Allegiant Travel Company quarterly results beat estimates

Dino D'Amore
By Dino D'Amore January 29, 2015 21:28

Allegiant Travel Company quarterly results beat estimates

Allegiant Travel Company has reported $1.83 earnings per share (EPS) for the quarter, beating the Thomson Reuters consensus estimate of $1.37 by $0.46.  The company’s quarterly revenue was up 17.0% on a year-over-year basis to $279 million – consensus estimates were $271.54 million. For the full year, 12 months to December 31, 2014, Allegiant’s revenues rose 14.1% to $1.137bn.

For the full year, total operating expense per ASM (CASM) increased 6%percent year over year. The airline company stated that CASM excluding fuel was “substantially impacted by nonrecurring expenses related to training and crew availability delays. These delays drove an additional $25 million in incremental expense in the form of labour inefficiencies, aircraft sub-service, and crew training and displacement costs”. Allegiant also incurred $7.3 million in accelerated compensation expense related to the departure of its former President and COO, Andrew Levy as well as $43.3 million non-cash impairment charge related to its Boeing 757 fleet. Excluding the effect of these nonrecurring items, full year 2014 CASM ex fuel would have increased by approximately 2.9% compared to the prior year

Fourth quarter fuel expense decreased 12% driven by a 19.9% decrease in price per gallon which was offset by a 9.6% increase in gallons consumed.

Fourth quarter salary and benefits expense increased 19.7% versus the prior year primarily due to a 16.8% increase in full time equivalent (FTE) employees.

Fourth quarter maintenance and repairs expense increased 38.3% due to an 11.6% increase in average number of aircraft in service and a higher number of heavy maintenance and engine overhaul events versus the prior year

Fourth quarter aircraft lease expense decreased 44.9% driven by the purchase of two operating leased aircraft in the current year and the reduced reliance on sub-service lift for scheduled service operations.

“We are very proud to report our 48th consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “Excluding the one-time charge related to the write down of our 757 fleet, full year operating margin increased again, for the third year in a row in spite of a number of operational challenges. Looking forward, we see better execution in 2015.  I’m pleased to announce, our Board of Directors approved a recurring $0.25 per share dividend to supplement our ongoing stock repurchase program. Allegiant’s strong financial results and positive outlook reaffirms our commitment to reinvest in the business, grow our network and our people while returning value to our shareholders. I want to acknowledge all of the hard work from our Team Members this past year as we look forward to a successful 2015.”

Dino D'Amore
By Dino D'Amore January 29, 2015 21:28