yes, the spread has narrowed recently, but oil refining remains very profitable, and Phillips 66 has been using the huge free cash produced by its refining business to grow its midstream business of operating fee-based transportation of oil, natural gas, and distillates around the U.S.
In other words, even as commodity prices fall, demand remains high, and Phillips 66's business is built to profit from the demand.
Matt DiLallo : Warren Buffett once quipped that, "Investors have poured their money into airlines and airline manufacturers for 100 years with terrible results," and that, "It's been a death trap for investors." His disdain for airlines alone is reason enough for many investors to avoid the industry. However, there is a case to be made that the industry's recent consolidation plus the big plunge in oil prices could send airline profits soaring over the next year.
As the chart below suggests, there is some correlation between the price of oil and the stock prices of major airlines.
AAL data by YCharts .
When oil plunged late last year, it fueled a subsequent rally in airline stocks, as these companies really benefit from the fact that cheaper crude lead to lower jet fuel costs. For example, fuel and related costs are American Airlines ' highest operating costs, and at one time, they represented 25% of its revenue. In fact, the company estimated that the drop in the price of jet fuel has the potential to save the company $5 billion over the next year, which, for perspective, is more than double its operating income in the prior year.
Delta likewise benefits from lower crude prices not just on the airline side, but at its refinery, too. Refining profits are so strong at the moment that the company is running its Trainer facility at 110% of its nameplate capacity in order to soak up and process as much cheap oil as it can. The company is already on pace to exceed its profit goal to earn $300 million this year at the facility, having booked $176 million in profits through the first half of the year.
Continuing low oil prices will enable airlines to reap some pretty big profits, and that catalyst should lead to soaring stock prices -- at least until the airlines figure out a way to prove Buffett correct once again.
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The article 3 Ways You Can Still Reap Big Profits With Oil Prices Declining originally appeared on Fool.com.
Jason Hall owns shares of Phillips 66. John Rosevear owns shares of Ford and General Motors, and The Motley Fool recommends both. Matt DiLallo owns shares of Ford and Phillips 66 and has the following options: long January 2016 $10 calls on Ford and 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.
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AAL data by YCharts . However, there is a case to be made that the industry's recent consolidation plus the big plunge in oil prices could send airline profits soaring over the next year. Refining profits are so strong at the moment that the company is running its Trainer facility at 110% of its nameplate capacity in order to soak up and process as much cheap oil as it can.
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AAL data by YCharts . When oil plunged late last year, it fueled a subsequent rally in airline stocks, as these companies really benefit from the fact that cheaper crude lead to lower jet fuel costs. John Rosevear owns shares of Ford and General Motors, and The Motley Fool recommends both.
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AAL data by YCharts . However, there is a case to be made that the industry's recent consolidation plus the big plunge in oil prices could send airline profits soaring over the next year. When oil plunged late last year, it fueled a subsequent rally in airline stocks, as these companies really benefit from the fact that cheaper crude lead to lower jet fuel costs.
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AAL data by YCharts . However, there is a case to be made that the industry's recent consolidation plus the big plunge in oil prices could send airline profits soaring over the next year. When oil plunged late last year, it fueled a subsequent rally in airline stocks, as these companies really benefit from the fact that cheaper crude lead to lower jet fuel costs.
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8267.0
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2015-09-04 00:00:00 UTC
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Decline in Oil Prices Spur Buyback Activity in Airline Space
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AAL
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https://www.nasdaq.com/articles/decline-in-oil-prices-spur-buyback-activity-in-airline-space-2015-09-04
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nan
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nan
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It is no secret that falling oil prices have been a godsend for stocks in the airline space. This is because fuel costs account for a major chunk of an airline's operating expenses.
Despite the recent rally, crude prices have been hovering around the $40 a barrel mark. This represents a significant decline from the approximate $105 per barrel witnessed in July last year. The reduction in oil prices has brought down operating expenses significantly for carriers, thereby aiding their bottom lines.
Lower jet fuel prices have been a boon for the airline industry given the inversely proportional relation between crude prices and the value of aviation stocks. According to data released by the Bureau of Transportation Statistics, jet fuel costs plummeted 37.8% on a year-over-year basis to $1.83 per gallon in July 2015.
Low Fuel Costs = Massive Savings
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. Major companies like Delta Air Lines DAL , American Airlines Group AAL , United Continental Holdings, Inc. UAL , Alaska Air Group ALK and Virgin America VA posted better-than-expected earnings in the second quarter of 2015, backed by low fuel costs.
American Airlines Group, which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 due to soft oil prices. Delta, which has restructured its fuel hedge portfolio in the wake of the soft fuel price environment, expects to generate savings over $2 billion in 2015. Delta stated on its second quarter 2015 conference call that it expects fuel costs per gallon in the band of $1.90 to $2.00 through the rest of the year. The projection is well below the $2.65 per gallon spent in the first half of 2015.
Other carriers like United Continental and Southwest Airlines LUV are also on track to generate huge savings in 2015 due to the massive reduction in oil prices.
Fuel Savings = Shareholders' Gain
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.
With dividend hikes and authorization of new buyback programs characterizing the airline space of late, it can be said that shareholders are also reaping the benefits of weak oil prices.
Surge in Buybacks
In May this year, the board of directors at Delta approved a new share repurchase program worth $5 billion. Simultaneously, the airline behemoth increased its quarterly dividend by 50% to 13.50 cents per share (54 cents per share annualized). The new repurchase plan, which will replace the existing $2 billion share buyback, runs through 2017. Delta expects to return in excess of $6 billion to its shareholders through 2017.
Southwest Airlines is also treading the same path. Also in May, Dallas-based low-cost carrier Southwest Airlines' board declared the approval of a new stock repurchase program worth $1.5 billion. Simultaneously, the carrier hiked its quarterly dividend by 25% to 7.5 cents per share (30 cents per share annualized).
Not to be left behind, American Airlines, in July, announced that its board of directors has cleared a fresh buyback program worth $2 billion. This is in addition to the one announced in Jan 2015. Also, in July, United Continental announced a new share repurchase program worth $3 billion, which will run through 2017.
To Conclude
With oil prices expected to remain weak through the remainder of 2015, carriers should continue to generate massive savings. This should see a further uptick in shareholder friendly activities including share buybacks. Consequently, augmenting your portfolio with airline stocks sporting solid financial health is not a bad idea.
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SOUTHWEST AIR (LUV): Free Stock Analysis Report
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VIRGIN AMERICA (VA): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Major companies like Delta Air Lines DAL , American Airlines Group AAL , United Continental Holdings, Inc. UAL , Alaska Air Group ALK and Virgin America VA posted better-than-expected earnings in the second quarter of 2015, backed by low fuel costs. 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 ALASKA AIR GRP (ALK): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group, which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 due to soft oil prices.
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Major companies like Delta Air Lines DAL , American Airlines Group AAL , United Continental Holdings, Inc. UAL , Alaska Air Group ALK and Virgin America VA posted better-than-expected earnings in the second quarter of 2015, backed by low fuel costs. 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 ALASKA AIR GRP (ALK): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. Low Fuel Costs = Massive Savings Weak oil prices have resulted in tremendous savings for carriers.
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Major companies like Delta Air Lines DAL , American Airlines Group AAL , United Continental Holdings, Inc. UAL , Alaska Air Group ALK and Virgin America VA posted better-than-expected earnings in the second quarter of 2015, backed by low fuel costs. 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 ALASKA AIR GRP (ALK): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group, which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 due to soft oil prices.
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Major companies like Delta Air Lines DAL , American Airlines Group AAL , United Continental Holdings, Inc. UAL , Alaska Air Group ALK and Virgin America VA posted better-than-expected earnings in the second quarter of 2015, backed by low fuel costs. 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 ALASKA AIR GRP (ALK): Free Stock Analysis Report VIRGIN AMERICA (VA): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group, which does not hedge fuel costs, expects to generate savings to the tune of $4.8 billion in 2015 due to soft oil prices.
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8268.0
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2015-09-04 00:00:00 UTC
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American Airlines (AAL) Strengthens Ties with Expedia
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AAL
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https://www.nasdaq.com/articles/american-airlines-aal-strengthens-ties-with-expedia-2015-09-04
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nan
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nan
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Recently, premier passenger carrier American Airlines GroupAAL strengthened its partnership with Expedia, Inc. EXPE by extending the distribution of US Airways and American Airlines flights on Expedia, Travelocity and Hotwire sites.
Furthermore, Expedia Affiliate Network (EAN) and AA Vacations landed a deal wherein EAN will distribute hotel content on American Airlines' official website.
Meanwhile, the agreement renewal with Expedia will certainly allow American Airlines to provide flexible seat booking options to passengers.
Customers who often use select sites to shop and book trips within the Expedia portfolio will gain access to seating choices starting late 2015. The seat options will mainly include Main Cabin Extra seats that provide up to six inches of additional leg room and priority boarding as well as Preferred seats with standard legroom in a more favorable cabin location. Expedia fliers will also be able to easily identify, select and purchase these paid seating options via the online seat map.
Meanwhile, American Airlines and Qantas Airways broadened their network by flagging off new flights on the U.S. and Australia network. However, the American Airlines forecasts a 6% to 8% drop in passenger revenue per available seat mile for the third quarter of 2015. We believe that the decline may be brought about by persistently low oil prices and foreign currency exchange rate risks.
In the same league, Delta Air Lines Inc. DAL reported a 6.5% drop in PRASM (passenger revenue per available seat mile) in the month of August, due to factors similar to those predicted by American Airlines.
Currently, American Airlines carries a Zacks Rank #3 (Hold). A better-ranked stock in the airline space is JetBlue Airways Corp. JBLU with 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 >>
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EXPEDIA INC (EXPE): 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.
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Recently, premier passenger carrier American Airlines GroupAAL strengthened its partnership with Expedia, Inc. EXPE by extending the distribution of US Airways and American Airlines flights on Expedia, Travelocity and Hotwire sites. Click to get this free report EXPEDIA INC (EXPE): 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. Meanwhile, the agreement renewal with Expedia will certainly allow American Airlines to provide flexible seat booking options to passengers.
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Click to get this free report EXPEDIA INC (EXPE): 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. Recently, premier passenger carrier American Airlines GroupAAL strengthened its partnership with Expedia, Inc. EXPE by extending the distribution of US Airways and American Airlines flights on Expedia, Travelocity and Hotwire sites. In the same league, Delta Air Lines Inc. DAL reported a 6.5% drop in PRASM (passenger revenue per available seat mile) in the month of August, due to factors similar to those predicted by American Airlines.
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Recently, premier passenger carrier American Airlines GroupAAL strengthened its partnership with Expedia, Inc. EXPE by extending the distribution of US Airways and American Airlines flights on Expedia, Travelocity and Hotwire sites. Click to get this free report EXPEDIA INC (EXPE): 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. In the same league, Delta Air Lines Inc. DAL reported a 6.5% drop in PRASM (passenger revenue per available seat mile) in the month of August, due to factors similar to those predicted by American Airlines.
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Click to get this free report EXPEDIA INC (EXPE): 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. Recently, premier passenger carrier American Airlines GroupAAL strengthened its partnership with Expedia, Inc. EXPE by extending the distribution of US Airways and American Airlines flights on Expedia, Travelocity and Hotwire sites. Meanwhile, the agreement renewal with Expedia will certainly allow American Airlines to provide flexible seat booking options to passengers.
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8269.0
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2015-09-03 00:00:00 UTC
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The Zacks Analyst Blog Highlights: United Continental, Republic Airways, JetBlue Airways and American Airlines
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AAL
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https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-united-continental-republic-airways-jetblue-airways-and
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For Immediate Release
Chicago, IL - September 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 United Continental Holdings ( UAL ), Republic Airways Holdings Inc. ( RJET ), JetBlue Airways Corp. ( JBLU ) and American Airlines Group ( AAL ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Wednesday's Analyst Blog:
Airline Stock Roundup: United to S&P, Chapter 11 for Republic?
The past week saw a new member from the airline space making its way into the coveted S&P 500 index - United Continental Holdings ( UAL ). The carrier is set to join the much sought-after list from Sep 2 (after market close), replacing Hospira, Inc. which will be acquired by Pfizer.
Intensifying labor troubles at Indianapolis-based Republic Airways Holdings Inc. ( RJET ), the parent company of Republic Airlines and Shuttle America, also made for some noise. This has raised the question as to whether the carrier will now file for Chapter 11 bankruptcy protection. Meanwhile, low-cost carrier JetBlue Airways Corp. ( JBLU ) took forward its efforts to expand, announcing plans to add flights on the New York-Southern California route.
On the price front, the NYSE ARCA Airline index declined 0.65% over the past week as oil prices fluctuated wildly. Moreover, global concerns, with worries regarding China's economic slowdown at the forefront, weighed on stocks.
(Read the last Airline Stock Roundup for Aug 26, 2015 ).
Recap of the Past Week's Most Important Stories
1. United Continental Holdings is set to join the S&P 500 after market close on Sep 2, 2015. United Continental will become the second airline stock to join the S&P 500 this year, after American Airlines Group ( AAL ) made its way into the much sought-after benchmark in March (read more United Continental to Join Prestigious S&P 500 Benchmark ).
2. Republic Airways suffered a body blow when, according to a Bloomberg report, national Teamster officials backed the local pilot union's (Teamsters' Local 357) adverse recommendation pertaining to pilots voting on the "last, best and final offer" made by the beleaguered company.
The Bloomberg report stated that the adverse recommendation from the local pilot union originated due to the presence of a clause in the contract that would stand in the way of the union from encouraging its members taking up jobs at other regional carriers (read more: Will Republic Airways File For Bankruptcy? Shares Plunge ).
3. The recent upward movement of oil prices has put the spotlight on the hedging strategies being used by different carriers to mitigate or offset the probability of losses due to fluctuations in oil prices. Although it is a fact that most carriers hedge at least some of their fuel costs, the majority of them should still continue to benefit considerably from the plunge in oil prices.
Despite the recent rally, crude prices have been hovering around the $42/barrel mark. This represents a significant decline from the approximately $105 per barrel witnessed in July last year. With oil prices expected to be soft at least through the remainder of 2015, carriers may look at the present time as a favorable one for fresh hedging to lock in future fuel prices (read more: How Do Airlines Hedge Against Rising Fuel Prices? ).
4. In a bid to expand further and improve customer convenience, JetBlue Airways has decided to ramp up its seasonal non-stop flight service between New York's John F. Kennedy International Airport (JFK) and Palm Springs International Airport (PSP) in Southern California. The service is expected to commence this winter, subject to government approval (read more: JetBlue to Add Flights on New York-Southern California Route ).
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About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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.
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UNITED CONT HLD (UAL): Free Stock Analysis Report
REPUBLIC AIRWAY (RJET): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): 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.
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Stocks recently featured in the blog include the United Continental Holdings ( UAL ), Republic Airways Holdings Inc. ( RJET ), JetBlue Airways Corp. ( JBLU ) and American Airlines Group ( AAL ). United Continental will become the second airline stock to join the S&P 500 this year, after American Airlines Group ( AAL ) made its way into the much sought-after benchmark in March (read more United Continental to Join Prestigious S&P 500 Benchmark ). Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report REPUBLIC AIRWAY (RJET): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here.
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Stocks recently featured in the blog include the United Continental Holdings ( UAL ), Republic Airways Holdings Inc. ( RJET ), JetBlue Airways Corp. ( JBLU ) and American Airlines Group ( AAL ). Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report REPUBLIC AIRWAY (RJET): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. United Continental will become the second airline stock to join the S&P 500 this year, after American Airlines Group ( AAL ) made its way into the much sought-after benchmark in March (read more United Continental to Join Prestigious S&P 500 Benchmark ).
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Stocks recently featured in the blog include the United Continental Holdings ( UAL ), Republic Airways Holdings Inc. ( RJET ), JetBlue Airways Corp. ( JBLU ) and American Airlines Group ( AAL ). Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report REPUBLIC AIRWAY (RJET): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. United Continental will become the second airline stock to join the S&P 500 this year, after American Airlines Group ( AAL ) made its way into the much sought-after benchmark in March (read more United Continental to Join Prestigious S&P 500 Benchmark ).
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Stocks recently featured in the blog include the United Continental Holdings ( UAL ), Republic Airways Holdings Inc. ( RJET ), JetBlue Airways Corp. ( JBLU ) and American Airlines Group ( AAL ). United Continental will become the second airline stock to join the S&P 500 this year, after American Airlines Group ( AAL ) made its way into the much sought-after benchmark in March (read more United Continental to Join Prestigious S&P 500 Benchmark ). Click to get this free report UNITED CONT HLD (UAL): Free Stock Analysis Report REPUBLIC AIRWAY (RJET): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here.
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8270.0
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2015-09-03 00:00:00 UTC
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Consumer Sector Update for 09/03/2015: AAL,EXPE,GEF,FIVE
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AAL
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https://www.nasdaq.com/articles/consumer-sector-update-09032015-aalexpegeffive-2015-09-03
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Top Consumer Stocks
WMT +0.73%
MCD -0.07%
DIS +0.51%
CVS +1.10%
KO +0.62%
Consumer stocks were consolidating some of their earlier gains this afternoon, with shares of consumer staples companies in the S&P 500 jumping almost 0.8% while shares of consumer discretionary firms in the S&P 500 still were ahead by over 0.5%.
In company news, shares of American Airlines Group ( AAL ) were grounded Thursday despite the air carrier saying it has renewed an agreement for distribution of its flights and for US Airways flights on the Expedia ( EXPE ) travel reservation website.
The companies also said the Expedia Affiliate Network and AA Vacations have launched a new partnership for EAN to supply hotel content through the aa.com website.
AAL shares were down over 1% at $41.04 each, or just 5 cents above its session high. The stock already has risen about 8% over the past year before today's price gain, turning positive for the year in recent days ahead of its inclusion Thursday to the S&P 500.
EXPE shares were higher today, climbing about 0.5% to $113.93 a share.
In other sector news,
(+) GEF, (+18.0%) Adjusted Q3 EPS of $0.60 beats by $0.19 per share. Revenue slips 17.3% to $930 million, matching Street view. Raises FY15 earnings guidance by $0.20 to new range of $1.85 to $1.95 per share vs. $1.71 per share consensus.
(-) FIVE, (-8.6%) Q2 revenue rises 19.5% to $182.2 million, in-line with bottom end of revised forecast but still lagging the $184.7 millionconsensus. EPS of $0.13 meets Street view. Guides Q3 earnings below analyst estimates.
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.
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In company news, shares of American Airlines Group ( AAL ) were grounded Thursday despite the air carrier saying it has renewed an agreement for distribution of its flights and for US Airways flights on the Expedia ( EXPE ) travel reservation website. AAL shares were down over 1% at $41.04 each, or just 5 cents above its session high. The companies also said the Expedia Affiliate Network and AA Vacations have launched a new partnership for EAN to supply hotel content through the aa.com website.
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In company news, shares of American Airlines Group ( AAL ) were grounded Thursday despite the air carrier saying it has renewed an agreement for distribution of its flights and for US Airways flights on the Expedia ( EXPE ) travel reservation website. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. AAL shares were down over 1% at $41.04 each, or just 5 cents above its session high.
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In company news, shares of American Airlines Group ( AAL ) were grounded Thursday despite the air carrier saying it has renewed an agreement for distribution of its flights and for US Airways flights on the Expedia ( EXPE ) travel reservation website. AAL shares were down over 1% at $41.04 each, or just 5 cents above its session high. Consumer stocks were consolidating some of their earlier gains this afternoon, with shares of consumer staples companies in the S&P 500 jumping almost 0.8% while shares of consumer discretionary firms in the S&P 500 still were ahead by over 0.5%.
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In company news, shares of American Airlines Group ( AAL ) were grounded Thursday despite the air carrier saying it has renewed an agreement for distribution of its flights and for US Airways flights on the Expedia ( EXPE ) travel reservation website. AAL shares were down over 1% at $41.04 each, or just 5 cents above its session high. Revenue slips 17.3% to $930 million, matching Street view.
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8271.0
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2015-09-02 00:00:00 UTC
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Meet The Manager Of A Top Performing Mutual Fund
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AAL
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https://www.nasdaq.com/articles/meet-manager-top-performing-mutual-fund-2015-09-02
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Best Mutual Funds 2015:August Performance Report
S ophomore slump? Not for Joe Fath. He took the helm of $47 billion T. Rowe Price Growth Stock Fund a year and a half ago -- on Jan. 16, 2014. In that first calendar year in charge, his fund's 8.83% gain topped only 35% of its large-cap growth rival mutual funds tracked by Morningstar Inc.
This year -- in which the broad market has imitated a bucking bronco -- his fund has climbed 5.93% as of Aug. 31 , outperforming a whopping 96% of its peer investors.
Fath is more concerned with the longer term. The broad market's rally of nearly 6-1/2 years has made it increasingly hard for him to find attractively valued growth stocks .
The late-summer volatility has made it harder to find gainers.
Fath, who is about to celebrate his 45th birthday, talked with IBD from his office in Baltimore about why his mutual fund is performing so much better this year than last year and about how he is searching for new market leaders.
IBD: When you took charge of this fund, you cut the size of the overall portfolio and of its top 10 names. You initially trimmed to 100, down from 118, and more recently you're at 106 as of July 31. Is your initial retooling complete?
Fath: I'm where I want to be. The tail end of the fund is half what it used to be. It's 10% of the fund now. The top 10 decreased a little bit. The middle is bigger.
IBD: How does each segment differ?
Fath: I describe my philosophy as an upside-down pyramid. The top slice is secular-growth names. That typically makes up 50% to 60% of the portfolio. Those are innovative disrupters that are the most dynamic growth companies.
The middle section would be more cyclical opportunities. These would typically be 20% to 25% of the portfolio. They're likely to be more opportunistic and have shorter holding periods in the fund than the average holding.
The last section would be what I generally characterize as special situations. These are in three primary areas:
First, stocks transitioning from value to growth.
Second, companies underway in a lasting industry structural change, like what has been going on the last several years in the U.S. airline sector.
Third, roll-ups, where strong management teams that are good capital allocators are applying discipline and efficiency in fragmented industries through acquisition.
This bucket will typically be 20% to 25% of the portfolio.
The top 10 or 20 names are generally the most compelling secular ideas. The tail of my portfolio has the smallest holdings and are typically my farm team -- earlier-stage growth names and private companies that I own.
IBD: Give me some examples of special situations, please.
Fath: Gilead Sciences ( GILD ) went through the value-to-growth transition when it bought Pharmasset and got into (treating) hep C in addition to its core HIV business.
Airlines are in the industry structural change category, and I ownAmerican Airlines ( AAL ) andUnited Continental ( UAL ).
Valeant Pharmaceuticals ( VRX ) is in the roll-up category, bringing capital allocation discipline to the pharma industry through an assertive allocation strategy.
IBD: Name examples from your secular bucket, please.
Fath: Amazon ( AMZN ) would be the poster child.Tesla (TSLA) is a bit more extreme. It's an on-the-come story. Other names includePriceline (PCLN),MasterCard (MA) andVisa (V).
IBD: And name some from your cyclical bucket, please.
Fath: Stuff in financials like TD Ameritrade (AMTD) andMorgan Stanley (MS) to a degree, but it is also a shifting business model, looking more like a value-to-growth shift.
In industrials, I hold names likeFedEx (FDX),Canadian Pacific Railway (CP) andFlowserve (FLS), an energy industrial for the most part.
IBD: Why has fund performance zoomed up this year -- at least until the broad sell-off?
Fath: It was a drag last year when secular-growth names sold off. A lot of that was due to people wanting to see more transparency in big names. They wanted to see Amazon break out its core e-commerce business and Amazon Web Services. That company is becoming more disciplined on expenses and costs.
And we're starting to see that inGoogle (GOOGL).
This year I've taken up the health care weighting significantly. And I've taken down energy. Both moves paid off.
I have a number of biotech and managed care and big-pharma names. That's played well. There's been some M&A activity in that space.
IBD: So you have a bigger bet on growth this year, and that has paid off?
Fath: The slowdown in growth happened prior to the sell-off in 2014.
I was positioned for a cyclical recovery, but that didn't play out. It's been the reverse in 2015.
We've been in a slow-growth environment. And the world has been thrown off by exogenous shocks like Greece and China, which is devaluing its currency.
Those external factors help make growth more valuable. That bids up the valuations of companies that are delivering growth.
But you've got to be disciplined about position sizes.
Google, Priceline -- their outlooks look good. They've gone through heavy investment cycles.
Google has a new CFO, Ruth Porat, who came from Morgan Stanley. They're creating a new holding company called Alphabet, which will give more visibility to profitability of the core company going forward. People wanted more transparency there, and Google is starting to provide it.
IBD: Let's talk about some of your interesting names, as of your latest disclosure. Do you share the concerns that some people have aboutApple (AAPL)?
Fath: It's done well. But I've been underweight. The stock peaked around 130. It's been sort of trading sideways. I'm guarded.
The most constructive part is its valuation and capital structure.
The worry has been about the company after this iPhone cycle.
They've done well with iPhone. Now the issue is its replacement cycle. What we underestimated is how impactful the replacement cycle would be.
I remain concerned about their ability to innovate, and does that drive enough of a replacement? They've done so well. Can they grow (as fast) off this base? It's hard to drive a higher multiple.
We'll see where it will go. The watch doesn't look like it will be a success -- or at least not move the needle enough. I do own it. I don't have it overweight.
IBD: Why should anyone likeFacebook (FB), whose earnings per share growth has slowed a lot for two quarters?
Fath: They've done everything right. Right now things are in transition in mobile. As they get a big base (of users), revenue growth is slowing as they invest in new initiatives. And they want a lot of users before they turn on the monetization engine.
They have 300 million users on Instagram, a lot on WhatsApp. They have 1.5 billion users on Facebook. They'll monetize over time, so profit will reaccelerate.
IBD: What's your thesis for Facebook's Oculus, which is buying Israel's Pebbles Interfaces, which specializes in depth-sensing tools that can track hand movement?
Fath: Oculus is a virtual reality play. It's interesting, but not a needle mover, but it's on the come. It's a green banana. It still needs to ripen. It shows (Mark) Zuckerberg is thinking multidecades.
IBD: What's your Visa thesis?
Fath: It ties in with durability of growth because it is at the center of online payments, the movement from cash and checks to digital and disruption.
In the U.S., cards still use magnetic swipes, but they are moving to chips with a PIN. All cards will be reissued with chips imbedded. That makes it much harder to steal card information.
A lot of retailers have been reluctant to make this change because they'd have to change their payment hardware at the register. But they're finally starting to change.
Visa Europe is another potential driver for Visa. Visa's takeover looks like it's coming to fruition. Maybe there will be an announcement in October.
IBD: You've built your stake inCelgene (CELG) for at least four quarters. What do you like?
Fath: The biotechs I want to own are going after big markets.
Over time, Celgene has built an arsenal where they can go after multiple things. Revlimid has been an anchor to what they do. But they've acquired companies and build their own franchise.
Now they've got Otezla, an immunology drug, for psoriasis (and psoriatic arthritis).
They've also got a cancer drug, Pomalyst, and chemotherapy treatment, Abraxane (acquired through Abraxis).
Another drug they acquired is GD-301 for treatment of Crohn's disease. Early trials are promising.
There's a patent cliff ahead for Revlimid. They'll protect it as long as possible.
And there's their recent acquisition of Receptos, which was viewed as a pretty reasonable price relative to some other deals. It's attacked multiple indications, but the most promising appears to be in gastrointestinal (disorders like) colitis and Crohn's.
IBD: Why have you been trimming your stake in Gilead Sciences?
Fath: They're a victim of their own success. They turned what was a chronic disease into an acute disease that is treatable.
Their treatment for hepatitis C is a monster drug. But its cure rate is almost 100% in eight to 12 weeks. Once someone is cured, they've got to find new patients.
IBD: You've also pared your stake inRegeneron (REGN). What's your outlook?
Fath: I probably shouldn't have trimmed. They've got a good core franchise in Eylea, which is used for treating wet age-related macular degeneration in the eye. Now it's also used for diabetic macular edema and retinal vein occlusion.
They've got a powerful pipeline.
IBD: You've paredStarbucks (SBUX). What are your concerns?
Fath: I still feel good about their core story. Our trims are just position-size management.
They have a lot of presence, not just in the U.S., but globally. They've introduced nice food with their purchase of La Boulange. They're driving new traffic in the afternoon and evenings. They've got a good China story. Their menu is being broadened.
Their next big thing is moving bodies through the line. They're rolling out a mobile order-and-pay system, where you pay through your cellphone and dictate the delivery time. Then you walk into the store and your coffee is ready.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Airlines are in the industry structural change category, and I ownAmerican Airlines ( AAL ) andUnited Continental ( UAL ). Third, roll-ups, where strong management teams that are good capital allocators are applying discipline and efficiency in fragmented industries through acquisition. Fath: Gilead Sciences ( GILD ) went through the value-to-growth transition when it bought Pharmasset and got into (treating) hep C in addition to its core HIV business.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Airlines are in the industry structural change category, and I ownAmerican Airlines ( AAL ) andUnited Continental ( UAL ). He took the helm of $47 billion T. Rowe Price Growth Stock Fund a year and a half ago -- on Jan. 16, 2014.
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Airlines are in the industry structural change category, and I ownAmerican Airlines ( AAL ) andUnited Continental ( UAL ). In that first calendar year in charge, his fund's 8.83% gain topped only 35% of its large-cap growth rival mutual funds tracked by Morningstar Inc. Fath, who is about to celebrate his 45th birthday, talked with IBD from his office in Baltimore about why his mutual fund is performing so much better this year than last year and about how he is searching for new market leaders.
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Airlines are in the industry structural change category, and I ownAmerican Airlines ( AAL ) andUnited Continental ( UAL ). Fath: I'm where I want to be. Fath: It's done well.
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8272.0
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2015-09-01 00:00:00 UTC
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The Zacks Analyst Blog Highlights: Delta Air Lines, American Airlines, United Continental Holdings, Southwest Airlines and JetBlue Airways
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AAL
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https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-delta-air-lines-american-airlines-united-continental
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nan
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For Immediate Release
Chicago, IL - September 01, 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 Delta Air Lines ( DAL ), American Airlines Group ( AAL ), United Continental Holdings, Inc. ( UAL ), Southwest Airlines ( LUV ) and JetBlue Airways ( JBLU ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Monday's Analyst Blog:
How Do Airlines Hedge Against Higher Fuel Prices?
The airline industry is cyclical in nature and sensitive to a number of key drivers, the most prominent being the global price of crude oil . It is a well-known fact that movements in oil prices have a significant impact on the well-being of companies in the airline space.
Fuel costs account for a significant chunk of an airline company's operating expenses. Consequently, lower the oil prices, the merrier for airline stocks. This has been the trend for the last year or so. The persistent fall in oil prices has tremendously boosted the bottom lines of most airline stocks. Major companies like Delta Air Lines ( DAL ), American Airlines Group ( AAL ) and United Continental Holdings, Inc. ( UAL ) posted better-than-expected earnings in the second quarter of 2015, aided by low fuel costs.
Oil Price Fluctuations Put Carriers' Hedging Strategies in Focus
Oil prices have fluctuated wildly over the past few months. Early last week, WTI crude dipped below $39 per barrel for the first time in more than six years. However, oil prices have rebounded over the last couple of days and ended last week at $45.22 a barrel. The wild fluctuations is the price of this key commodity for airlines has obviously put the hedging tools used by carriers to cope with rising oil prices back in spotlight. The carriers use a combination of calls, swaps and collars at varying WTI crude-equivalent price levels to hedge.
We note that despite the substantial rise in oil prices over the last couple of days, airline stocks have held their own. The NYSE ARCA Airline index has gained 1.6% over the last couple of days despite the strong rise in oil prices. Stocks like Delta Air Lines and United Continental which resort to hedging as a protection against the surge in oil prices, have gained over the period despite the inverse relation between oil prices and the value of aviation stocks.
Fuel Hedging Strategies
By definition Hedging in the world of Finance indicates a risk management strategy which is used to mitigate or offset the probability of suffering losses due to fluctuations in the prices of commodities, currencies, or securities. To achieve the objective the tool, which basically lends protection against unforeseen events, mostly involves the purchase of securities that move in the opposite direction than the asset being protected.
Hedging strategies are widely used by airline companies as a profit protection tool to cope with the rising fuel prices. According to a report appearing in the Conversion hedging is most prevalent among low-cost carriers like Southwest Airlines ( LUV ) and JetBlue Airways ( JBLU ). They are highly exposed to the swings in fuel prices as all other expenses are reduced to the minimum level by these carriers.
One of the most prevalent derivatives to hedge risk are futures contracts. The contract takes place between the buyer and the seller and basically obligates both parties to buy or sell an asset at the price agreed upon at the time the transaction. Delivery and payment take place at a future specified date. The contracts between the parties, used to mitigate their risk exposures to potentially rising oil prices, are negotiated on a futures exchange, such as CME/NYMEX or ICE.
Moreover, airline companies also make use of a fuel swap to hedge their exposure to the fluctuations in fuel prices. A jet fuel swap refers to an agreement between two parties which ensures that a floating (market) price is exchanged for a fixed price over a specific time period. Moreover, options, costless collars and call option spreads are other hedging strategies utilized by carriers to protect themselves from volatile fuel prices.
Different Approaches
The approaches of different carriers vary with respect to hedging. While some carriers hedge aggressively almost their entire fuel requirements others like American Airlines do not resort to hedging. With oil prices way below the highs reached in mid 2014, Delta, which hedges aggressively has recorded hedging related losses to the tune of $313 million in the first half of 2015.
Delta modified its hedging portfolio earlier this year. The Atlanta-based carrier resorted to the early settlement of certain 2015 hedges and deferred the same of a portion of the remaining positions. The carrier recorded fuel hedging gains of $98 million in the second quarter of 2015.
Delta is not the sole carrier to restructure its fuel hedge portfolio in the wake of the soft fuel price environment. United Continental too has walked the same path. The California-based carrier, which recorded hedging losses to the tune of $200 million in the second quarter, is hedging 22% of its fuel for the second half of 2015 and only 5% for 2016.
Good Time to Hedge?
With oil prices fluctuating wildly, the hedging schemes adopted by various carriers are in spotlight. Although it is a fact that most carriers hedge at least some of their fuel costs, the majority of them should still continue to benefit considerably from the plunge in oil prices.
Despite the recent rally, crude prices have been hovering around the $40 a barrel mark. This represents a significant decline from the approximately $105 per barrel witnessed in July last year. With oil prices expected to be soft at least in the remainder of 2015, carriers may look at the present time as a favorable one for fresh hedging to lock in future fuel prices.
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DELTA AIR LINES (DAL): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
SOUTHWEST AIR (LUV): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Major companies like Delta Air Lines ( DAL ), American Airlines Group ( AAL ) and United Continental Holdings, Inc. ( UAL ) posted better-than-expected earnings in the second quarter of 2015, aided by low fuel costs. Stocks recently featured in the blog include the Delta Air Lines ( DAL ), American Airlines Group ( AAL ), United Continental Holdings, Inc. ( UAL ), Southwest Airlines ( LUV ) and JetBlue Airways ( JBLU ). 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 SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report To read this article on Zacks.com click here.
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Stocks recently featured in the blog include the Delta Air Lines ( DAL ), American Airlines Group ( AAL ), United Continental Holdings, Inc. ( UAL ), Southwest Airlines ( LUV ) and JetBlue Airways ( JBLU ). Major companies like Delta Air Lines ( DAL ), American Airlines Group ( AAL ) and United Continental Holdings, Inc. ( UAL ) posted better-than-expected earnings in the second quarter of 2015, aided by 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 SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report To read this article on Zacks.com click here.
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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 SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report To read this article on Zacks.com click here. Stocks recently featured in the blog include the Delta Air Lines ( DAL ), American Airlines Group ( AAL ), United Continental Holdings, Inc. ( UAL ), Southwest Airlines ( LUV ) and JetBlue Airways ( JBLU ). Major companies like Delta Air Lines ( DAL ), American Airlines Group ( AAL ) and United Continental Holdings, Inc. ( UAL ) posted better-than-expected earnings in the second quarter of 2015, aided by low fuel costs.
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Stocks recently featured in the blog include the Delta Air Lines ( DAL ), American Airlines Group ( AAL ), United Continental Holdings, Inc. ( UAL ), Southwest Airlines ( LUV ) and JetBlue Airways ( JBLU ). Major companies like Delta Air Lines ( DAL ), American Airlines Group ( AAL ) and United Continental Holdings, Inc. ( UAL ) posted better-than-expected earnings in the second quarter of 2015, aided by 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 SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report To read this article on Zacks.com click here.
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8273.0
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2015-08-31 00:00:00 UTC
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Nasdaq 100 Movers: WYNN, SPLS
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AAL
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https://www.nasdaq.com/articles/nasdaq-100-movers-wynn-spls-2015-08-31
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nan
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nan
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In early trading on Monday, shares of Staples ( SPLS ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 1.2%. Year to date, Staples has lost about 23.2% of its value.
And the worst performing Nasdaq 100 component thus far on the day is Wynn Resorts ( WYNN ), trading down 3.1%. Wynn Resorts is lower by about 49.1% looking at the year to date performance.
Two other components making moves today are Micron Technology ( MU ), trading down 3.0%, and American Airlines Group ( AAL ), trading up 1.2% on the day.
VIDEO: Nasdaq 100 Movers: WYNN, SPLS
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Two other components making moves today are Micron Technology ( MU ), trading down 3.0%, and American Airlines Group ( AAL ), trading up 1.2% on the day. Wynn Resorts is lower by about 49.1% looking at the year to date performance. VIDEO: Nasdaq 100 Movers: WYNN, SPLS The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Two other components making moves today are Micron Technology ( MU ), trading down 3.0%, and American Airlines Group ( AAL ), trading up 1.2% on the day. And the worst performing Nasdaq 100 component thus far on the day is Wynn Resorts ( WYNN ), trading down 3.1%. VIDEO: Nasdaq 100 Movers: WYNN, SPLS The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Two other components making moves today are Micron Technology ( MU ), trading down 3.0%, and American Airlines Group ( AAL ), trading up 1.2% on the day. In early trading on Monday, shares of Staples ( SPLS ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 1.2%. And the worst performing Nasdaq 100 component thus far on the day is Wynn Resorts ( WYNN ), trading down 3.1%.
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Two other components making moves today are Micron Technology ( MU ), trading down 3.0%, and American Airlines Group ( AAL ), trading up 1.2% on the day. In early trading on Monday, shares of Staples ( SPLS ) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 1.2%. And the worst performing Nasdaq 100 component thus far on the day is Wynn Resorts ( WYNN ), trading down 3.1%.
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8274.0
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2015-08-30 00:00:00 UTC
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At Least One Middle Eastern Airline Giant Is Fueled by Subsidies
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AAL
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https://www.nasdaq.com/articles/least-one-middle-eastern-airline-giant-fueled-subsidies-2015-08-30
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nan
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nan
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The Persian Gulf region is home to three rapidly growing airlines: Emirates, Qatar Airways, and Etihad Airways. This year, the top U.S. airlines -- American Airlines , Delta Air Lines , and United Continental -- have invested a considerable amount of effort in proving that all three are state-subsidized enterprises.
Three U.S. airlines have complained about unfair competition from Middle Eastern carriers. Photo: American Airlines.
The three Gulf carriers have expanded rapidly in the U.S. in the past few years, thanks to Open Skies treaties that have ended government regulation of which airlines fly which international routes. But American, Delta, and United want the U.S. government to step in again, arguing that Emirates, Qatar Airways, and Etihad Airways are competing unfairly.
The U.S. legacy carriers purportedly uncovered $42 billion in state subsidies and similar benefits to the three Gulf carriers over the past decade. Some aspects of the charges they have leveled are debatable. However, in the case of Etihad Airways, there appears to be overwhelming evidence of massive state subsidies.
Aviation as a strategic industry
The governments of the United Arab Emirates and Qatar have wisely realized that their oil wealth won't last forever. As a result, they have actively worked to diversify their economies.
The airline and air cargo businesses have been central to those plans. Not only do they provide jobs directly, they also help boost the broader economy by making it easier to do business in the region.
As a result, the government of Qatar and the emirates of Dubai and Abu Dhabi have all set up airlines -- Qatar Airways, Emirates, and Etihad, respectively -- and invested heavily in them. Emirates is the oldest of the three, having been founded in the 1980s. Qatar Airways launched in the early 1990s, while Etihad Airways was only launched in 2003.
Living on government subsidies?
In January, the Partnership for Open & Fair Skies -- backed by American Airlines, Delta Air Lines, and United Continental -- released a white paper detailing subsidies and quasi-subsidies to the Gulf carriers. The report quantified the subsidies as follows: at least $17 billion in subsidies for Etihad, more than $16 billion for Qatar Airways, and at least $5 billion for Emirates.
Each of the Gulf carriers has rejected these claims to one extent or another. In the case of Emirates, the oldest and largest of the three, the subsidy claims are weakest. The biggest part of the supposed subsidies to Emirates came in the form of fuel hedging losses that Emirates moved off its books in 2008-2009. Yet Emirates has countered that this was done only for accounting purposes and that it ultimately covered the losses.
Emirates has refuted some of the subsidy allegations made against it. Photo: Emirates.
The other main subsidy allegation for Emirates relates to Dubai's policy of keeping airport usage fees dirt cheap despite its heavy spending on airport infrastructure. However, since any airline operating in Dubai can benefit from this policy, this isn't a clear case of government subsidies to Emirates.
The case against Etihad Airways is compelling
Even if Emirates doesn't rely on government subsidies to stay in business, the same can't be said for the other Gulf carriers. The evidence that Etihad Airways relies upon subsidies from Abu Dhabi's government is especially compelling.
In June, Etihad acknowledged that it had received $14.3 billion in capital from the government in the form of $9.1 billion of equity and $5.2 billion in loans. Even the loans are more like equity investments, as Etihad is not paying interest and has no set repayment schedule. Furthermore, in the past week, Etihad revealed another $2.5 billion capital injection that occurred last year.
Etihad Airways has argued that the government's investments in it don't automatically make it a subsidized business. However, if the government does not expect a reasonable return on its investment, then the cash infusions look much more like subsidies.
Etihad earned a "record" paper profit of just $73 million last year, and would have lost hundreds of millions of dollars had it not sold a subsidiary to a different part of the group. If it were publicly traded, Etihad's market cap would be a tiny fraction of the sums Abu Dhabi's government has "invested" in it -- and the company might even be totally worthless.
Etihad has continuously hemorrhaged cash. Photo: Etihad Airways.
This isn't very surprising. The Gulf carriers are chasing the same passengers with similar business models. Given that Etihad is the youngest and smallest of the three, it is fighting from a position of weakness. And since all three airlines are growing so quickly, they need to reduce fares for economy passengers and offer ever-more luxurious accommodations for first-class customers to stimulate demand. That's a clear recipe for weak profitability.
The case for action is mixed
Unfortunately for American, Delta, and United, offering a strong case that Etihad (and perhaps also Qatar Airways) is state-subsidized may not cause the U.S. government to act to slow its growth.
Several U.S. airlines rely on the sanctity of Open Skies treaties to smooth their global expansion plans. Others benefit from connecting traffic generated by the Gulf carriers. U.S. consumers are saving money thanks to the availability of cheap fares to many international destinations.
Perhaps most significantly, the three Gulf carriers have firm orders for hundreds of Boeing planes worth tens of billions of dollars (even after customary discounts). Etihad alone has 92 firm orders outstanding -- probably worth nearly $15 billion after discounts.
In other words, there are strong competing economic interests arguing for allowing Etihad and its rivals to grow unchecked in the United States. Even if they are competing unfairly against American, Delta, and United, the U.S. government could reasonably decide not to intervene.
Find this article informative?
The Motley Fool's mission is to help the world invest, better. We have done this over the past 20 years by thinking long term and outside the box -- even if that means turning Wall Street on its head. To learn more about what The Motley Fool thinks about current investment trends, and receive a special free report about what might be the next big industry to come out of Silicon Valley, just click here now .
The article At Least One Middle Eastern Airline Giant Is Fueled by Subsidies originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of The Boeing Company and 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 has no position in any of the stocks mentioned. 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.
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The three Gulf carriers have expanded rapidly in the U.S. in the past few years, thanks to Open Skies treaties that have ended government regulation of which airlines fly which international routes. In January, the Partnership for Open & Fair Skies -- backed by American Airlines, Delta Air Lines, and United Continental -- released a white paper detailing subsidies and quasi-subsidies to the Gulf carriers. To learn more about what The Motley Fool thinks about current investment trends, and receive a special free report about what might be the next big industry to come out of Silicon Valley, just click here now .
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This year, the top U.S. airlines -- American Airlines , Delta Air Lines , and United Continental -- have invested a considerable amount of effort in proving that all three are state-subsidized enterprises. As a result, the government of Qatar and the emirates of Dubai and Abu Dhabi have all set up airlines -- Qatar Airways, Emirates, and Etihad, respectively -- and invested heavily in them. Adam Levine-Weinberg owns shares of The Boeing Company and 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 has no position in any of the stocks mentioned.
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As a result, the government of Qatar and the emirates of Dubai and Abu Dhabi have all set up airlines -- Qatar Airways, Emirates, and Etihad, respectively -- and invested heavily in them. The report quantified the subsidies as follows: at least $17 billion in subsidies for Etihad, more than $16 billion for Qatar Airways, and at least $5 billion for Emirates. The case against Etihad Airways is compelling Even if Emirates doesn't rely on government subsidies to stay in business, the same can't be said for the other Gulf carriers.
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As a result, the government of Qatar and the emirates of Dubai and Abu Dhabi have all set up airlines -- Qatar Airways, Emirates, and Etihad, respectively -- and invested heavily in them. However, since any airline operating in Dubai can benefit from this policy, this isn't a clear case of government subsidies to Emirates. The case against Etihad Airways is compelling Even if Emirates doesn't rely on government subsidies to stay in business, the same can't be said for the other Gulf carriers.
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8275.0
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2015-08-28 00:00:00 UTC
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United Continental to Join Prestigious S&P 500 Benchmark
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AAL
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https://www.nasdaq.com/articles/united-continental-to-join-prestigious-sp-500-benchmark-2015-08-28
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nan
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nan
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Chicago, IL-based United Continental HoldingsUAL , the parent company of United Airlines, is set to join the coveted S&P 500 after market close on Sep 2, 2015. The carrier will replace healthcare company Hospira Inc. HSP , which is being acquired by pharmaceutical giant, Pfizer PFE . The news of the impending inclusion of United Continental in the prestigious index impacted the stock positively in after-market trading on Aug 27.
United Continental will become the second airline stock to join the S&P 500 this year, after American Airlines Group AAL made its way into the much sought-after benchmark in March.
With a portfolio of 500 leading companies that capture approximately 80% coverage of the available market capitalization, the S&P 500 is widely regarded as the best single measure of large cap U.S. equities. The list is periodically modified to do away with stocks that have been acquired by other companies, delisted from the stock exchange or fail to meet the mandatory criteria of the index. Consequently, other companies that meet the inclusion criteria are added to the list to replace the scrapped stocks.
A company needs to fulfill certain criteria to be included in the S&P 500. Firstly, its market capitalization should be at least $5.3 billion. As of Aug 27, 2015, the market capitalization of United Continental was $20.16 billion. Moreover, at least half the outstanding shares of the firm should be available for public trading.
In addition, the company needs to have sufficient liquidity and a reasonable price. The ratio of annual dollar value traded to float adjusted market capitalization should be 1 or greater. Also, the company should trade at least 250,000 shares in each of the six months leading up to the evaluation date.
To be listed on the S&P 500, a U.S. company needs to possess the following characteristics as well. It should file 10-K annual reports and should not be considered a foreign entity by the SEC. The U.S. portion of fixed assets and revenues must comprise a majority of the total, but need not be above 50%. When there is an inconsistency among these factors, assets establish plurality. Revenues determine plurality in the event of incomplete asset information. The company should follow a corporate governance structure in line with the U.S. practices.
The stock should be primarily listed on the NYSE (including NYSE Arca and NYSE MKT), the NASDAQ Global Select Market, the NASDAQ Select Market or the NASDAQ Capital Market. ADRs are not qualified for addition. Furthermore, the company should not have reported a loss in the immediately preceding quarter.
United Continental duly fulfills all these criteria and has thereby been added to the S&P 500 GICS "Industrials" sector or Airlines Sub-Industry index. We note that as of Jul 31, 2015, the "Information Technology" sector had the highest representation (19.8%) on the S&P 500 index. The Industrials sector came fifth in terms of representation (9.9%) while the Telecommunication Services sector was least represented (2.4%).
As of Jul 31, the mean market capitalization of the constituents was $39.35 billion, while the median market cap was approximately $18.09 billion.
As of Dec 31, 2014, United Continental maintained a fleet of 1,257 aircraft. The company operates in two divisions: Mainline and Regional Affiliates. Further, the company manages its business as an integrated network with assets deployed across its Mainline and regional carrier networks.
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HOSPIRA INC (HSP): Free Stock Analysis Report
PFIZER INC (PFE): 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.
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United Continental will become the second airline stock to join the S&P 500 this year, after American Airlines Group AAL made its way into the much sought-after benchmark in March. Click to get this free report HOSPIRA INC (HSP): Free Stock Analysis Report PFIZER INC (PFE): 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 news of the impending inclusion of United Continental in the prestigious index impacted the stock positively in after-market trading on Aug 27.
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Click to get this free report HOSPIRA INC (HSP): Free Stock Analysis Report PFIZER INC (PFE): 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 will become the second airline stock to join the S&P 500 this year, after American Airlines Group AAL made its way into the much sought-after benchmark in March. The stock should be primarily listed on the NYSE (including NYSE Arca and NYSE MKT), the NASDAQ Global Select Market, the NASDAQ Select Market or the NASDAQ Capital Market.
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Click to get this free report HOSPIRA INC (HSP): Free Stock Analysis Report PFIZER INC (PFE): 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 will become the second airline stock to join the S&P 500 this year, after American Airlines Group AAL made its way into the much sought-after benchmark in March. The list is periodically modified to do away with stocks that have been acquired by other companies, delisted from the stock exchange or fail to meet the mandatory criteria of the index.
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Click to get this free report HOSPIRA INC (HSP): Free Stock Analysis Report PFIZER INC (PFE): 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 will become the second airline stock to join the S&P 500 this year, after American Airlines Group AAL made its way into the much sought-after benchmark in March. As of Aug 27, 2015, the market capitalization of United Continental was $20.16 billion.
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8276.0
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2015-08-27 00:00:00 UTC
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Calls bet American Airlines will fly
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AAL
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https://www.nasdaq.com/articles/calls-bet-american-airlines-will-fly-2015-08-27
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nan
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nan
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(The following is an example of notable trading cited on optionMONSTER's InsideOptions Pro service yesterday.)
American Airlines flew higher yesterday, and the bulls were onboard.
optionMONSTER's Heat Seeker program detected buying in the Weekly 39.50 calls early yesterday, with traders snapping up 5,800 contracts for $0.27. Volume was more than 6 times open interest at the time, which indicated new money being put to work.
Long calls lock in the price where investors can purchase shares, allowing them profit from rallies with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis, which happened yesterday because the Weekly 39.50s almost doubled to $0.48 by the closing bell. (See our Education section)
AAL ended the session up 3.6 percent to $38.65. The stock has been trying to hold $38 after the market's recent slide to 10-month lows. The company has fared worse than major competitors Delta Air Lines and United Continental, which both remain positive on a trailing 12-month basis.
Overall option volume was almost triple average amounts in the session, with calls accounting for a bullish 71 percent of the total.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(See our Education section) AAL ended the session up 3.6 percent to $38.65. optionMONSTER's Heat Seeker program detected buying in the Weekly 39.50 calls early yesterday, with traders snapping up 5,800 contracts for $0.27. Their cheap cost can also generate significant leverage on a percentage basis, which happened yesterday because the Weekly 39.50s almost doubled to $0.48 by the closing bell.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. (See our Education section) AAL ended the session up 3.6 percent to $38.65. optionMONSTER's Heat Seeker program detected buying in the Weekly 39.50 calls early yesterday, with traders snapping up 5,800 contracts for $0.27.
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(See our Education section) AAL ended the session up 3.6 percent to $38.65. optionMONSTER's Heat Seeker program detected buying in the Weekly 39.50 calls early yesterday, with traders snapping up 5,800 contracts for $0.27. Their cheap cost can also generate significant leverage on a percentage basis, which happened yesterday because the Weekly 39.50s almost doubled to $0.48 by the closing bell.
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(See our Education section) AAL ended the session up 3.6 percent to $38.65. (The following is an example of notable trading cited on optionMONSTER's InsideOptions Pro service yesterday.) American Airlines flew higher yesterday, and the bulls were onboard.
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8277.0
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2015-08-26 00:00:00 UTC
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3 Airline Stocks Looking Great After the Global Selloff
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AAL
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https://www.nasdaq.com/articles/3-airline-stocks-looking-great-after-global-selloff-2015-08-26
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nan
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nan
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Fears about a looming economic slowdown in China and the potential impact of higher interest rates in the U.S. have caused turmoil in the stock market this month. This has a left a lot of stocks looking cheap.
American Airlines YTD Stock Performance, data by YCharts
Yet the stock looks very attractive for several reasons. First, it has a bargain-basement valuation. It currently trades for a little more than four times American's projected 2015 earnings. This figure is a bit deceptive, because American Airlines isn't accruing taxes this year due to previous losses. However, even including a normal tax rate, the stock would trade for about seven times earnings.
Second, American Airlines does not hedge its fuel costs, so it will quickly reap the full benefit of the recent drop in oil prices. That will help offset any further unit revenue weakness it may face.
Finally, American Airlines isn't exposed much to China -- or Asia more broadly. The carrier has just five daily flights to mainland China, plus one to Hong Kong. Two-thirds of its capacity is deployed in the U.S., while its international routes are focused on Europe and Latin America. Those regions have their own problems, but they aren't any worse today than they were a month ago.
An underappreciated trendsetter
While American Airlines isn't as exposed to Asia as its legacy carrier rivals, Virgin America doesn't fly there at all. In fact, its only international routes are a few flights to popular Mexican resort areas.
Nevertheless, Virgin America shares have been caught up in the global stock sell-off. The stock had rallied briefly after Virgin America produced a great Q2 earnings report and solid guidance for the rest of the year and 2016. However, the stock has now given back most of those gains, and is down nearly 30% year to date.
Virgin America YTD Stock Performance, data by YCharts .
Yet Virgin America has been one of the top performers in the industry in terms of unit revenue this year. While it has projected a unit revenue decline for Q3, it has several positive catalysts that should improve its unit revenue trajectory thereafter. Meanwhile, it expects non-fuel unit costs to decline slightly in 2016, while its average fuel cost per gallon is on track to decrease significantly next year.
Despite these tailwinds that could drive profit growth next year and beyond, Virgin America stock now trades for less than seven times its projected 2015 EPS. At that price, it looks like a great bargain.
A fast-rising coastal powerhouse
Finally, JetBlue Airways has been the best-performing U.S. airline stock this year, but even it has not been immune to the stock market's recent plunge. In fact, the stock has declined by more than 10% from the multiyear high it hit just last week.
JetBlue YTD Stock Performance, data by YCharts .
JetBlue stock trades for nearly 12 times projected 2015 earnings, so it's not as cheap as the other airline stocks highlighted here. However, it looks just as undervalued due to JetBlue's stellar 2015 performance and strong long-term growth prospects.
Like Virgin America, JetBlue has no exposure to China or most of the other weak economies of the world. Its biggest domestic markets -- New York, Boston, and Florida -- have also been relatively insulated from the fare wars that have broken out in parts of the U.S. airline industry. As a result, it is the only U.S. carrier poised to post unit revenue growth for the full year.
The expansion of its Mint premium service is just one key profit-growth driver for JetBlue. Photo: JetBlue Airways.
JetBlue has a fairly modest hedge book, so it will see plenty of savings if oil prices remain low. Additionally, the company recently implemented a new fare structure that is expected to produce $200 million in annual benefits by 2016 or 2017.
Other profit-growth drivers are also in the works. JetBlue will expand its popular Mint premium service during the next year, it will benefit from a new credit card partnership starting in 2016, and it will add 15 seats to each of its A320 aircraft during the next few years to reduce unit costs. These initiatives will add hundreds of millions of dollars to JetBlue's bottom line.
Despite all of these profit-growth drivers, JetBlue stock is trading at a steep discount to the broader market. That practically makes it a steal at its recent trading price below $22.
There's no such thing as a sure thing in the stock market. But shares of American Airlines, Virgin America, and JetBlue have all fallen to a point where the upside seems to far outweigh the risk. The benefit of lower fuel costs should offset any incremental demand weakness for all three airlines, driving profit growth -- and in all likelihood, rebounding share prices.
Find this article informative?
The Motley Fool's mission is to help the world invest, better. We have done this over the past 20 years by thinking long term and outside the box -- even if that means turning Wall Street on its head. To learn more about what The Motley Fool thinks about current investment trends, and receive a special free report about what might be the next big industry to come out of Silicon Valley, just click here now .
The article 3 Airline Stocks Looking Great After the Global Selloff originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of Virgin America and is long January 2017 $17 calls on JetBlue Airways and long November 2015 $40 calls on American Airlines Group. The Motley Fool has no position in any of the stocks mentioned. 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.
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Fears about a looming economic slowdown in China and the potential impact of higher interest rates in the U.S. have caused turmoil in the stock market this month. The benefit of lower fuel costs should offset any incremental demand weakness for all three airlines, driving profit growth -- and in all likelihood, rebounding share prices. To learn more about what The Motley Fool thinks about current investment trends, and receive a special free report about what might be the next big industry to come out of Silicon Valley, just click here now .
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American Airlines YTD Stock Performance, data by YCharts Yet the stock looks very attractive for several reasons. Virgin America YTD Stock Performance, data by YCharts . Adam Levine-Weinberg owns shares of Virgin America and is long January 2017 $17 calls on JetBlue Airways and long November 2015 $40 calls on American Airlines Group.
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American Airlines YTD Stock Performance, data by YCharts Yet the stock looks very attractive for several reasons. A fast-rising coastal powerhouse Finally, JetBlue Airways has been the best-performing U.S. airline stock this year, but even it has not been immune to the stock market's recent plunge. JetBlue stock trades for nearly 12 times projected 2015 earnings, so it's not as cheap as the other airline stocks highlighted here.
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Second, American Airlines does not hedge its fuel costs, so it will quickly reap the full benefit of the recent drop in oil prices. Yet Virgin America has been one of the top performers in the industry in terms of unit revenue this year. JetBlue stock trades for nearly 12 times projected 2015 earnings, so it's not as cheap as the other airline stocks highlighted here.
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8278.0
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2015-08-24 00:00:00 UTC
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American Airlines Group to Stop Philadelphia-Tel Aviv Service
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AAL
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https://www.nasdaq.com/articles/american-airlines-group-to-stop-philadelphia-tel-aviv-service-2015-08-24
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nan
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nan
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According to various media reports, Fort Worth, Texas-based American Airlines GroupAAL , which was formed following the Dec 2013 merger between AMR (American Airlines' parent group, founded in 1934) and US Airways, will no longer fly to Israel from early January next year. Apparently, lack of profitability led to the decision of terminating the carrier's sole direct flight to Israel, which connected Philadelphia and Tel Aviv.
The route has been operative for six years now but has unfortunately not been able to deliver profits. . In fact, according to the Street, the carrier has lost in excess of $20 million in 2015 due to its operations on the route. According to the Association of Professional Flight Attendants (APFA), the union representing flight attendants of American Airlines and US Airways, the route will be discontinued effective Jan 4, 2016. US Airways was responsible for operating flights on the route.
Flights on the route were apparently packed (operated with high load factor). However, the metric is not the sole criterion for judging the financial performance of a route, according to the APFA release. The carrier has also reportedly stated that post-termination, passengers already booked on the flights will either be offered full refund or provided with alternative arrangements.
However, according to an article appearing in the Times of Israel, the possibility of a political motive behind American Airlines' decision cannot be ruled out. The article conjectured whether the move to close down the route was necessitated by American Airlines' inclination to strengthen its ties with Arab carriers such as Royal Jordanian and Qatar Airways. American Airlines apparently shares flights and other services with its Arab counterparts, being a part of the OneWorld alliance of airlines.
Although American Airlines has decided to omit Israel from its operational itinerary from early next year, we note that many other carriers, including Delta Air Lines DAL , have operations in Israel.
Zacks Rank
American Airlines carries a Zacks Rank #3 (Hold). Better-ranked stocks in the airline space include Ryanair Holdings RYAAY and SkyWest Inc. SKYW . Both the stocks carry a Zacks Rank #1 (Strong Buy).
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RYANAIR HLDGS (RYAAY): Free Stock Analysis Report
DELTA AIR LINES (DAL): 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.
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According to various media reports, Fort Worth, Texas-based American Airlines GroupAAL , which was formed following the Dec 2013 merger between AMR (American Airlines' parent group, founded in 1934) and US Airways, will no longer fly to Israel from early January next year. Click to get this free report RYANAIR HLDGS (RYAAY): Free Stock Analysis Report DELTA AIR LINES (DAL): 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. Apparently, lack of profitability led to the decision of terminating the carrier's sole direct flight to Israel, which connected Philadelphia and Tel Aviv.
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Click to get this free report RYANAIR HLDGS (RYAAY): Free Stock Analysis Report DELTA AIR LINES (DAL): 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. According to various media reports, Fort Worth, Texas-based American Airlines GroupAAL , which was formed following the Dec 2013 merger between AMR (American Airlines' parent group, founded in 1934) and US Airways, will no longer fly to Israel from early January next year. Although American Airlines has decided to omit Israel from its operational itinerary from early next year, we note that many other carriers, including Delta Air Lines DAL , have operations in Israel.
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According to various media reports, Fort Worth, Texas-based American Airlines GroupAAL , which was formed following the Dec 2013 merger between AMR (American Airlines' parent group, founded in 1934) and US Airways, will no longer fly to Israel from early January next year. Click to get this free report RYANAIR HLDGS (RYAAY): Free Stock Analysis Report DELTA AIR LINES (DAL): 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. Although American Airlines has decided to omit Israel from its operational itinerary from early next year, we note that many other carriers, including Delta Air Lines DAL , have operations in Israel.
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Click to get this free report RYANAIR HLDGS (RYAAY): Free Stock Analysis Report DELTA AIR LINES (DAL): 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. According to various media reports, Fort Worth, Texas-based American Airlines GroupAAL , which was formed following the Dec 2013 merger between AMR (American Airlines' parent group, founded in 1934) and US Airways, will no longer fly to Israel from early January next year. US Airways was responsible for operating flights on the route.
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8279.0
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2015-08-20 00:00:00 UTC
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The Zacks Analyst Blog Highlights: Delta Air Lines, United Continental Holdings, American Airlines Group, JetBlue Airways and Southwest Airlines
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AAL
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https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-delta-air-lines-united-continental-holdings-american-0
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nan
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For Immediate Release
Chicago, IL - August 20, 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 Delta Air Lines ( DAL ), United Continental Holdings ( UAL ), American Airlines Group ( AAL ), JetBlue Airways ( JBLU ) and Southwest Airlines Co. ( LUV ).
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: Busy Labor Day in the Cards?
The past week saw premier trade organization Airlines for America revealing a bright forecast for U.S. carriers. It is expected that U.S. airlines will make hay in the upcoming Labor Day holiday period (Sep 2 - Sep 8) owing to increased travel demand.
Furthermore, the dispute between U.S. carriers and their Gulf counterparts saw a fresh twist with Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and American Airlines Group ( AAL ) calling for a State Department investigation into the impact of foreign government subsidies on the airline market.
Meanwhile, load factor declined at low cost airlines JetBlue Airways ( JBLU ) for the month of July as capacity growth outpaced the rise in air traffic. Southwest Airlines Co. ( LUV ) also grabbed headlines during the week, albeit for the wrong reasons, when the Federal Aviation Administration proposed a hefty fine ($325,000) on the carrier citing maintenance issues.
On the price front, the NYSE ARCA Airline index declined 1.6% over the past week.
(Read the last Airline Stock Roundup for Aug 12, 2015 )
Recap of the Past Week's Most Important Stories
1. According to a forecast made by Airlines for America approximately 14.2 million passengers are expected to be transported through U.S. airlines during the Labor Day holiday period this year, compared with 13.8 million people who chose to travel by air in the same period last year. The forecast translates into 2 million fliers per day during the period (read more: U.S. Carriers to Fly High Over Labor Day? ).
2. Traffic at JetBlue Airways climbed 8.9% in Jul 2015 from the comparable month a year ago. On a year-over-year basis, consolidated capacity increased 10.4%. Meanwhile, load factor declined 130 basis points to 87% (read more: JetBlue's July Traffic Rises ).
3. The Federal Aviation Administration may levy a $325,000 fine on low-cost U.S. carrier Southwest Airlines for operating a Boeing 737 plane which was not serviced even after it had crossed the 24,000-flight limit set by the regulators (read more: Southwest Airlines Flouts Maintenance Norms: Fine in Cards? ).
4. Delta has requested a halt on flights out of the U.S. by Middle East carriers while the State Department investigates. The carrier fears that it will have to cut out routes from smaller markets in order to make up for lost revenue from otherwise lucrative international travel. United Continental and American Airlines are also in favor of cracking the whip on their Middle East counterparts (read more: U.S. Airlines Square Off Against Middle East Carriers ).
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About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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.
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DELTA AIR LINES (DAL): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
AMER AIRLINES (AAL): 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.
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Stocks recently featured in the blog include the Delta Air Lines ( DAL ), United Continental Holdings ( UAL ), American Airlines Group ( AAL ), JetBlue Airways ( JBLU ) and Southwest Airlines Co. ( LUV ). Furthermore, the dispute between U.S. carriers and their Gulf counterparts saw a fresh twist with Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and American Airlines Group ( AAL ) calling for a State Department investigation into the impact of foreign government subsidies on the airline market. 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 JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report To read this article on Zacks.com click here.
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Stocks recently featured in the blog include the Delta Air Lines ( DAL ), United Continental Holdings ( UAL ), American Airlines Group ( AAL ), JetBlue Airways ( JBLU ) and Southwest Airlines Co. ( LUV ). Furthermore, the dispute between U.S. carriers and their Gulf counterparts saw a fresh twist with Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and American Airlines Group ( AAL ) calling for a State Department investigation into the impact of foreign government subsidies on the airline market. 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 JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report To read this article on Zacks.com click here.
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Stocks recently featured in the blog include the Delta Air Lines ( DAL ), United Continental Holdings ( UAL ), American Airlines Group ( AAL ), JetBlue Airways ( JBLU ) and Southwest Airlines Co. ( LUV ). 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 JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report To read this article on Zacks.com click here. Furthermore, the dispute between U.S. carriers and their Gulf counterparts saw a fresh twist with Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and American Airlines Group ( AAL ) calling for a State Department investigation into the impact of foreign government subsidies on the airline market.
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Stocks recently featured in the blog include the Delta Air Lines ( DAL ), United Continental Holdings ( UAL ), American Airlines Group ( AAL ), JetBlue Airways ( JBLU ) and Southwest Airlines Co. ( LUV ). Furthermore, the dispute between U.S. carriers and their Gulf counterparts saw a fresh twist with Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and American Airlines Group ( AAL ) calling for a State Department investigation into the impact of foreign government subsidies on the airline market. 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 JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report To read this article on Zacks.com click here.
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8280.0
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2015-08-20 00:00:00 UTC
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NTSB Probing American Airlines Plane's Landing in Charlotte
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AAL
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https://www.nasdaq.com/articles/ntsb-probing-american-airlines-planes-landing-in-charlotte-2015-08-20
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nan
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Going by the recent happenings in the airline space, troubled times are persistently characteristic of Fort Worth, TX-based American Airlines GroupAAL . The company, which was formed following the Dec 2013 merger between AMR (American Airlines' parent group, founded in 1934) and US Airways, has been consistently plagued by investigations.
The most recent one to add to the carrier's woes is the National Transportation Safety Board's (NTSB) intervention regarding damages caused on account of an aircraft, flying from Atlanta, making an aborted landing at the Charlotte, NC airport a few days back.
Investigations Not New to American Airlines
American Airlines, along with Delta Air Lines DAL , United Continental UAL and Southwest Airlines LUV , is already part of a probe by the Department of Justice on the possibility of unlawful coordination and consequent expansion at a slower pace to limit the availability of seats, with the objective of keeping airfares high.
Additionally, American Airlines, along with the three above mentioned carriers and JetBlue Airways Corporation JBLU , is witness to an investigation by the Department of Transportation, for unfair hike of ticket prices after an Amtrak train derailed in May this year.
The Charlotte Incident
According to media reports, the NTSB is probing the accident at the Charlotte airport last weekend. The plane (Flight 1851), an Airbus 321 operated by US Airways, allegedly tried to land amid stormy conditions prevailing at that time. Apparently, the plane collided with runway lights and damaged the underside of its tail. Following the difficulties, the landing attempt was aborted and after circling for some time, the plane landed safely the second time around.
The only silver lining was that the incident did not injure any of the passengers/crew members on board. However, the plane was "substantially" damaged and has been pulled out of service, according to media reports. The runway was subsequently closed but fortunately, the incident did not affect other flights.
As part of the investigation, the NTSB is analyzing the content of the flight data recorder and cockpit voice recorder. The agency is also looking into the prevalent weather conditions at the time of landing and the performance of the Airbus, apart from other operational factors.
Pilots apparently blamed a wind shear for the accident. We note that wind shear accidents, caused by sudden shifts in wind speed or direction, are very rare in the U.S. these days following improved training of pilots and the use of advanced weather radars and wind sensors. Naturally, the occurrence of such an accident has invited significant attention from multiple safety experts. Apart from NTSB, the Federal Aviation Administration (FAA) is also probing the accident. In fact, American Airlines had reported the incident to both the agencies following its occurrence.
According to a Bloomberg report, the incident curiously took place on the same day when an air-traffic computer system in a FAA facility malfunctioned resulting in multiple flights being delayed and even cancelled. The FAA computer failure adversely impacted operations from New York to Florida. According to a Bloomberg report, harassments to fliers due to the delays persisted even after the issue was resolved.
Media reports further stated that Charlotte was incidentally the place where the last major airline accident in the U.S. had taken place. The accident, which occurred more than twenty years ago, claimed over thirty lives unlike the present mishap, which thankfully has not resulted in any casualty.
Wind Shear Scare Strikes Again?
According to a report appearing in the Wall Street Journal, an American Airlines jet had a narrow escape in June this year, when it was caught amid stormy weather, similar to that at the Charlotte airport. Apparently, the jet was approaching the Dallas-Fort Worth International Airport when it had a narrow escape from a wind shear accident. This incident too reported no casualties.
However, with pilots being better-trained nowadays to cope with adverse weather conditions and the use of superior technological equipments, such repeated travel scares are certainly not called for. Consequently, it would be interesting to see if the investigations into the Charlotte incident reveal any lapses on the part of American Airlines or, for that matter, entail introduction of new safety mechanisms to avoid such mishaps in the future. We expect investors to stay tuned for updates on this issue.
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SOUTHWEST AIR (LUV): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Going by the recent happenings in the airline space, troubled times are persistently characteristic of Fort Worth, TX-based American Airlines GroupAAL . Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The most recent one to add to the carrier's woes is the National Transportation Safety Board's (NTSB) intervention regarding damages caused on account of an aircraft, flying from Atlanta, making an aborted landing at the Charlotte, NC airport a few days back.
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Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Going by the recent happenings in the airline space, troubled times are persistently characteristic of Fort Worth, TX-based American Airlines GroupAAL . Investigations Not New to American Airlines American Airlines, along with Delta Air Lines DAL , United Continental UAL and Southwest Airlines LUV , is already part of a probe by the Department of Justice on the possibility of unlawful coordination and consequent expansion at a slower pace to limit the availability of seats, with the objective of keeping airfares high.
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Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Going by the recent happenings in the airline space, troubled times are persistently characteristic of Fort Worth, TX-based American Airlines GroupAAL . Investigations Not New to American Airlines American Airlines, along with Delta Air Lines DAL , United Continental UAL and Southwest Airlines LUV , is already part of a probe by the Department of Justice on the possibility of unlawful coordination and consequent expansion at a slower pace to limit the availability of seats, with the objective of keeping airfares high.
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Going by the recent happenings in the airline space, troubled times are persistently characteristic of Fort Worth, TX-based American Airlines GroupAAL . Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. The Charlotte Incident According to media reports, the NTSB is probing the accident at the Charlotte airport last weekend.
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8281.0
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2015-08-17 00:00:00 UTC
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U.S. Airlines Square Off Against Middle East Carriers
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AAL
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https://www.nasdaq.com/articles/us-airlines-square-against-middle-east-carriers-2015-08-17
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nan
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nan
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The battle for airline supremacy has reached new heights, as major US airlines seem determined to bring down the growing Middle East carriers by any means necessary.
The "Big 3" of United ( UAL ), Delta ( DAL ), and American ( AAL ) have banded together to urge a State Department investigation into the impact of foreign government subsidies on the airline market. The US companies are specifically targeting the major Middle Eastern carriers-Etihad, Emirates, and Qatar airlines-which are state-owned and receive subsidies totaling nearly $42 billion.
Big 3 Fight Back
Basically, the argument from the Big 3 is that the government subsidies unfairly allow the foreign carriers to undercut the pricing of US flights. At the center of this argument is the Open Skies agreement, a free-trade-like pact that allows international airlines to fly in and out of any country.
The Big 3, along with a growing bipartisan coalition of US lawmakers, argue that Open Skies agreements are inherently efforts to create a level playing field for all airlines. To some, these government subsidies undermine the true goals of the agreements.
Delta Airlines has gone as far as to request a halt on flights out of the US by Middle East carriers while the State Department investigates. One fear from the company is that it will have to cut out routes from smaller markets in order to make up for lost revenue from otherwise lucrative international travel.
In an interview with the Minnesota Star Tribune , Delta spokeswoman Kate Modolo said, "Our projection shows that if we are made to cancel a route due to the subsidized competition, it's upward of 1,000 aviation jobs [that will be lost]".
While Minneapolis-St.Paul residents fear that their airport will feel the burden of the government subsidies eventually, Delta does have plans to reduce an international route soon. Starting on October 1, Delta will cut flights from Atlanta to Dubai from five days a week to four.
By reducing route capacity, Delta is also reducing the amount of competition in the market. Open Skies agreements were meant to protect consumers by offering a wide range of options, and Delta's move is the first example of the adverse effects the major airliners are shouting about.
Free Trade or Bust?
While the Big 3 are staunch in their support of a State Department probe, not everyone thinks the government subsidies are unfair. In fact, many smaller US airlines and air cargo companies have come to the defense of the Middle East carriers, arguing that the Big 3 are simply lobbying to protect themselves, not promote competition.
Regional airliners JetBlue ( JBLU ) and Hawaiian Airlines ( HA ) have teamed up with major aircraft freighters FedEx ( FDX ) and Atlas Cargo ( AAWW ) to form the US Airlines for Open Skies Coalition. This coalition is a direct response to the Big 3 and shows that both the business and airline communities disagree with any changes to the Open Skies policy.
"The Big 3 say that they support Open Skies, but the actions they recommend would undermine it. Those actions would breach our Open Skies agreements, provoke retaliation against U.S. carriers, and raise serious doubts about whether the United States is a reliable Open Skies partner," said FedEx CEO David Bronczek.
The Big 3 are also facing challenges from free trade groups like the Cato Institute. Dan Ikenson, a trade policy director at Cato, said, "What we need is choice and competition. … The Big 3's objectives run counter to US economic interests."
Important Battleground
The Middle East market is incredibly important for airlines because it is currently the fastest growing air travel market in the world. In June, Middle Eastern airlines posted a 10.5% growth in passenger traffic, a rate higher than in any other region in the world.
(Source: khaleejtimes.com )
As you can see, every region besides Africa saw growth in both May and June. However, the Middle East has seen significantly higher growth in both months. This growing market is exactly why the Big 3 are so adamant to cut their own slice of the pie.
Bottom Line
This could be a genuine act by the Big 3 to promote competition, but it probably is a greedy attempt to gain a market advantage in an important region. Either way, the battle shouldn't have too much of an effect on the market at this very moment, but it could in the future.
If the Big 3 win and are able to limit the foreign airlines, they will be able to raise capacity to the Middle East and win back customers who left for the lower prices. If they lose and the Open Skies agreements are upheld in their current form, investors should keep an eye out for the Big 3 airlines cutting routes and jobs, which is sure to have an effect on the airline market as a whole.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
DELTA AIR LINES (DAL): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
FEDEX CORP (FDX): Free Stock Analysis Report
HAWAIIAN HLDGS (HA): Free Stock Analysis Report
ATLAS AIR WORLD (AAWW): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The "Big 3" of United ( UAL ), Delta ( DAL ), and American ( AAL ) have banded together to urge a State Department investigation into the impact of foreign government subsidies on the airline market. 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 JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report FEDEX CORP (FDX): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report ATLAS AIR WORLD (AAWW): Free Stock Analysis Report To read this article on Zacks.com click here. In an interview with the Minnesota Star Tribune , Delta spokeswoman Kate Modolo said, "Our projection shows that if we are made to cancel a route due to the subsidized competition, it's upward of 1,000 aviation jobs [that will be lost]".
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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 JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report FEDEX CORP (FDX): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report ATLAS AIR WORLD (AAWW): Free Stock Analysis Report To read this article on Zacks.com click here. The "Big 3" of United ( UAL ), Delta ( DAL ), and American ( AAL ) have banded together to urge a State Department investigation into the impact of foreign government subsidies on the airline market. Regional airliners JetBlue ( JBLU ) and Hawaiian Airlines ( HA ) have teamed up with major aircraft freighters FedEx ( FDX ) and Atlas Cargo ( AAWW ) to form the US Airlines for Open Skies Coalition.
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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 JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report FEDEX CORP (FDX): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report ATLAS AIR WORLD (AAWW): Free Stock Analysis Report To read this article on Zacks.com click here. The "Big 3" of United ( UAL ), Delta ( DAL ), and American ( AAL ) have banded together to urge a State Department investigation into the impact of foreign government subsidies on the airline market. Regional airliners JetBlue ( JBLU ) and Hawaiian Airlines ( HA ) have teamed up with major aircraft freighters FedEx ( FDX ) and Atlas Cargo ( AAWW ) to form the US Airlines for Open Skies Coalition.
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The "Big 3" of United ( UAL ), Delta ( DAL ), and American ( AAL ) have banded together to urge a State Department investigation into the impact of foreign government subsidies on the airline market. 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 JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report FEDEX CORP (FDX): Free Stock Analysis Report HAWAIIAN HLDGS (HA): Free Stock Analysis Report ATLAS AIR WORLD (AAWW): Free Stock Analysis Report To read this article on Zacks.com click here. Delta Airlines has gone as far as to request a halt on flights out of the US by Middle East carriers while the State Department investigates.
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8282.0
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2015-08-17 00:00:00 UTC
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What Are Delta, American, and United Doing With All of Their Cash?
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AAL
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https://www.nasdaq.com/articles/what-are-delta-american-and-united-doing-all-their-cash-2015-08-17
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The sharp drop in oil prices over the past year has led to a big increase in airlines' profitability in 2015. The top three airlines in the U.S. -- American Airlines , Delta Air Lines , and United Continental -- are all on pace to earn billions of dollars in profit this year.
But while cheap oil is having a similar positive impact on profitability for all of the airlines, they each have distinct strategies for using this extra cash. Let's take a look at how each carrier plans to spend its windfall.
American Airlines: fleet renewal and buybacks
American Airlines is using most of its cash to fund a thorough fleet overhaul. These new planes were ordered years ago -- the purchases had nothing to do with cheap oil or the company's resurgent profitability -- but American Airlines' improved financial position is allowing it to fund most of the purchases with cash rather than debt.
American Airlines is buying lots of new planes. Image source: American Airlines.
For example, in 2014, American Airlines' operating cash flow totaled $3.1 billion. Meanwhile, the company spent $5.3 billion on capital expenditures: mainly for new aircraft. American Airlines had to draw down its cash and investments balance to fund the difference.
In 2015, capital expenditures are expected to rise to $6.4 billion, including $5.4 billion for new planes. However, thanks to cheap oil, American Airlines generated more than $4.8 billion of operating cash flow in the first half of the year. While airlines' cash flow tends to be frontloaded within the year, American will still bring in plenty of cash in the second half of 2015. As a result, it should be free-cash-flow-positive despite its heavy capital spending.
American's heavy investments in aircraft have already given it the youngest fleet among the major airlines. Its lead will widen over the next few years. This will boost its fuel efficiency, helping protect the company from a potential oil price rebound in the future.
American Airlines has nearly $19 billion in debt on the books. But rather than using its free cash flow to pay off that debt, it's actually borrowing a little more because interest rates are so low. Instead, it's using its leftover cash for share buybacks. American spent more than $750 million on share repurchases just last quarter, and doubled its total buyback plan to $4 billion. It also pays a small $0.10 quarterly dividend.
Delta Air Lines: balanced cash deployment
Delta Air Lines was already generating plenty of cash prior to 2015, but the dip in fuel prices is making it an even bigger cash cow. In each of the past two years, Delta produced at least $4.5 billion in operating cash flow, and it nearly reached that level in the first half of 2015 alone, despite being hit with significant fuel hedging losses.
Delta Air Lines has been the most consistent cash cow among the airlines.
Like American Airlines, Delta is buying back a lot of stock. It spent about $925 million on share repurchases last quarter, completing its old buyback program and getting started on a new $5 billion share buyback program announced in May. It also pays a modest $0.135 quarterly dividend. However, that's where the similarities end.
Delta has been much more careful about capital spending. It has laid out a long-term plan to spend $2.5 billion-$3 billion each year on aircraft replacement and other capital projects. That's less than half of what American Airlines will spend this year, even though Delta is only slightly smaller.
This means that Delta is generating lots of free cash flow. It has been contributing about $1 billion a year to its pension plans with a goal of having them 80%-90% funded by 2020: up from less than 50% funded at the end of 2014. Delta also plans to reduce its adjusted net debt to $4 billion by 2017, down from a staggering $17 billion as recently as 2009.
United Continental: focus on buybacks
United Continental has adapted its aircraft purchase strategy in recent years to be more like Delta's. For the next few years, it plans to spend $2.7 billion-$2.9 billion annually on capex, roughly in line with Delta's capital spending. As a result, even though it isn't as profitable as Delta or American, it's still producing plenty of free cash flow.
United Continental has cut back on new aircraft purchases recently.
Like Delta, United has set a debt reduction target -- but its goal is much more modest. United's adjusted gross debt is currently about $17 billion, and it plans to reduce that to $15 billion. United also wants to maintain $5 billion-$6 billion in unrestricted liquidity (including a revolving credit line), which would put its net debt at a little more than $10 billion: more than double Delta's target.
Instead, United seems content to spend most of its free cash flow on share buybacks. Given that it has the lowest market cap of the three big legacy carriers, this focus on buybacks may be wise. United plans to complete a $1 billion buyback program announced last year during Q3, and it recently announced a new $3 billion share repurchase authorization.
What it means for investors
American Airlines, Delta Air Lines, and United Continental are all benefiting from the drop in oil prices, but they've adopted different strategies for using the extra cash they're getting. This makes each one better suited to a different type of investor.
For risk-tolerant investors, United Continental probably has the most upside. It is working hard to close the margin gap with its peers. If it's successful, its valuation would likely rise to match theirs. In the meantime, it's buying back a lot of stock, giving an additional boost to EPS. But if United fails to fix its structural deficiencies, the stock could remain a laggard.
Delta Air Lines is the conservative choice. Delta is using its strong cash flow to get rid of most of its debt and pension obligations, while still returning plenty of cash to shareholders. This strategy will give it maximum flexibility to respond to changing industry conditions in the future.
Lastly, American Airlines is a bet on the long-term health of the airline industry. By the end of the decade, it will have replaced virtually all of its older-technology jets, leaving it with a fleet of young, fuel-efficient planes. If industry conditions remain good beyond 2020, American should be able to take advantage of its young fleet to post industry-leading earnings and cash flow.
Find this article informative?
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The article What Are Delta, American, and United Doing With All of Their Cash? 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 has no position in any of the stocks mentioned. 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 .
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In each of the past two years, Delta produced at least $4.5 billion in operating cash flow, and it nearly reached that level in the first half of 2015 alone, despite being hit with significant fuel hedging losses. What it means for investors American Airlines, Delta Air Lines, and United Continental are all benefiting from the drop in oil prices, but they've adopted different strategies for using the extra cash they're getting. To learn more about what The Motley Fool thinks about current investment trends, and receive a special free report about what might be the next big industry to come out of Silicon Valley, just click here now .
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Delta Air Lines: balanced cash deployment Delta Air Lines was already generating plenty of cash prior to 2015, but the dip in fuel prices is making it an even bigger cash cow. United plans to complete a $1 billion buyback program announced last year during Q3, and it recently announced a new $3 billion share repurchase authorization. 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 has no position in any of the stocks mentioned.
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The top three airlines in the U.S. -- American Airlines , Delta Air Lines , and United Continental -- are all on pace to earn billions of dollars in profit this year. Delta Air Lines: balanced cash deployment Delta Air Lines was already generating plenty of cash prior to 2015, but the dip in fuel prices is making it an even bigger cash cow. What it means for investors American Airlines, Delta Air Lines, and United Continental are all benefiting from the drop in oil prices, but they've adopted different strategies for using the extra cash they're getting.
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The top three airlines in the U.S. -- American Airlines , Delta Air Lines , and United Continental -- are all on pace to earn billions of dollars in profit this year. Instead, United seems content to spend most of its free cash flow on share buybacks. The article What Are Delta, American, and United Doing With All of Their Cash?
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2015-08-13 00:00:00 UTC
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The Zacks Analyst Blog Highlights: Southwest Airlines, American Airlines Group, United Continental Holdings, Spirit Airlines, SkyWest, Allegiant Travel and JetBlue Airways
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AAL
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https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-southwest-airlines-american-airlines-group-united
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For Immediate Release
Chicago, IL - August 13, 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 Southwest Airlines ( LUV ), American Airlines Group Inc. ( AAL ), United Continental Holdings, Inc. ( UAL ), Spirit Airlines, Inc. ( SAVE ), SkyWest Inc. ( SKYW ), Allegiant Travel Company ( ALGT ) and JetBlue Airways ( JBLU ).
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: American Airlines, Southwest July Traffic Impress; Allegiant Plans to Expand
The past week saw airline heavyweights like Southwest Airlines ( LUV ), American Airlines Group Inc. ( AAL ) and United Continental Holdings, Inc. ( UAL ) revealing impressive traffic data for July 2015. Apart from air traffic, another key metric - load factor (% of seats filled by passengers) - showed considerable improvement among the said carriers as traffic growth outpaced the rise in capacity.
On the other hand, load factor declined for low-cost airline Spirit Airlines, Inc. ( SAVE ) as traffic growth lagged capacity rise at the troubled carrier. In another major traffic-related development, block hours (a measure of aircraft utilization) declined in July at SkyWest Inc. ( SKYW ), the holding company of SkyWest Airlines and ExpressJet Airlines. The fall in the metric was in sync with its fleet optimization plans.
The expansion drive at Allegiant Travel Company ( ALGT ), the parent company of Allegiant Air, made for fresh news amid the regular traffic updates. The carrier announced its plans to launch 17 new routes in a bid to expand its operations.
On the price front, the NYSE ARCA Airline index declined 1.2% over the past week.
Recap of the Past Week's Most Important Stories
1. United Continental Holdings reported impressive traffic numbers for July 2015. Traffic - measured in revenue passenger miles (RPMs) - climbed 2.8% on a year-over-year basis to $20.46 billion. Domestic traffic climbed 4.5% while the metric increased 4.6% on the international front.
2. SkyWest revealed a 10.4% (21,136) year-over-year decline in block hours to 183,039 in Jul 2015. The St. George, UT-based carrier is looking to add new dual-class aircraft to its fleet and simultaneously bring down the number of unprofitable aircraft (read more: SkyWest Capacity Down in July, Block Hours Decline).
3. Traffic at American Airlines Group improved 4.8% to 21.77 billion in Jul 2015. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) increased 2.2% to 24.93 billion. Load factor increased to 87.3% from 85.1% in Jul 2014. American Airlines forecasts a 6% to 8% drop in PRASM (passenger revenue per available seat mile) for third-quarter 2015. Moreover, pre-tax margin (exclusive of special items) is estimated to remain in the band of 16% to 18%.
4. Traffic at Southwest Airlines climbed 8.2% in Jul 2015 from the comparable month a year ago. On a year-over-year basis, consolidated capacity increased 7%. Meanwhile, load factor climbed 100 basis points to 87.7%, making it the highest recorded ever by the carrier in the month of July. The carrier projects operating revenue per ASM to decline approximately 1% in the third quarter of 2015 compared with the year-ago period.
5. Spirit Airlines unveiled an impressive 32% rise in air traffic for the month of July. Capacity of this discount airline increased 35.8% in the month to 1.89 billion. Load factor was down 260 basis points on a year-over-year basis to 88.8% (read more: Spirit Airlines July Traffic Up 32%, Load Factor Falls).
6. In a bid to expand further, Allegiant Air has decided to operate nonstop flights in as many as 17 new routes, including two new cities, San Antonio and Kansas City, effective Nov 2015. In what can be deemed a customer-friendly move, the carrier has kept one-way fares as low as $49 for all the new routes and destinations. The expansion will allow travelers to fly to their favorite vacation spots at affordable costs. The carrier stated in its press release that fliers must purchase tickets by Aug 14, 2015 to avail of the low-priced introductory offer for travel within Feb 16, 2016.
As per plans, the carrier will start operating nonstop flights connecting Oklahoma City and Las Vegas from Nov 5, 2015. Nonstop flights (twice a week) on three routes to Tampa Bay will also see the light of day from November. These flights will connect the St. Pete-Clearwater International Airport in Florida to Appleton, WI (Nov 6); Scranton, PA (Nov 6) and Kansas City, MO (Nov 12). Furthermore, the carrier stated that it will fly nonstop, twice a week, connecting the Fort Lauderdale/Hollywood International Airport and San Antonio from Nov 5.
What's Next in the Airline Biz?
We expect investors to keenly await the July traffic results of JetBlue Airways ( JBLU ) in the coming days. Focus will also remain on the earnings reports of Latin American carriers, Copa Holdings and GOL Linhas. We expect earnings of these carriers to be negatively impacted by currency headwinds. Do stay tuned for regular news updates in the airline space alongside.
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Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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SOUTHWEST AIR (LUV): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
SPIRIT AIRLINES (SAVE): Free Stock Analysis Report
SKYWEST INC (SKYW): Free Stock Analysis Report
ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Stocks recently featured in the blog include the Southwest Airlines ( LUV ), American Airlines Group Inc. ( AAL ), United Continental Holdings, Inc. ( UAL ), Spirit Airlines, Inc. ( SAVE ), SkyWest Inc. ( SKYW ), Allegiant Travel Company ( ALGT ) and JetBlue Airways ( JBLU ). Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: American Airlines, Southwest July Traffic Impress; Allegiant Plans to Expand The past week saw airline heavyweights like Southwest Airlines ( LUV ), American Airlines Group Inc. ( AAL ) and United Continental Holdings, Inc. ( UAL ) revealing impressive traffic data for July 2015. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report To read this article on Zacks.com click here.
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Stocks recently featured in the blog include the Southwest Airlines ( LUV ), American Airlines Group Inc. ( AAL ), United Continental Holdings, Inc. ( UAL ), Spirit Airlines, Inc. ( SAVE ), SkyWest Inc. ( SKYW ), Allegiant Travel Company ( ALGT ) and JetBlue Airways ( JBLU ). Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: American Airlines, Southwest July Traffic Impress; Allegiant Plans to Expand The past week saw airline heavyweights like Southwest Airlines ( LUV ), American Airlines Group Inc. ( AAL ) and United Continental Holdings, Inc. ( UAL ) revealing impressive traffic data for July 2015. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report To read this article on Zacks.com click here.
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Stocks recently featured in the blog include the Southwest Airlines ( LUV ), American Airlines Group Inc. ( AAL ), United Continental Holdings, Inc. ( UAL ), Spirit Airlines, Inc. ( SAVE ), SkyWest Inc. ( SKYW ), Allegiant Travel Company ( ALGT ) and JetBlue Airways ( JBLU ). Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: American Airlines, Southwest July Traffic Impress; Allegiant Plans to Expand The past week saw airline heavyweights like Southwest Airlines ( LUV ), American Airlines Group Inc. ( AAL ) and United Continental Holdings, Inc. ( UAL ) revealing impressive traffic data for July 2015. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report To read this article on Zacks.com click here.
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Stocks recently featured in the blog include the Southwest Airlines ( LUV ), American Airlines Group Inc. ( AAL ), United Continental Holdings, Inc. ( UAL ), Spirit Airlines, Inc. ( SAVE ), SkyWest Inc. ( SKYW ), Allegiant Travel Company ( ALGT ) and JetBlue Airways ( JBLU ). Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: American Airlines, Southwest July Traffic Impress; Allegiant Plans to Expand The past week saw airline heavyweights like Southwest Airlines ( LUV ), American Airlines Group Inc. ( AAL ) and United Continental Holdings, Inc. ( UAL ) revealing impressive traffic data for July 2015. Click to get this free report SOUTHWEST AIR (LUV): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SPIRIT AIRLINES (SAVE): Free Stock Analysis Report SKYWEST INC (SKYW): Free Stock Analysis Report ALLEGIANT TRAVL (ALGT): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report To read this article on Zacks.com click here.
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8284.0
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2015-08-12 00:00:00 UTC
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American Airlines (AAL) July Traffic Up on Favorable Factors
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AAL
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https://www.nasdaq.com/articles/american-airlines-aal-july-traffic-up-on-favorable-factors-2015-08-12
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Premier passenger carrier American Airlines Group Inc.AAL posted impressive air traffic numbers for the month of July. Traffic - measured in revenue passenger miles (RPMs) - stood at 21.77 billion, up 4.8% from 20.77 billion recorded a year ago.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) improved 2.2% to 24.93 billion. Since air traffic growth outpaced capacity growth, the load factor or percentage of seats filled by passengers increased to 87.3% from 85.1% in Jul 2014.
For the first seven months of 2015, American Airlines generated RPMs of 129.8 billion (up 0.7% from the corresponding period last year) and ASMs of 157.12 billion (up 0.8% year over year). Meanwhile, the load factor declined 10 basis points year over year to 82.6%.
Continuous route expansion, successful merger integrations and increased travel demand were the prime factors driving traffic. Meanwhile, American Airlines and Qantas Airways also broadened their network by initiating new flights between the U.S. and Australia.
American Airlines forecasts a 6% to 8% drop in passenger revenue per available seat mile for the third quarter of 2015. We believe that the decline may be brought about by persistently low oil prices and foreign currency exchange rate risks. Moreover, pre-tax margin (exclusive of special items) is likely to remain in the band of 16% to 18%.
Stocks to Consider
American Airlines currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include Alaska Air Group, Inc. ALK , Virgin America Inc. VA and JetBlue Airways Corp. JBLU . JetBlue carries a Zacks Rank #2 (Buy) while the other two companies sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
JETBLUE AIRWAYS (JBLU): 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.
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Premier passenger carrier American Airlines Group Inc.AAL posted impressive air traffic numbers for the month of July. Click to get this free report JETBLUE AIRWAYS (JBLU): 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. Continuous route expansion, successful merger integrations and increased travel demand were the prime factors driving traffic.
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Click to get this free report JETBLUE AIRWAYS (JBLU): 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. Premier passenger carrier American Airlines Group Inc.AAL posted impressive air traffic numbers for the month of July. Since air traffic growth outpaced capacity growth, the load factor or percentage of seats filled by passengers increased to 87.3% from 85.1% in Jul 2014.
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Click to get this free report JETBLUE AIRWAYS (JBLU): 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. Premier passenger carrier American Airlines Group Inc.AAL posted impressive air traffic numbers for the month of July. For the first seven months of 2015, American Airlines generated RPMs of 129.8 billion (up 0.7% from the corresponding period last year) and ASMs of 157.12 billion (up 0.8% year over year).
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Premier passenger carrier American Airlines Group Inc.AAL posted impressive air traffic numbers for the month of July. Click to get this free report JETBLUE AIRWAYS (JBLU): 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. Since air traffic growth outpaced capacity growth, the load factor or percentage of seats filled by passengers increased to 87.3% from 85.1% in Jul 2014.
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2015-08-12 00:00:00 UTC
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Earnings Put Spotlight On Airlines, Homebuilder ETFs
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AAL
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https://www.nasdaq.com/articles/earnings-put-spotlight-airlines-homebuilder-etfs-2015-08-12
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T he ETF market is on fire, and investors are showing an undimmed appetite for risk. Neither a spectacular China sell-off nor Greek drama kept investors from piling into ETFs in July.
Equity exchange traded funds absorbed $18.69 billion in new money last month. Investors poured $4.63 billion into SPDR S&P 500 ( SPY ) alone.
By comparison, bond ETFs hauled in $7.35 billion.
As Q2 earnings season enters its final stages, the overall results have neither sizzled nor fizzled.
Eight of 10 S&P sectors are showing positive earnings growth, led by health care, telecom, consumer discretionary and financials.
Energy is again the big drag.
"What we've seen so far is consistent with expectations that investors had," says Dave Mazza, head of research for SPDR ETFs.
Health care ETFs are benefiting from the biotech M&A frenzy and robust earnings growth.
Financial stocks stand to win as Fed signals point to an interest rate hike by year-end, though China's yuan depreciation throws up a wild card. For banks, higher rates mean fatter profits.
Earnings season also put the spotlight on specific industries that are starting to pick up. ETFs targeting industry niches allow investors to make tactical bets for successful investing .
Airlines, automobiles and transportation stocks in general are gearing up for growth, experts say.
American Airline s ( AAL ),Spirit Airlines ( SAVE ) andDelta Air Lines ( DAL ) posted Q2 profits that topped analyst estimates. They're reporting capacity increases as well.
That shouldn't worry investors, market watchers say.
"Airline execs have learned from past costly mistakes on adding too much capacity," analysts at S&P Capital IQ wrote recently.
Airlines are raising fares, slashing discounts and wooing business travelers who buy costly tickets.
Capital IQ forecasts 2015 as a record-profit year for the airline industry, driven by revenue growth and lower oil prices .
U.S.Global Jets ( JETS ), a new ETF that launched in April, gives investors access to airline operators as well as manufacturers.
JETS has gathered $52.8 million in assets since debut and has a 0.6% expense ratio. Top 10 holdings including Delta, American and Spirit, as well as IBD 50 stocksHawaiian Holdings (HA) andAlaska Air (ALK).
The airlines transportation group ranks 10 out 197 industry groups tracked by IBD. That's up from 79 four weeks ago.
Homebuilder stocks are also perking up.Lennar (LENB) and new issueLGI Homes (LGIH) each have an IBD Composite Rating of 98.
Peers such asNVR (NVR),Ryland Group (RYL) andD.R. Horton (DHI) are posting earnings gains amid strong home sales.
Mazza also sees a turnaround in "household formation," or younger people moving out of their parents' homes and couples buying homes together.
"That is a catalyst for further demand for homes and it's something we haven't seen for many years post-housing crisis," he said. "It's very important to look at demographics in addition to company fundamentals or earnings."
SPDR S&P Homebuilders (XHB) and iShares U.S.Home Construction (ITB) are up 10% and 9%, respectively, year to date, outpacing the broad market.
Their holdings stand to benefit from still-low mortgage rates and improving job numbers.
The residential and commercial building group is also gaining momentum. It ranks 50 today vs. 87 four weeks ago, 96 eight weeks ago and 134 13 weeks ago.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airline s ( AAL ),Spirit Airlines ( SAVE ) andDelta Air Lines ( DAL ) posted Q2 profits that topped analyst estimates. Financial stocks stand to win as Fed signals point to an interest rate hike by year-end, though China's yuan depreciation throws up a wild card. "Airline execs have learned from past costly mistakes on adding too much capacity," analysts at S&P Capital IQ wrote recently.
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American Airline s ( AAL ),Spirit Airlines ( SAVE ) andDelta Air Lines ( DAL ) posted Q2 profits that topped analyst estimates. The airlines transportation group ranks 10 out 197 industry groups tracked by IBD. It ranks 50 today vs. 87 four weeks ago, 96 eight weeks ago and 134 13 weeks ago.
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American Airline s ( AAL ),Spirit Airlines ( SAVE ) andDelta Air Lines ( DAL ) posted Q2 profits that topped analyst estimates. U.S.Global Jets ( JETS ), a new ETF that launched in April, gives investors access to airline operators as well as manufacturers. The airlines transportation group ranks 10 out 197 industry groups tracked by IBD.
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American Airline s ( AAL ),Spirit Airlines ( SAVE ) andDelta Air Lines ( DAL ) posted Q2 profits that topped analyst estimates. Investors poured $4.63 billion into SPDR S&P 500 ( SPY ) alone. "Airline execs have learned from past costly mistakes on adding too much capacity," analysts at S&P Capital IQ wrote recently.
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2015-08-11 00:00:00 UTC
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Why JetBlue and Hawaiian Airlines Are Facing Off Against 3 Airline Giants
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AAL
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https://www.nasdaq.com/articles/why-jetblue-and-hawaiian-airlines-are-facing-against-3-airline-giants-2015-08-11
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Today, the U.S. airline industry is dominated by three giant global airlines: American Airlines , Delta Air Lines , and United Continental . All three have banded together to fight a common threat: rapidly expanding Middle Eastern airlines that appear to be the beneficiaries of state support .
American, Delta, and United want the U.S. to renegotiate its Open Skies treaties with the United Arab Emirates and Qatar to stem the Gulf carriers' rapid capacity increases in the U.S. But they are now meeting fierce resistance from some other companies, including two smaller rivals in the airline industry: JetBlue Airways and Hawaiian Airlines .
What's at stake
Emirates, Qatar Airways, and Etihad Airways have built business models based on driving huge passenger volumes through their hubs in the Middle East. These hubs are favorably located for connecting passengers between Asia and Australia on the one hand and Europe, Africa, and the Western Hemisphere on the other.
Gulf carriers like Emirates have expanded rapidly in recent years. Image source: Emirates.
While all three have been growing quickly for a long time, it's only in the past few years that they have started to emphasize the U.S. as a growth market. As they have added flights to the U.S., they have made it virtually impossible for U.S. airlines to fly profitably to the UAE or Qatar.
American, Delta, and United allege that the Gulf carriers have received $42 billion in subsidies from their home governments since 2004. The three legacy carriers have created a trade group called the Partnership for Open and Fair Skies, which is lobbying the U.S. government to renegotiate its Open Skies treaties with Qatar and the United Arab Emirates to prevent this state-sponsored "dumping."
Not surprisingly, Emirates and the other Gulf carriers have strongly objected to these allegations. They deny that they are subsidized by their governments, and claim that their flights to the U.S. offer big consumer benefits.
Picking the other side
JetBlue and Hawaiian Airlines have joined with two major cargo airlines to oppose the legacy carriers' efforts. As the U.S. Airlines for Open Skies Coalition, they argue that any move to slow the growth of the Gulf carriers would undermine the entire Open Skies framework that removes government regulation of which airlines fly which routes.
It's not very surprising to see JetBlue and Hawaiian Airlines take the side of the Gulf carriers in this trade dispute. They have very different interests from American, Delta, and United, as neither flies to the Middle East or India -- the two regions for which the Gulf carriers are starting to dominate traffic to and from the U.S.
JetBlue actually has interline partnerships with all three big Gulf carriers. Since JetBlue has a major domestic presence at New York's JFK Airport -- the top international gateway in the U.S. -- many international airlines want to partner with it to provide connecting traffic.
JetBlue has teamed up with all three Gulf carriers to provide connecting traffic. Image source: JetBlue.
The JetBlue-Emirates relationship has become particularly close recently. JetBlue began flying between Boston and Detroit last March on the same day that Emirates started flying to Boston. Emirates is already planning to add a second daily flight to Boston later this year, which will expand connecting opportunities with JetBlue at the latter's second-largest base.
Hawaiian Airlines doesn't depend on the Gulf carriers for much, if any, connecting traffic. But it still has a big stake in the outcome of this dispute as a carrier with a significant international footprint and long-term international growth plans.
In the past few years, Hawaiian Airlines has taken advantage of U.S. Open Skies treaties with South Korea and New Zealand to open new routes from Honolulu to Seoul and Auckland. It has also been pushing for more liberalization of the airline market, believing that it can out-compete rivals when placed on a fair footing.
Hawaiian Airlines has supported liberalization of global air travel. Image source: Wikimedia Commons .
The U.S. Department of Transportation has shown a bias lately toward awarding scarce international route rights to American, Delta, and United to serve business travelers. Thus, it's in Hawaiian's interest to support the expansion of Open Skies -- and oppose anything that could slow that process -- in order to take the DOT out of the decision-making process. Otherwise, it could find itself continually shut out of the best markets.
Different interests, different positions
I don't think JetBlue and Hawaiian Airlines are looking to spite American Airlines, Delta Air Lines, and United Continental by opposing their proposal to renegotiate the Open Skies treaties with the UAE and Qatar. They just have different interests at stake because they have different business models.
For American, Delta, and United, the growth of the Gulf carriers is depriving them of potentially lucrative growth opportunities. Most notably, they have been unable to compete effectively on flights to India as Emirates, Etihad, and Qatar Airways have undercut them on price for coach tickets while offering better first class service.
On the other hand, primarily domestic carriers like JetBlue can benefit from foreign carriers adding new U.S. routes by providing domestic connecting traffic. As for Hawaiian Airlines, its long-term growth depends on the liberalization of international air travel, so it has a strong strategic interest in avoiding a return to protectionism.
It's not clear how the U.S. government will respond to this controversy. However, whatever it does could have a big impact on the U.S. airline industry -- from the largest carriers to the very smallest.
Find this article informative?
The Motley Fool's mission is to help the world invest, better. We have done this over the past 20 years by thinking long term and outside the box -- even if that means turning Wall Street on its head. To learn more about what The Motley Fool thinks about current investment trends, and receive a special free report about what might be the next big industry to come out of Silicon Valley, just click here now .
The article Why JetBlue and Hawaiian Airlines Are Facing Off Against 3 Airline Giants originally appeared on Fool.com.
Adam Levine-Weinberg owns shares of Hawaiian Holdings and United Continental Holdings, and is long January 2017 $17 calls on JetBlue Airways, long November 2015 $40 calls on American Airlines Group, and long January 2017 $40 calls on Delta Air Lines, The Motley Fool has no position in any of the stocks mentioned. 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.
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Most notably, they have been unable to compete effectively on flights to India as Emirates, Etihad, and Qatar Airways have undercut them on price for coach tickets while offering better first class service. As for Hawaiian Airlines, its long-term growth depends on the liberalization of international air travel, so it has a strong strategic interest in avoiding a return to protectionism. To learn more about what The Motley Fool thinks about current investment trends, and receive a special free report about what might be the next big industry to come out of Silicon Valley, just click here now .
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Today, the U.S. airline industry is dominated by three giant global airlines: American Airlines , Delta Air Lines , and United Continental . Different interests, different positions I don't think JetBlue and Hawaiian Airlines are looking to spite American Airlines, Delta Air Lines, and United Continental by opposing their proposal to renegotiate the Open Skies treaties with the UAE and Qatar. Adam Levine-Weinberg owns shares of Hawaiian Holdings and United Continental Holdings, and is long January 2017 $17 calls on JetBlue Airways, long November 2015 $40 calls on American Airlines Group, and long January 2017 $40 calls on Delta Air Lines, The Motley Fool has no position in any of the stocks mentioned.
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As the U.S. Airlines for Open Skies Coalition, they argue that any move to slow the growth of the Gulf carriers would undermine the entire Open Skies framework that removes government regulation of which airlines fly which routes. Different interests, different positions I don't think JetBlue and Hawaiian Airlines are looking to spite American Airlines, Delta Air Lines, and United Continental by opposing their proposal to renegotiate the Open Skies treaties with the UAE and Qatar. Adam Levine-Weinberg owns shares of Hawaiian Holdings and United Continental Holdings, and is long January 2017 $17 calls on JetBlue Airways, long November 2015 $40 calls on American Airlines Group, and long January 2017 $40 calls on Delta Air Lines, The Motley Fool has no position in any of the stocks mentioned.
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Gulf carriers like Emirates have expanded rapidly in recent years. They have very different interests from American, Delta, and United, as neither flies to the Middle East or India -- the two regions for which the Gulf carriers are starting to dominate traffic to and from the U.S. JetBlue actually has interline partnerships with all three big Gulf carriers. Different interests, different positions I don't think JetBlue and Hawaiian Airlines are looking to spite American Airlines, Delta Air Lines, and United Continental by opposing their proposal to renegotiate the Open Skies treaties with the UAE and Qatar.
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8287.0
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2015-08-06 00:00:00 UTC
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Why American Airlines and Alaska Air Are Teaming Up
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AAL
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https://www.nasdaq.com/articles/why-american-airlines-and-alaska-air-are-teaming-2015-08-06
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nan
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nan
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American Airlines and Alaska Air have been partners since 1999. However, the two carriers have enhanced their ties in recent years. On Wednesday, they announced the latest developments in their relationship.
Alaska Airlines customers can now book connecting itineraries on former US Airways routes for travel after October 17, when American and US Airways will move to a single reservation system. They can also redeem rewards from Alaska's Mileage Plan frequent flier program on those routes. And starting on August 15, members of Alaska's Board Room lounges will have access to all 54 of American's Admirals Club lounges.
Alaska Airlines customers are about to get better access to American Airlines' network.
Why are these two carriers -- the biggest airline in the world and a midsize carrier with a concentrated footprint in the Pacific Northwest -- so eager to deepen their ties with one another? The answer is that each one fills crucial gaps in the other's route network.
A dogfight in Seattle
Alaska Airlines' route network is centered on its home base of Seattle, which accounts for more than half of its capacity. Recently, it has faced a major threat there from its erstwhile partner -- Delta Air Lines .
Delta decided a couple of years ago to build a full-fledged hub in Seattle, particularly to serve Asian markets. Rather than rely mainly on Alaska Airlines to bring in connecting traffic, Delta opted to build out its own domestic network there. It now operates about 128 daily departures in Seattle, up from just a few dozen in 2013.
As Delta has expanded in Seattle, it has worked to win corporate clients there -- many of whom have been loyal to Alaska Airlines previously. In that fight, Delta has one huge advantage: its global route network.
Delta Air Lines is growing rapidly in Alaska's hometown of Seattle.
While it still has less than half as many daily departures in Seattle as Alaska, Delta flies nonstop from Seattle to eight key cities in Europe and Asia. Alaska doesn't fly outside North America at all. Furthermore, Delta can offer one-stop service from Seattle to hundreds of cities across the U.S. and the rest of the world via its other hubs. Alaska's entire route network consists of just 104 destinations.
Thus, a strong partnership with a global carrier is a virtual necessity for Alaska Airlines if it wants to keep its corporate clients in Seattle happy. By partnering with American Airlines, Alaska can provide the same global access for its customers as Delta while maintaining its independence and pursuing targeted growth opportunities.
What's in it for American?
The purpose of the partnership for Alaska is thus fairly obvious. But why is a mega airline like American Airlines so eager to reciprocate?
In fact, the logic on American's side is much the same. But instead of needing to bulk up its access to the wider world, it needs to bolster its presence in the Pacific Northwest region specifically.
Seven of American Airlines' nine hub cities -- including the four largest -- are in the Eastern and Central time zones. Its two western hubs are in Phoenix and Los Angeles. This leaves it with a surprisingly weak route network in the northwestern part of the U.S.
American Airlines needs help in the northwestern part of the country. Image source: American Airlines.
Between its big hub in Seattle and smaller hubs in Portland and Anchorage, Alaska Airlines fills that gap for American Airlines. It offers service to some cities in the region that American Airlines doesn't serve at all, and faster connections (or more broadly, better flight schedules) for many others.
Delta Air Lines and United Continental have much stronger route networks than American Airlines west of the Rockies. Given that all three are in a constant battle for the business travel market, American can use all the help it can get in the Pacific Northwest, one of its few areas of weakness.
American Airlines might be interested in buying Alaska Airlines outright, but the antitrust authorities would be unlikely to let that happen. (Alaska seems to prefer operating as a stand-alone entity anyway.) But even in the absence of an outright merger, investors should expect American and Alaska to continue to tighten their bonds. They both depend on each another.
Find this article informative?
The Motley Fool's mission is to help the world invest, better. We have done this over the past 20 years by thinking long term and outside the box -- even if that means turning Wall Street on its head. To learn more about what The Motley Fool thinks about current investment trends, and receive a special free report about what might be the next big industry to come out of Silicon Valley, just click here now .
The article Why American Airlines and Alaska Air Are Teaming Up 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 has no position in any of the stocks mentioned. 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.
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By partnering with American Airlines, Alaska can provide the same global access for its customers as Delta while maintaining its independence and pursuing targeted growth opportunities. It offers service to some cities in the region that American Airlines doesn't serve at all, and faster connections (or more broadly, better flight schedules) for many others. To learn more about what The Motley Fool thinks about current investment trends, and receive a special free report about what might be the next big industry to come out of Silicon Valley, just click here now .
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A dogfight in Seattle Alaska Airlines' route network is centered on its home base of Seattle, which accounts for more than half of its capacity. Delta Air Lines and United Continental have much stronger route networks than American Airlines west of the Rockies. 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 has no position in any of the stocks mentioned.
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Alaska Airlines customers are about to get better access to American Airlines' network. Between its big hub in Seattle and smaller hubs in Portland and Anchorage, Alaska Airlines fills that gap for American Airlines. 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 has no position in any of the stocks mentioned.
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Alaska Airlines customers are about to get better access to American Airlines' network. Furthermore, Delta can offer one-stop service from Seattle to hundreds of cities across the U.S. and the rest of the world via its other hubs. What's in it for American?
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8288.0
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2015-08-06 00:00:00 UTC
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American Airlines attracts buyers
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AAL
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https://www.nasdaq.com/articles/american-airlines-attracts-buyers-2015-08-06
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nan
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nan
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(The following is an example of notable trading cited on optionMONSTER's InsideOptions Pro service yesterday.)
Transports have been strong recently, and the bulls are looking for American Airlines to take off by early next year.
About 13,000 February 50 calls were purchased mostly for $2.25 to $2.30 yesterday, according to optionMONSTER's Heat Seeker tracking program. Open interest in the strike was only 141 contracts before the session began, indicating that new money was put to work.
Long calls lock in the price where investors can buy a stock, letting them profit from a rally while risking only a small amount of capital. The relatively cheap cost of the options can also generate significant leverage on a percentage basis if shares move higher. (See our Education section)
AAL was up 0.51 percent yesterday to close at $42.96. The airline carrier's shares fell sharply earlier this year but are at the top of a range that has been in place for more than two months as fuel costs continue to decline.
Total option volume in the name topped 54,700 yesterday, 70 percent higher than its daily average for the last month. Overall calls eclipsed puts by nearly 3 to 1.
Yesterday's call buying was cited by optionMONSTER co-founder Jon "DRJ" Najarian on CNBC's " Halftime Report ."
Disclosure: Najarian owns AAL calls; Russell has no positions in the name.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(See our Education section) AAL was up 0.51 percent yesterday to close at $42.96. Disclosure: Najarian owns AAL calls; Russell has no positions in the name. Long calls lock in the price where investors can buy a stock, letting them profit from a rally while risking only a small amount of capital.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. (See our Education section) AAL was up 0.51 percent yesterday to close at $42.96. Disclosure: Najarian owns AAL calls; Russell has no positions in the name.
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(See our Education section) AAL was up 0.51 percent yesterday to close at $42.96. Disclosure: Najarian owns AAL calls; Russell has no positions in the name. About 13,000 February 50 calls were purchased mostly for $2.25 to $2.30 yesterday, according to optionMONSTER's Heat Seeker tracking program.
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(See our Education section) AAL was up 0.51 percent yesterday to close at $42.96. Disclosure: Najarian owns AAL calls; Russell has no positions in the name. The airline carrier's shares fell sharply earlier this year but are at the top of a range that has been in place for more than two months as fuel costs continue to decline.
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8289.0
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2015-08-05 00:00:00 UTC
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American Airlines Group, Inc. (AAL) Ex-Dividend Date Scheduled for August 06, 2015
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AAL
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https://www.nasdaq.com/articles/american-airlines-group-inc-aal-ex-dividend-date-scheduled-august-06-2015-2015-08-05
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nan
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American Airlines Group, Inc. ( AAL ) will begin trading ex-dividend on August 06, 2015. A cash dividend payment of $0.1 per share is scheduled to be paid on August 24, 2015. Shareholders who purchased AAL prior to the ex-dividend date are eligible for the cash dividend payment. This marks the 5th quarter that AAL has paid the same dividend. At the current stock price of $42.74, the dividend yield is .94%.
The previous trading day's last sale of AAL was $42.74, representing a -23.95% decrease from the 52 week high of $56.20 and a 52.1% increase over the 52 week low of $28.10.
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 $5.81. Zacks Investment Research reports AAL's forecasted earnings growth in 2015 as 55.37%, compared to an industry average of 10%.
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 PEZ with an increase of 5.32% over the last 100 days. PEJ 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.
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Shareholders who purchased AAL prior to the ex-dividend date are eligible for the cash dividend payment. AAL is a part of the Transportation sector, which includes companies such as FedEx Corporation ( FDX ) and Delta Air Lines, Inc. ( DAL ). Zacks Investment Research reports AAL's forecasted earnings growth in 2015 as 55.37%, compared to an industry average of 10%.
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AAL's current earnings per share, an indicator of a company's profitability, is $5.81. 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 August 06, 2015.
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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 ).
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AAL's current earnings per share, an indicator of a company's profitability, is $5.81. American Airlines Group, Inc. ( AAL ) will begin trading ex-dividend on August 06, 2015. Shareholders who purchased AAL prior to the ex-dividend date are eligible for the cash dividend payment.
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8290.0
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2015-08-04 00:00:00 UTC
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Oil's Latest Tumble Provides More Fuel for Airline Share Buybacks
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AAL
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https://www.nasdaq.com/articles/oils-latest-tumble-provides-more-fuel-airline-share-buybacks-2015-08-04
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nan
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nan
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On Monday, the price of Brent crude -- the international oil benchmark -- fell below $50/barrel for the first time in months. That leaves it down 20% from where it stood around $63 at the beginning of July.
Lower fuel prices should drive higher profits for airlines. Photo: The Motley Fool
Despite the big drop in crude oil prices since last year, fuel is still one of airlines' biggest costs. As a result, any further reduction in fuel prices should provide a big earnings lift for the airlines. At major carriers like American Airlines , Delta Air Lines , and United Continental , that could lead to substantial share buyback activity in the next year or so.
The supply demand correction
The recent turmoil in the oil market comes as investors are starting to realize what should have been obvious all along: Oil production is still far outstripping demand . OPEC is pumping more oil than it has in years. Meanwhile, U.S. oil production is still up by nearly 1 million barrels year over year and U.S. crude stockpiles are 95 million barrels above the five-year seasonal average.
The recent rout in oil prices is almost certainly unsustainable. At $60/barrel, plenty of energy companies seemed willing to invest in production increases. With oil at $50/barrel or less, the appetite for investment will be far lower.
Eventually that will lead to production declines in places like the U.S. and Canada where output has remained strong so far. However, that could still take months to occur, and with the summer driving season nearing an end, demand will drop off, too. As a result, oil prices could remain weak well into 2016 until the market fundamentals change. (If Iran oil exports surge next year, it could delay the market rebalancing even further.)
Cheap oil will drive strong airline cash flow
The airlines would love oil prices to stay low for as long as possible. But even one more year of extremely low oil prices would create a big windfall for them.
American Airlines, Delta Air Lines, and United Continental all consume about 1 billion gallons of jet fuel each quarter. The decline in oil prices just since July 1 translates to a roughly $0.30/gallon reduction in the cost of jet fuel. For American Airlines -- which doesn't hedge its fuel costs -- that represents a windfall of more than $300 million per quarter as long as it lasts.
American Airlines will see a more than $300 million quarterly tailwind from the recent drop in fuel prices. Photo: American Airlines
At Delta and United, which are slightly smaller and do engage in some hedging, the benefit may be closer to $250 million per quarter at the moment as there would be some offsetting hedge losses.
This $1 billion or greater annualized earnings tailwind will provide a significant lift to these airlines' already strong cash flow. American, Delta, and United may use this excess cash to fund increased share buyback programs.
Returning the extra cash
All three airlines have raised their buyback programs significantly in the past few months. Delta announced a new $5 billion buyback in May, while American and United both increased their buyback authorizations to $4 billion last month, up from $2 billion and $1 billion, respectively.
Delta leads the industry with a $5 billion buyback plan. Photo: The Motley Fool
Even before the most recent fuel price drop, all three airlines were generating enough cash to invest in new planes and technology, pay down debt, and catch up on pension contributions, while still returning plenty of capital to investors. This suggests that they don't have any pressing needs for the extra cash they will earn if fuel prices stay depressed.
As a result, they could use this windfall to speed up their share buybacks. And with the stocks all currently trading for less than 10 times forward earnings, they will be able to buy back a lot of stock, making a significant dent in their share counts and driving further EPS growth.
With the price of Brent crude above $60, American Airlines, Delta Air Lines, and United Continental were on pace to buy back billions of dollars of stock each in the next two years or so. Now that oil is even cheaper, that timeline is accelerating. The longer oil stays below $60, the more shares the airlines will be able to buy at bargain prices and retire. That will lead to higher earnings per share in the future -- even after oil prices (eventually) recover.
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The article Oil's Latest Tumble Provides More Fuel for Airline Share Buybacks 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 has no position in any of the stocks mentioned. 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.
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At major carriers like American Airlines , Delta Air Lines , and United Continental , that could lead to substantial share buyback activity in the next year or so. Photo: The Motley Fool Even before the most recent fuel price drop, all three airlines were generating enough cash to invest in new planes and technology, pay down debt, and catch up on pension contributions, while still returning plenty of capital to investors. With the price of Brent crude above $60, American Airlines, Delta Air Lines, and United Continental were on pace to buy back billions of dollars of stock each in the next two years or so.
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Cheap oil will drive strong airline cash flow The airlines would love oil prices to stay low for as long as possible. With the price of Brent crude above $60, American Airlines, Delta Air Lines, and United Continental were on pace to buy back billions of dollars of stock each in the next two years or so. 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.
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Photo: The Motley Fool Despite the big drop in crude oil prices since last year, fuel is still one of airlines' biggest costs. Cheap oil will drive strong airline cash flow The airlines would love oil prices to stay low for as long as possible. Photo: The Motley Fool Even before the most recent fuel price drop, all three airlines were generating enough cash to invest in new planes and technology, pay down debt, and catch up on pension contributions, while still returning plenty of capital to investors.
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Photo: The Motley Fool Despite the big drop in crude oil prices since last year, fuel is still one of airlines' biggest costs. American Airlines will see a more than $300 million quarterly tailwind from the recent drop in fuel prices. Photo: The Motley Fool Even before the most recent fuel price drop, all three airlines were generating enough cash to invest in new planes and technology, pay down debt, and catch up on pension contributions, while still returning plenty of capital to investors.
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8291.0
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2015-08-04 00:00:00 UTC
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Delta Air Lines, Inc. (DAL) Ex-Dividend Date Scheduled for August 05, 2015
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AAL
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https://www.nasdaq.com/articles/delta-air-lines-inc-dal-ex-dividend-date-scheduled-august-05-2015-2015-08-04
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nan
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nan
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Delta Air Lines, Inc. ( DAL ) will begin trading ex-dividend on August 05, 2015. A cash dividend payment of $0.135 per share is scheduled to be paid on August 28, 2015. Shareholders who purchased DAL prior to the ex-dividend date are eligible for the cash dividend payment. This represents an 50% increase over the prior quarter. At the current stock price of $45.73, the dividend yield is 1.18%.
The previous trading day's last sale of DAL was $45.73, representing a -10.44% decrease from the 52 week high of $51.06 and a 51.83% increase over the 52 week low of $30.12.
DAL is a part of the Transportation sector, which includes companies such as FedEx Corporation ( FDX ) and American Airlines Group, Inc. ( AAL ). DAL's current earnings per share, an indicator of a company's profitability, is $2.29. Zacks Investment Research reports DAL's forecasted earnings growth in 2015 as 36.53%, compared to an industry average of 7.5%.
For more information on the declaration, record and payment dates, visit the DAL Dividend History page. Our Dividend Calendar has the full list of stocks that have an ex-dividend today.
Interested in gaining exposure to DAL through an Exchange Traded Fund [ETF]?
The following ETF(s) have DAL as a top-10 holding:
PowerShares Dynamic Leisure & Entertainment Portfolio ( PEJ )
Deep Value ETF ( DVP )
iShares Transportation AverageETF ( IYT )
PowerShares DWA Consumer Cyclicals Momentum Portfolio ( PEZ )
SPDR S&P Transportation ETF ( XTN ).
The top-performing ETF of this group is PEZ with an increase of 7.07% over the last 100 days. PEJ has the highest percent weighting of DAL at 5.06%.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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DAL is a part of the Transportation sector, which includes companies such as FedEx Corporation ( FDX ) and American Airlines Group, Inc. ( AAL ). Shareholders who purchased DAL prior to the ex-dividend date are eligible for the cash dividend payment. Zacks Investment Research reports DAL's forecasted earnings growth in 2015 as 36.53%, compared to an industry average of 7.5%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. DAL is a part of the Transportation sector, which includes companies such as FedEx Corporation ( FDX ) and American Airlines Group, Inc. ( AAL ). DAL's current earnings per share, an indicator of a company's profitability, is $2.29.
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DAL is a part of the Transportation sector, which includes companies such as FedEx Corporation ( FDX ) and American Airlines Group, Inc. ( AAL ). Shareholders who purchased DAL prior to the ex-dividend date are eligible for the cash dividend payment. The previous trading day's last sale of DAL was $45.73, representing a -10.44% decrease from the 52 week high of $51.06 and a 51.83% increase over the 52 week low of $30.12.
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DAL is a part of the Transportation sector, which includes companies such as FedEx Corporation ( FDX ) and American Airlines Group, Inc. ( AAL ). A cash dividend payment of $0.135 per share is scheduled to be paid on August 28, 2015. Shareholders who purchased DAL prior to the ex-dividend date are eligible for the cash dividend payment.
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8292.0
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2015-08-03 00:00:00 UTC
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Time for Airline ETF After Solid Earnings Season? - ETF News And Commentary
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AAL
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https://www.nasdaq.com/articles/time-for-airline-etf-after-solid-earnings-season-etf-news-and-commentary-2015-08-03
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nan
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nan
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The airline stocks, which were flying low for the last three months on a stronger dollar and global growth worries cutting back on frequent flies, gained altitude and picked up speed following robust earnings this season. As a result, the pure-play aviation ETF U.S. Global Jets ETF (JETS),which lost 2.9% in the last three-month period,advanced about 5% in the last one month (as of July 29, 2015) (read:The 13 Best and Most Interesting ETFs to Launch in the First Half of 2015).
In any case, cheap fuel has been a windfall for long. The mounting middle-income population in emerging markets is benefitting worldwide customer growth. Now solid earnings results from top-notch companies have come as a feather in the cap (read: 4 Ways to Short the Energy Sector with ETFs ).
To add to this, United Continental Holdings Inc. ( UAL ) recently reduced its 2015 domestic capacity growth outlook. Delta Airlines ( DAL ) too plans to raise the rewards' program fare prices from June 1, 2016. All these initiatives by major industry players are likely to shore up the pricing profile of the sector.
The sector is now in the top 44% category of the Zacks Industry Ranks. Let's take a look at some of key earnings of the sector:
Delta Air Lines reported impressive better-than-expected earnings and revenues in the second quarter of 2015. To lessen the unfavorable impact of foreign exchange on its international operations, Delta plans to slash its international capacity by 3.5% in the fourth quarter of 2015. Delta's domestic revenues were strong with about 5% growth. Delta expects weak fuel prices to stay and continue to benefit earnings for the rest of the year.
The carrier projects fuel costs per gallon in the band of $1.90 to $2.00 in the second half which is way below $2.65 per gallon noticed in the first half of 2015. The average fuel price at Delta in the second quarter of 2015 was $2.40 per gallon, down 18% sequentially. This Zacks ETF Rank #3 (Hold) stock has a Zacks Growth & Value style score of 'A'.
United Continental came up with mixed Q2 results this month with an earnings beat and a revenue miss. Earnings were up 41.5% year over year on lower fuel costs. Revenues declined 4% on lower passenger revenues. Cargo revenues and other revenues were also downhill. Its indicators are also very promising with a Zacks ETF Rank #3, Growth, Value and Momentum scores of 'A'.
Yet another leading U.S. carrier Southwest Airlines Co.'s ( LUV ) second-quarter 2015 bottom line matched the Zacks Consensus Estimate while the top line missed the same. But investors should notice that revenues grew 2% year over year helped by 2.1% and 4.5% expansion in Passenger and Freight revenues, respectively.
Airline traffic was up 7.9% while passenger load factor inched up to 84.6% from 83.9% recorded in the year-ago quarter. LUV, with a Zacks ETF Rank #3, also boasts hopeful indicators of Growth score of 'B' and Value score of 'A'.
American Airlines Group ( AAL ) had a mixed quarter with a bottom-line beat and top line miss. Though this is a Zacks ETF Rank #5 (Strong Sell) stock and its operating metrics were downbeat in Q2, the company is worth a look as it emphasizes shareholder returns. The board of directors has authorized an additional $2 billion share buyback program. This stock is also a great pick for growth and value investors.
Apart from these heavy-weight stocks, the sector has seen sturdy performances by others. Alaska Air Group, Inc.'s ( ALK ) Q2 2015 earnings per share of $1.76 beat the Zacks Consensus Estimate of $1.73 and improved 56% from the year-ago earnings. Revenues grew 5% year over year and matched our estimates. It is a Zacks ETF Rank #2 (Buy) stock with a Growth and Value scores of 'A'.
ThoughJetBlue Airways Corporation's ( JBLU ) second-quarter 2015 earnings per share matched the Zacks Consensus Estimate and revenues missed the same, the top and bottom lines grew year over year. JBLU has a Zacks ETF Rank #2, Growth and Value scores of 'A' and a Momentum score of 'B'.
How to Play?
By now, one must have realized that the underlying trend is solid in the airlines industry. So, investors might play the trend via basket approach to tap the entire potential of the space. And to
do so, what could be the best option other than JETS ETF (read: Inside the Flight of a New Airline ETF (JETS) )?
The fund holds 33 stocks in its portfolio and is concentrated on a few individual securities, as it allocates about 70% to the top 10 holdings. United Continental (12.4%), Delta Airlines (12.33%), Southwest (12.23%) and American Airlines (11.04%) are the top four elements in the basket, with a combined share of about 45%. Other firms mentioned above also get places in the top 10 chart, each with over 4% weight. The product charges 60 bps in fees.
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
US GLOBAL JETS (JETS): ETF Research Reports
UNITED CONT HLD (UAL): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
SOUTHWEST AIR (LUV): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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American Airlines Group ( AAL ) had a mixed quarter with a bottom-line beat and top line miss. Click to get this free report US GLOBAL JETS (JETS): ETF Research Reports UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report To read this article on Zacks.com click here. Now solid earnings results from top-notch companies have come as a feather in the cap (read: 4 Ways to Short the Energy Sector with ETFs ).
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Click to get this free report US GLOBAL JETS (JETS): ETF Research Reports UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group ( AAL ) had a mixed quarter with a bottom-line beat and top line miss. Yet another leading U.S. carrier Southwest Airlines Co.'s ( LUV ) second-quarter 2015 bottom line matched the Zacks Consensus Estimate while the top line missed the same.
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Click to get this free report US GLOBAL JETS (JETS): ETF Research Reports UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group ( AAL ) had a mixed quarter with a bottom-line beat and top line miss. This Zacks ETF Rank #3 (Hold) stock has a Zacks Growth & Value style score of 'A'.
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American Airlines Group ( AAL ) had a mixed quarter with a bottom-line beat and top line miss. Click to get this free report US GLOBAL JETS (JETS): ETF Research Reports UNITED CONT HLD (UAL): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report ALASKA AIR GRP (ALK): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report To read this article on Zacks.com click here. The sector is now in the top 44% category of the Zacks Industry Ranks.
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2015-07-30 00:00:00 UTC
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Why American Airlines Will Still Have a Good 2016
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AAL
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https://www.nasdaq.com/articles/why-american-airlines-will-still-have-good-2016-2015-07-30
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Early Friday morning, American Airlines shares looked set to have a good day after the company reported a solid Q2 profit and doubled its share repurchase authorization to $4 billion. But during the company'searnings call American's management dropped a bombshell, telling investors that unit revenue may continue to decline until the second half of 2016.
That unwelcome revelation helped drive the stock down 7% for the day, ending the week at less than $40. While American Airlines shares have regained some ground since then, they still remain about 27% below the all-time high set just a few months ago.
American Airlines YTD Stock Performance, data by YCharts
Yet I remain very bullish on American Airlines stock despite the outlook for fairly weak revenue performance over the next year. The stock trades at a bargain valuation, and the company should be able to maintain a high profit margin next year thanks to improved cost performance.
Facing bigger unit revenue headwinds than peers
American's unit revenue guidance came as a shock to many investors because rivals like Delta Air Lines have offered much better forecasts. Earlier this month, Delta's management told investors that unit revenue was likely to get back to the flat line -- if not positive territory -- by the end of the year.
To achieve this performance, Delta Air Lines has scheduled significant capacity cuts on weaker international routes beginning this fall. The biggest cuts are occurring in Japan , where Delta has historically operated an international hub in Tokyo.
Delta expects unit revenue performance to improve dramatically by Q4. Photo: The Motley Fool
But American Airlines faces bigger headwinds than Delta. It faces elevated competition in two of its key hub markets: Dallas and Chicago. It also has by far the biggest exposure to Brazil of any U.S. carrier. Economic weakness and a plunging currency there have driven a sharp contraction in air travel demand that American hasn't been able to offset despite slashing its capacity.
On the other hand, American Airlines plans to complete the biggest step of its integration with US Airways in October by merging reservations systems. That will allow the company to better hone its capacity deployment and revenue management, driving revenue synergies starting next year.
The key point is that American Airlines has clear unit revenue catalysts ahead. This, combined with the impact of easier comparisons, means that the company should be able to hit management's guidance for a return to unit revenue growth by the second half of 2016. Unit revenue isn't likely to keep falling indefinitely.
Nonfuel cost trends will improve
In 2015, American Airlines has benefited enormously from low oil prices . The company is on pace to save more than $1/gallon compared to its average jet fuel price of $2.91/gallon last year. That will translate to year-over-year cost savings of about $5 billion.
That was a lucky break because otherwise the company would have been hard-pressed to maintain -- let alone grow -- its earnings this year. Not only has unit revenue plunged this year, but nonfuel unit costs are expected to rise 4%-6% for the full year for American's mainline operations.
American will face a much more benign nonfuel cost environment next year. The company implemented new pilot and flight attendant contracts earlier this year, driving annualized cost increases of $650 million and $193 million, respectively. Together, these cost increases are driving about 4 percentage points of mainline nonfuel unit cost growth.
Nonfuel cost trends should improve at American Airlines in 2016. Photo: American Airlines
While American Airlines is still working on new joint contracts with some of its other labor groups, such as its mechanics and dispatchers, those cost increases will be a fraction of the nearly $850 million headwind the company has faced this year. More subdued labor cost increases -- offset by productivity improvements -- will enable much better cost performance in 2016.
Furthermore, American Airlines is spending extra on increased staffing this fall to ensure a smooth reservation system integration. If all goes as planned, it will be able to remove those costs next year, adding another nonfuel cost tailwind.
Finally, American Airlines will continue its major fleet overhaul. It is rapidly retiring its old 757s and MD-80s in favor of new aircraft that offer significant unit cost benefits. It is also fitting more seats on some existing aircraft to reduce unit costs.
What it means for 2016
While American Airlines' unit revenue is expected to continue falling in the first half of 2016, the declines should be more moderate than what the carrier is currently experiencing. Meanwhile, American may be able to hold its nonfuel unit costs flat, in contrast to the rapid cost inflation of 2015.
Assuming oil prices don't spike again -- which is certainly not guaranteed -- American Airlines should be able to maintain a very strong profit margin in the first half of 2016. And if unit revenue starts to grow again in the second half of the year, that could drive a return to profit growth.
American Airlines stock trades for less than 5 times projected 2015 pretax earnings. That low valuation implies that investors doubt that the company can sustain profitability anywhere close to this level.
But based on the current outlook for unit revenue, nonfuel unit costs, fuel prices, and fuel efficiency gains, American Airlines should be able to avoid a steep decline in profitability. That, along with the company's big share buyback plan, could get the stock back on track.
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The article Why American Airlines Will Still Have a Good 2016 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 Inc. The Motley Fool has no position in any of the stocks mentioned. 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 .
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Earlier this month, Delta's management told investors that unit revenue was likely to get back to the flat line -- if not positive territory -- by the end of the year. Economic weakness and a plunging currency there have driven a sharp contraction in air travel demand that American hasn't been able to offset despite slashing its capacity. To learn more about what The Motley Fool thinks about current investment trends, and receive a special free report about what might be the next big industry to come out of Silicon Valley, just click here now .
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Facing bigger unit revenue headwinds than peers American's unit revenue guidance came as a shock to many investors because rivals like Delta Air Lines have offered much better forecasts. Photo: The Motley Fool But American Airlines faces bigger headwinds than Delta. But based on the current outlook for unit revenue, nonfuel unit costs, fuel prices, and fuel efficiency gains, American Airlines should be able to avoid a steep decline in profitability.
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American Airlines YTD Stock Performance, data by YCharts Yet I remain very bullish on American Airlines stock despite the outlook for fairly weak revenue performance over the next year. Not only has unit revenue plunged this year, but nonfuel unit costs are expected to rise 4%-6% for the full year for American's mainline operations. Photo: American Airlines While American Airlines is still working on new joint contracts with some of its other labor groups, such as its mechanics and dispatchers, those cost increases will be a fraction of the nearly $850 million headwind the company has faced this year.
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The stock trades at a bargain valuation, and the company should be able to maintain a high profit margin next year thanks to improved cost performance. Not only has unit revenue plunged this year, but nonfuel unit costs are expected to rise 4%-6% for the full year for American's mainline operations. Together, these cost increases are driving about 4 percentage points of mainline nonfuel unit cost growth.
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2015-07-30 00:00:00 UTC
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The Zacks Analyst Blog Highlights: American Airlines Group, JetBlue Airways, United Continental Holdings, Southwest Airlines and Delta Air Lines - Press Releases
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AAL
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https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights%3A-american-airlines-group-jetblue-airways-united
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For Immediate Release
Chicago, IL - July 30, 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 ( JBLU ), United Continental Holdings ( UAL ), Southwest Airlines ( LUV ) and Delta Air Lines ( DAL ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Wednesday's Analyst Blog:
Airline Stock Roundup: Earnings Abound
The past week saw industry heavyweights like American Airlines Group ( AAL ), JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ) and Southwest Airlines ( LUV ) revealing their respective second-quarter 2015 financial numbers. American Airlines and United Continental reported earnings that topped expectations yet again, aided by low fuel costs. JetBlue and Southwest reported in-line earnings. However, overall top-line growth turned out to be dismal.
On the non-earnings front, reports of another probe - this time by the U.S. Transportation Department - on possible price gouging by five major airline companies, dominated headlines. Delta Air Lines ( DAL ) also made news courtesy its plans to launch an exclusive upgrade offer aimed at some of its elite frequent fliers.
On the price front, the NYSE ARCA Airline index declined 5.6% over the past week.
(Read the last Airline Stock Roundup for July 23, 2015 )
Recap of the Past Week's Most Important Stories
1. United Continental Holdings posted adjusted earnings of $3.31 per share in the second quarter of 2015, ahead of the Zacks Consensus Estimate of $3.29. The company stated that consolidated passenger revenue per available seat mile (PRASM) is expected to decline in the range of 5% to 7% in the third quarter. Capacity for 2015 is expected to grow in the band of 1% to 1.5% (read more: United Continental Beats Q2 Earnings, PRASM Woes Stay ).
2. American Airlines Group reported higher-than-expected earnings in the second quarter of 2015. The company recorded adjusted earnings per share of $2.62, beating the Zacks Consensus Estimate by 3 cents. Consolidated PRASM declined 6.9% to 13.57 cents (read more: American Airlines Group Tops Earnings on Lower Fuel Costs ).
3. The U.S. Transportation Department is investigating the possible price gouging by major US carriers such as Delta, Southwest Airlines, American Airlines and JetBlue Airways following the Amtrak train crash in May. According to reports, the carriers had allegedly hiked ticket prices in the Northeast Corridor to unusual levels when train services were suspended therein post the deadly Amtrak crash in May (read more: US Probing Airline Price Gouging After Amtrak Crash ).
4. Southwest Airlines reported mixed second-quarter 2015 financial numbers with the bottom line coming in line with the Zacks Consensus Estimate and the top line missing the same. The carrier expects PRASM in the third quarter of 2015 to drop 1% year over year (read more: Southwest Airlines Q2 Earnings in Line, Revenues Miss ).
5. In a bid to further improve the flying experience of its "high value customers", Delta intends to launch an upgrade program shortly. The upgrade will allow elite fliers of the airline the option to switch from commercial flights to a private jet flight at costs varying between $300 and $800, according to a Bloomberg report. The upgrade option will be exclusively open to fliers who have achieved "medallion" status in the carrier's SkyMiles frequent-flier program.
6 JetBlue Airways reported second-quarter 2015 earnings per share of 44 cents, in line with the Zacks Consensus Estimate. Revenues increased 7.9% on a year-over-year basis to $1,612 million, narrowly missing the Zacks Consensus Estimate of $1,614 million.
Airline traffic, measured in revenue passenger miles, went up 8.7% on a 7.5% rise in capacity. Load factor (percentage of seats filled with passengers) improved 100 basis points year over year to 85.6%. During the second quarter, yield per passenger mile was up 0.2% at 14.28 cents. Passenger revenue per available seat mile (PRASM) or unit revenue for the reported quarter climbed 1.4% to 12.22 cents.
Another important metric - operating revenue per available seat mile (RASM) - came in at 13.17 cents, up 0.4%. Average fuel cost (including fuel taxes) during the second quarter of 2015 declined a significant 30.9% to $2.13 per gallon. The carrier projects capacity to increase in the band of 8.5% to 10.5% in the third quarter and in the 7% to 9% range in 2015.
Additionally, it now expects annual capacity growth at the higher end of the projected 7%-9% range. Expecting oil prices to remain weak, the carrier projects fuel costs at $1.95 per gallon (inclusive of fuel hedges and fuel taxes) for the third quarter. JetBlue stated that it expects PRASM to increase by 0% to 1% in the month of July.
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About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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AMER AIRLINES (AAL): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
SOUTHWEST AIR (LUV): 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.
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Stocks recently featured in the blog include the American Airlines Group ( AAL ), JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ), Southwest Airlines ( LUV ) and Delta Air Lines ( DAL ). Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: Earnings Abound The past week saw industry heavyweights like American Airlines Group ( AAL ), JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ) and Southwest Airlines ( LUV ) revealing their respective second-quarter 2015 financial numbers. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here.
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Stocks recently featured in the blog include the American Airlines Group ( AAL ), JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ), Southwest Airlines ( LUV ) and Delta Air Lines ( DAL ). Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: Earnings Abound The past week saw industry heavyweights like American Airlines Group ( AAL ), JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ) and Southwest Airlines ( LUV ) revealing their respective second-quarter 2015 financial numbers. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here.
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Stocks recently featured in the blog include the American Airlines Group ( AAL ), JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ), Southwest Airlines ( LUV ) and Delta Air Lines ( DAL ). Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: Earnings Abound The past week saw industry heavyweights like American Airlines Group ( AAL ), JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ) and Southwest Airlines ( LUV ) revealing their respective second-quarter 2015 financial numbers. Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here.
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Here are highlights from Wednesday's Analyst Blog: Airline Stock Roundup: Earnings Abound The past week saw industry heavyweights like American Airlines Group ( AAL ), JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ) and Southwest Airlines ( LUV ) revealing their respective second-quarter 2015 financial numbers. Stocks recently featured in the blog include the American Airlines Group ( AAL ), JetBlue Airways ( JBLU ), United Continental Holdings ( UAL ), Southwest Airlines ( LUV ) and Delta Air Lines ( DAL ). Click to get this free report AMER AIRLINES (AAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report UNITED CONT HLD (UAL): Free Stock Analysis Report SOUTHWEST AIR (LUV): Free Stock Analysis Report DELTA AIR LINES (DAL): Free Stock Analysis Report To read this article on Zacks.com click here.
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2015-07-28 00:00:00 UTC
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New Strong Sell Stocks for July 28th - Tale of the Tape
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AAL
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https://www.nasdaq.com/articles/new-strong-sell-stocks-for-july-28th-tale-of-the-tape-2015-07-28
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Here are 5 stocks added to the Zacks Rank #5 (Strong Sell) list today:
Allied World Assurance Co Holdings, AG. ( AWH )
Altisource Residential Corp ( RESI )
American Airlines Group Inc ( AAL )
America Movil SAB de CV ( AMX )
Astec Industries, Inc. ( ASTE )
View the entire Zacks Rank #5 List .
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
ALLIED WORLD AS (AWH): Free Stock Analysis Report
ALTISOURCE RESI (RESI): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
AMER MOVIL-ADR (AMX): Free Stock Analysis Report
ASTEC INDS INC (ASTE): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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( AWH ) Altisource Residential Corp ( RESI ) American Airlines Group Inc ( AAL ) America Movil SAB de CV ( AMX ) Astec Industries, Inc. ( ASTE ) View the entire Zacks Rank #5 List . Click to get this free report ALLIED WORLD AS (AWH): Free Stock Analysis Report ALTISOURCE RESI (RESI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report AMER MOVIL-ADR (AMX): Free Stock Analysis Report ASTEC INDS INC (ASTE): Free Stock Analysis Report To read this article on Zacks.com click here. Here are 5 stocks added to the Zacks Rank #5 (Strong Sell) list today: Allied World Assurance Co Holdings, AG.
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( AWH ) Altisource Residential Corp ( RESI ) American Airlines Group Inc ( AAL ) America Movil SAB de CV ( AMX ) Astec Industries, Inc. ( ASTE ) View the entire Zacks Rank #5 List . Click to get this free report ALLIED WORLD AS (AWH): Free Stock Analysis Report ALTISOURCE RESI (RESI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report AMER MOVIL-ADR (AMX): Free Stock Analysis Report ASTEC INDS INC (ASTE): Free Stock Analysis Report To read this article on Zacks.com click here. Here are 5 stocks added to the Zacks Rank #5 (Strong Sell) list today: Allied World Assurance Co Holdings, AG.
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Click to get this free report ALLIED WORLD AS (AWH): Free Stock Analysis Report ALTISOURCE RESI (RESI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report AMER MOVIL-ADR (AMX): Free Stock Analysis Report ASTEC INDS INC (ASTE): 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. ( AWH ) Altisource Residential Corp ( RESI ) American Airlines Group Inc ( AAL ) America Movil SAB de CV ( AMX ) Astec Industries, Inc. ( ASTE ) View the entire Zacks Rank #5 List .
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( AWH ) Altisource Residential Corp ( RESI ) American Airlines Group Inc ( AAL ) America Movil SAB de CV ( AMX ) Astec Industries, Inc. ( ASTE ) View the entire Zacks Rank #5 List . Click to get this free report ALLIED WORLD AS (AWH): Free Stock Analysis Report ALTISOURCE RESI (RESI): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report AMER MOVIL-ADR (AMX): Free Stock Analysis Report ASTEC INDS INC (ASTE): Free Stock Analysis Report To read this article on Zacks.com click here. Here are 5 stocks added to the Zacks Rank #5 (Strong Sell) list today: Allied World Assurance Co Holdings, AG.
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2015-07-28 00:00:00 UTC
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Zacks Industry Outlook Highlights: Southwest Airlines, American Airlines Group, Delta Air Lines, United Continental Holdings and JetBlue Airways - Press Releases
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AAL
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https://www.nasdaq.com/articles/zacks-industry-outlook-highlights%3A-southwest-airlines-american-airlines-group-delta-air
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Chicago, IL - July 28, 2015 - Today, Zacks Equity Research discusses the Airlines, including Southwest Airlines ( LUV ), American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and JetBlue Airways Corporation ( JBLU ).
Industry: Airlines
Link: http://www.zacks.com/commentary/51989/airline-industry-stock-outlook---july-2015
Have Airline Stocks Run Out of Steam?
Unfortunately, this looks to be the case, going by controversies that have hit the not-so-long-ago high-flying sector over the past few months. In May, the industry was rocked by capacity and pricing fears that caused a loss of approximately $10 billion in market value in one single day.
The massive sell-off was triggered by Southwest Airlines' ( LUV ) statement that it intends to increase its capacity in the range of 7% to 8% in 2015 as opposed to the earlier projection of a 7% increase. Investors were clearly concerned that airline capacity growth at a rate higher than the U.S. GDP would lead to an oversupplied market. Later however, in response to the investor reservations, the carrier scaled back its capacity growth plans to 7%.
Another major event that sent airline stocks crashing was the news of a probe by the Department of Justice (DOJ), on the possibility of unlawful coordination by some carriers to limit the availability of seats, with the objective of keeping airfares high. American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and Southwest Airlines have confirmed the receipt of written communication from the DOJ seeking information. A series of lawsuits have also been filed by passengers against the said carriers since the news surfaced.
Moreover, the dispute between Delta and Southwest Airlines over gates at the Dallas Love Field airport has also been viewed with a grain of salt. Also, the upward movement of oil prices (compared to the lows witnessed last year) has somewhat restricted the altitude gained by airline stocks. All this jointly resulted in the NYSE ARCA Airline index losing almost 9% through the first half of 2015.
Furthermore, the recent reports that the U.S. Transportation Department is investigating the possible price gouging by major U.S. carriers such as Delta, Southwest, American Airlines and JetBlue Airways Corporation ( JBLU ) following the Amtrak train crash in May have further added to the gloom for the airline industry.
Not All Doom and Gloom
However, it has not been all bad news for the industry over the past few months. At its annual meeting, the International Air Transport Association (IATA) predicted that the airline industry will continue to see good times through 2015, thanks to weak oil prices. The IATA increased its projection for 2015 global net profit for the industry to $29.3 billion from the earlier projection of $25 billion. In comparison, the 2014 figure was $16.4 billion.
The bulk of the global profits ($15.7 billion) is expected to come 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 expected to decline 0.7% to $727 billion mainly due to the strength of the U.S. dollar.
The IATA suggests that demand for passenger travel will improve in 2015 from 2014 levels, thanks to an improving economy. According to the forecast, 2015 is expected to see air travel growth of 6.7% compared with 6% growth witnessed last year. Moreover, projected air travel growth is higher than the trend witnessed in the last two decades, according to the IATA report.
Capacity is projected to increase by 6.2% in 2015 as opposed to 5.8% in 2014. Customers, on the other hand, 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%. Although it is a fact that most carriers hedge at least some of their fuel costs, the majority of them should still continue to benefit considerably from the plunge in oil prices. Notably, carriers use a combination of calls, swaps and collars at varying WTI crude-equivalent price levels to hedge fuel costs.
Moreover, according to the IATA forecast, cargo is expected to witness the strongest growth this year since 2010. According to the IATA report, year 2015 will see commercial airline companies taking delivery of more than 1,700 new aircraft. This requires substantial investment, projected to reach approximately $180 billion.
Buoyed by their sound financial health, several carriers have voiced their intentions to invest heavily toward upgrading overall facilities associated with customer satisfaction. This is likely to result in greater travel demand, improved goodwill and eventually, a higher top line.
Positive A4A Forecast
According to a forecast released by Airlines for America ("A4A") - the largest airline trade association in the U.S. - the ongoing summer season (Jun 1-Aug 31) will be one of the busiest of all times for American carriers in terms of air travel. An improving U.S. economy, strong recovery in the labor market and low fuel cost is expected to drive passenger volumes this summer to an all-time high. Moreover, the projected total volume (222 million) is 4.5% higher than the year-ago figure.
The busy summer travel schedule is mainly a reflection of the record-high levels of international travel expected by the trade organization. A4A has predicted that approximately 31 million passengers will fly abroad on U.S. airlines during the period, again an all-time record. The top 5 international destinations from the country appear to be Canada, Mexico, the United Kingdom, Germany and Japan.
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.
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SOUTHWEST AIR (LUV): Free Stock Analysis Report
AMER AIRLINES (AAL): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Chicago, IL - July 28, 2015 - Today, Zacks Equity Research discusses the Airlines, including Southwest Airlines ( LUV ), American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and JetBlue Airways Corporation ( JBLU ). American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and Southwest Airlines have confirmed the receipt of written communication from the DOJ seeking information. 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 UNITED CONT HLD (UAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report To read this article on Zacks.com click here.
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Chicago, IL - July 28, 2015 - Today, Zacks Equity Research discusses the Airlines, including Southwest Airlines ( LUV ), American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and JetBlue Airways Corporation ( JBLU ). American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and Southwest Airlines have confirmed the receipt of written communication from the DOJ seeking information. 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 UNITED CONT HLD (UAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report To read this article on Zacks.com click here.
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Chicago, IL - July 28, 2015 - Today, Zacks Equity Research discusses the Airlines, including Southwest Airlines ( LUV ), American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and JetBlue Airways Corporation ( JBLU ). 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 UNITED CONT HLD (UAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report To read this article on Zacks.com click here. American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and Southwest Airlines have confirmed the receipt of written communication from the DOJ seeking information.
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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 UNITED CONT HLD (UAL): Free Stock Analysis Report JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report To read this article on Zacks.com click here. Chicago, IL - July 28, 2015 - Today, Zacks Equity Research discusses the Airlines, including Southwest Airlines ( LUV ), American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and JetBlue Airways Corporation ( JBLU ). American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and Southwest Airlines have confirmed the receipt of written communication from the DOJ seeking information.
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8297.0
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2015-07-28 00:00:00 UTC
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5 Things American Airlines Group, Inc. Management Wants You to Know
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AAL
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https://www.nasdaq.com/articles/5-things-american-airlines-group-inc-management-wants-you-know-2015-07-28
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nan
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nan
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American Airlines posted a record $1.9 billion profit last quarter. While that is believed to be the highest quarterly profit (excluding special items) in aviation history, American Airlines stock fell 7% on Friday following the earnings report.
The company's sometimes-contentiousearnings conference calllikely played a role in the poor stock performance. So what did American Airlines' management say to cause such a sharp reaction from investors? Let's take a look.
Taking on some extra costs
American Airlines is keeping some extra personnel around to ensure a smooth integration. Photo: American Airlines
Earlier this month, American Airlines increased its estimate for mainline unit cost growth for the second half of 2015. It attributed the increases to "lower capacity, timing of expenses shifting from the second quarter and increased investment in the operations to ensure operating reliability during integration."
CFO Derek Kerr confirmed that American Airlines is delaying headcount reductions in order to have extra reservations and customer service staff available, particularly for the reservation system integration scheduled for October. But by mid-2016, the company will be back on plan, which will mean better unit cost performance.
Unit revenue outlook for the next year is weak
The biggest revelation on theearnings callwas that American Airlines doesn't expect its unit revenue trend to turn positive again in the near future. That's more pessimistic than what competitors have forecast.
Yet this is to be expected given the unique headwinds that American Airlines faces. It is by far the biggest U.S. carrier in Brazil and Venezuela, two key markets where demand has plummeted. American is also facing a big competitive capacity increase in the Dallas-Fort Worth market, where it operates its biggest hub. Capacity growth there won't fully annualize until next summer.
Turning the corner
Unlocking revenue synergies will ultimately be a critical catalyst for American Airlines to return to unit revenue growth. Kirby estimated that the annual benefit from reallocating aircraft between the American Airlines and US Airways networks could reach $300 million.
Revenue synergies will pave the way to an eventual unit revenue recovery. Source: American Airlines.
That process can't start immediately after the reservation system integration. But it should begin in earnest during 2016, with the benefits ramping up over a 12-18 month period. This should contribute to a unit revenue recovery in the second half of 2016 and beyond.
Management also thinks it's only halfway to achieving the potential revenue synergies from boosting connectivity across the American Airlines and US Airways route networks. The rest of those benefits (approximately $150 million annually) will also come in the year or two following the reservation system integration.
Revenue tends to follow cost trends
While American Airlines expects unit revenue to continue declining for the next year, CEO Doug Parker made it clear that he thinks the market is overreacting to this trend. His main point was that just as airlines cut back capacity when fuel prices rose, they are adding capacity now because fuel is cheaper.
Even though that leads to lower unit revenue, profitability is still much higher because the fuel cost benefit far outweighs the unit revenue weakness. Furthermore, this interpretation implies that airlines would quickly return to "capacity discipline" if oil prices spike in the future. That's good since it means an oil price spike wouldn't necessarily drive severe margin deterioration at American Airlines and its peers.
The stock seems cheap
Parker also pointed out that American Airlines aggressively repurchased stock last quarter. He made it clear that the company isn't just buying stock to try to prop up the stock price or juice EPS. It is buying back stock because it sees the shares as being extremely undervalued.
Considering that American Airlines stock currently trades for less than five times projected 2015 pre-tax earnings, it's hard to disagree. Even if American experiences some margin deterioration next year, there's a big margin of safety for investors at the current valuation.
It's clear that American's downbeat outlook for unit revenue over the next 12 months caused the stock's big slide last Friday. But as Parker implied, investors should probably be paying more attention to the stock's bargain-basement valuation than to the near-term revenue outlook.
Find this article informative?
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The article 5 Things American Airlines Group, Inc. Management Wants You to Know originally appeared on Fool.com.
Adam Levine-Weinberg is long November 2015 $40 calls on American Airlines Group. The Motley Fool has no position in any of the stocks mentioned. 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.
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While that is believed to be the highest quarterly profit (excluding special items) in aviation history, American Airlines stock fell 7% on Friday following the earnings report. Management also thinks it's only halfway to achieving the potential revenue synergies from boosting connectivity across the American Airlines and US Airways route networks. To learn more about what The Motley Fool thinks about current investment trends, and receive a special free report about what might be the next big industry to come out of Silicon Valley, just click here now .
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Photo: American Airlines Earlier this month, American Airlines increased its estimate for mainline unit cost growth for the second half of 2015. Unit revenue outlook for the next year is weak The biggest revelation on theearnings callwas that American Airlines doesn't expect its unit revenue trend to turn positive again in the near future. That's good since it means an oil price spike wouldn't necessarily drive severe margin deterioration at American Airlines and its peers.
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Photo: American Airlines Earlier this month, American Airlines increased its estimate for mainline unit cost growth for the second half of 2015. Unit revenue outlook for the next year is weak The biggest revelation on theearnings callwas that American Airlines doesn't expect its unit revenue trend to turn positive again in the near future. Revenue tends to follow cost trends While American Airlines expects unit revenue to continue declining for the next year, CEO Doug Parker made it clear that he thinks the market is overreacting to this trend.
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He made it clear that the company isn't just buying stock to try to prop up the stock price or juice EPS. It's clear that American's downbeat outlook for unit revenue over the next 12 months caused the stock's big slide last Friday. To learn more about what The Motley Fool thinks about current investment trends, and receive a special free report about what might be the next big industry to come out of Silicon Valley, just click here now .
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8298.0
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2015-07-27 00:00:00 UTC
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Airline Industry Stock Outlook - July 2015 - Zacks Analyst Interviews
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AAL
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https://www.nasdaq.com/articles/airline-industry-stock-outlook-july-2015-zacks-analyst-interviews-2015-07-27
|
nan
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nan
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Have Airline Stocks Run Out of Steam?
Unfortunately, this looks to be the case, going by controversies that have hit the not-so-long-ago high-flying sector over the past few months. In May, the industry was rocked by capacity and pricing fears that caused a loss of approximately $10 billion in market value in one single day.
The massive sell-off was triggered by Southwest Airlines' ( LUV ) statement that it intends to increase its capacity in the range of 7% to 8% in 2015 as opposed to the earlier projection of a 7% increase. Investors were clearly concerned that airline capacity growth at a rate higher than the U.S. GDP would lead to an oversupplied market. Later however, in response to the investor reservations, the carrier scaled back its capacity growth plans to 7%.
Another major event that sent airline stocks crashing was the news of a probe by the Department of Justice (DOJ), on the possibility of unlawful coordination by some carriers to limit the availability of seats, with the objective of keeping airfares high. American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and Southwest Airlines have confirmed the receipt of written communication from the DOJ seeking information. A series of lawsuits have also been filed by passengers against the said carriers since the news surfaced.
Moreover, the dispute between Delta and Southwest Airlines over gates at the Dallas Love Field airport has also been viewed with a grain of salt. Also, the upward movement of oil prices (compared to the lows witnessed last year) has somewhat restricted the altitude gained by airline stocks. All this jointly resulted in the NYSE ARCA Airline index losing almost 9% through the first half of 2015.
Furthermore, the recent reports that the U.S. Transportation Department is investigating the possible price gouging by major U.S. carriers such as Delta, Southwest, American Airlines and JetBlue Airways Corporation ( JBLU ) following the Amtrak train crash in May have further added to the gloom for the airline industry.
Not All Doom and Gloom
However, it has not been all bad news for the industry over the past few months. At its annual meeting, the International Air Transport Association (IATA) predicted that the airline industry will continue to see good times through 2015, thanks to weak oil prices. The IATA increased its projection for 2015 global net profit for the industry to $29.3 billion from the earlier projection of $25 billion. In comparison, the 2014 figure was $16.4 billion.
The bulk of the global profits ($15.7 billion) is expected to come 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 expected to decline 0.7% to $727 billion mainly due to the strength of the U.S. dollar.
The IATA suggests that demand for passenger travel will improve in 2015 from 2014 levels, thanks to an improving economy. According to the forecast, 2015 is expected to see air travel growth of 6.7% compared with 6% growth witnessed last year. Moreover, projected air travel growth is higher than the trend witnessed in the last two decades, according to the IATA report.
Capacity is projected to increase by 6.2% in 2015 as opposed to 5.8% in 2014. Customers, on the other hand, 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%. Although it is a fact that most carriers hedge at least some of their fuel costs, the majority of them should still continue to benefit considerably from the plunge in oil prices. Notably, carriers use a combination of calls, swaps and collars at varying WTI crude-equivalent price levels to hedge fuel costs.
Moreover, according to the IATA forecast, cargo is expected to witness the strongest growth this year since 2010. According to the IATA report, year 2015 will see commercial airline companies taking delivery of more than 1,700 new aircraft. This requires substantial investment, projected to reach approximately $180 billion.
Buoyed by their sound financial health, several carriers have voiced their intentions to invest heavily toward upgrading overall facilities associated with customer satisfaction. This is likely to result in greater travel demand, improved goodwill and eventually, a higher top line.
Positive A4A Forecast
According to a forecast released by Airlines for America ("A4A") - the largest airline trade association in the U.S. - the ongoing summer season (Jun 1-Aug 31) will be one of the busiest of all times for American carriers in terms of air travel. An improving U.S. economy, strong recovery in the labor market and low fuel cost is expected to drive passenger volumes this summer to an all-time high. Moreover, the projected total volume (222 million) is 4.5% higher than the year-ago figure.
The busy summer travel schedule is mainly a reflection of the record-high levels of international travel expected by the trade organization. A4A has predicted that approximately 31 million passengers will fly abroad on U.S. airlines during the period, again an all-time record. The top 5 international destinations from the country appear to be Canada, Mexico, the United Kingdom, Germany and Japan.
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 for the airline industry is currently #116, indicating the group's near-term Neutral outlook.
Earnings Trends
The airline industry falls under the broader transportation sector. The major airline companies have already revealed their second quarter 2015 numbers. Low fuel costs have helped majority of them come up with better-than-expected earnings, however the top line growth has been dismal.
In the transportation sector 38.5% companies have reported earnings. Total earnings for these companies are up 7.4% on only 0.4% higher revenues, with 40% of the companies beating earnings estimates and 20% coming ahead of revenue expectations.
For 2015, the sector's earnings are poised to expand around 20.3%.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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, 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 ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and Southwest Airlines have confirmed the receipt of written communication from the DOJ seeking information. 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. Another major event that sent airline stocks crashing was the news of a probe by the Department of Justice (DOJ), on the possibility of unlawful coordination by some carriers to limit the availability of seats, with the objective of keeping airfares high.
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American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and Southwest Airlines have confirmed the receipt of written communication from the DOJ seeking information. 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 IATA increased its projection for 2015 global net profit for the industry to $29.3 billion from the earlier projection of $25 billion.
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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. American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and Southwest Airlines have confirmed the receipt of written communication from the DOJ seeking information. Furthermore, the recent reports that the U.S. Transportation Department is investigating the possible price gouging by major U.S. carriers such as Delta, Southwest, American Airlines and JetBlue Airways Corporation ( JBLU ) following the Amtrak train crash in May have further added to the gloom for the airline industry.
|
American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and Southwest Airlines have confirmed the receipt of written communication from the DOJ seeking information. 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. Moreover, projected air travel growth is higher than the trend witnessed in the last two decades, according to the IATA report.
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8299.0
|
2015-07-27 00:00:00 UTC
|
Airline Industry Stock Outlook - July 2015 - Industry Outlook
|
AAL
|
https://www.nasdaq.com/articles/airline-industry-stock-outlook-july-2015-industry-outlook-2015-07-27
|
nan
|
nan
|
Have Airline Stocks Run Out of Steam?
Unfortunately, this looks to be the case, going by controversies that have hit the not-so-long-ago high-flying sector over the past few months. In May, the industry was rocked by capacity and pricing fears that caused a loss of approximately $10 billion in market value in one single day.
The massive sell-off was triggered by Southwest Airlines' ( LUV ) statement that it intends to increase its capacity in the range of 7% to 8% in 2015 as opposed to the earlier projection of a 7% increase. Investors were clearly concerned that airline capacity growth at a rate higher than the U.S. GDP would lead to an oversupplied market. Later however, in response to the investor reservations, the carrier scaled back its capacity growth plans to 7%.
Another major event that sent airline stocks crashing was the news of a probe by the Department of Justice (DOJ), on the possibility of unlawful coordination by some carriers to limit the availability of seats, with the objective of keeping airfares high. American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and Southwest Airlines have confirmed the receipt of written communication from the DOJ seeking information. A series of lawsuits have also been filed by passengers against the said carriers since the news surfaced.
Moreover, the dispute between Delta and Southwest Airlines over gates at the Dallas Love Field airport has also been viewed with a grain of salt. Also, the upward movement of oil prices (compared to the lows witnessed last year) has somewhat restricted the altitude gained by airline stocks. All this jointly resulted in the NYSE ARCA Airline index losing almost 9% through the first half of 2015.
Furthermore, the recent reports that the U.S. Transportation Department is investigating the possible price gouging by major U.S. carriers such as Delta, Southwest, American Airlines and JetBlue Airways Corporation ( JBLU ) following the Amtrak train crash in May have further added to the gloom for the airline industry.
Not All Doom and Gloom
However, it has not been all bad news for the industry over the past few months. At its annual meeting, the International Air Transport Association (IATA) predicted that the airline industry will continue to see good times through 2015, thanks to weak oil prices. The IATA increased its projection for 2015 global net profit for the industry to $29.3 billion from the earlier projection of $25 billion. In comparison, the 2014 figure was $16.4 billion.
The bulk of the global profits ($15.7 billion) is expected to come 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 expected to decline 0.7% to $727 billion mainly due to the strength of the U.S. dollar.
The IATA suggests that demand for passenger travel will improve in 2015 from 2014 levels, thanks to an improving economy. According to the forecast, 2015 is expected to see air travel growth of 6.7% compared with 6% growth witnessed last year. Moreover, projected air travel growth is higher than the trend witnessed in the last two decades, according to the IATA report.
Capacity is projected to increase by 6.2% in 2015 as opposed to 5.8% in 2014. Customers, on the other hand, 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%. Although it is a fact that most carriers hedge at least some of their fuel costs, the majority of them should still continue to benefit considerably from the plunge in oil prices. Notably, carriers use a combination of calls, swaps and collars at varying WTI crude-equivalent price levels to hedge fuel costs.
Moreover, according to the IATA forecast, cargo is expected to witness the strongest growth this year since 2010. According to the IATA report, year 2015 will see commercial airline companies taking delivery of more than 1,700 new aircraft. This requires substantial investment, projected to reach approximately $180 billion.
Buoyed by their sound financial health, several carriers have voiced their intentions to invest heavily toward upgrading overall facilities associated with customer satisfaction. This is likely to result in greater travel demand, improved goodwill and eventually, a higher top line.
Positive A4A Forecast
According to a forecast released by Airlines for America ("A4A") - the largest airline trade association in the U.S. - the ongoing summer season (Jun 1-Aug 31) will be one of the busiest of all times for American carriers in terms of air travel. An improving U.S. economy, strong recovery in the labor market and low fuel cost is expected to drive passenger volumes this summer to an all-time high. Moreover, the projected total volume (222 million) is 4.5% higher than the year-ago figure.
The busy summer travel schedule is mainly a reflection of the record-high levels of international travel expected by the trade organization. A4A has predicted that approximately 31 million passengers will fly abroad on U.S. airlines during the period, again an all-time record. The top 5 international destinations from the country appear to be Canada, Mexico, the United Kingdom, Germany and Japan.
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 for the airline industry is currently #116, indicating the group's near-term Neutral outlook.
Earnings Trends
The airline industry falls under the broader transportation sector. The major airline companies have already revealed their second quarter 2015 numbers. Low fuel costs have helped majority of them come up with better-than-expected earnings, however the top line growth has been dismal.
In the transportation sector 38.5% companies have reported earnings. Total earnings for these companies are up 7.4% on only 0.4% higher revenues, with 40% of the companies beating earnings estimates and 20% coming ahead of revenue expectations.
For 2015, the sector's earnings are poised to expand around 20.3%.For more details about earnings for this sector and others, please read our Zacks Earning Trends report.
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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.
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American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and Southwest Airlines have confirmed the receipt of written communication from the DOJ seeking information. 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. Another major event that sent airline stocks crashing was the news of a probe by the Department of Justice (DOJ), on the possibility of unlawful coordination by some carriers to limit the availability of seats, with the objective of keeping airfares high.
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American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and Southwest Airlines have confirmed the receipt of written communication from the DOJ seeking information. 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 IATA increased its projection for 2015 global net profit for the industry to $29.3 billion from the earlier projection of $25 billion.
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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. American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and Southwest Airlines have confirmed the receipt of written communication from the DOJ seeking information. Furthermore, the recent reports that the U.S. Transportation Department is investigating the possible price gouging by major U.S. carriers such as Delta, Southwest, American Airlines and JetBlue Airways Corporation ( JBLU ) following the Amtrak train crash in May have further added to the gloom for the airline industry.
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American Airlines Group ( AAL ), Delta Air Lines ( DAL ), United Continental Holdings ( UAL ) and Southwest Airlines have confirmed the receipt of written communication from the DOJ seeking information. 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. Moreover, projected air travel growth is higher than the trend witnessed in the last two decades, according to the IATA report.
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