Allegiant (ALGT) Stock Up 3% On Q4 Earnings & Revenue Beat

Allegiant Travel Company (NASDAQ:ALGT) delivered impressive fourth-quarter 2018 results, with earnings and revenues beating the Zacks Consensus Estimate.

The impressive quarterly performance has boosted investors’ optimism on the stock. As a result, shares of the company have moved up 3.4% during after-hours trading on Jan 30.

The transportation company’s earnings of $2.56 per share outpaced the Zacks Consensus Estimate of $2.49. However, the bottom line declined year over year due to high costs.

Total operating revenues increased 8.7% year over year to $412.1 million and surpassed the consensus mark of $409.1 million. Moreover, the top line was primarily driven by a 10.1% rise in passenger revenues.

Systemwide air traffic (measured in revenue passenger miles: RPMs) in the quarter under review rose 4.8% and capacity (measured in available seat miles: ASMs) increased 5.1% year over year. Consequently, load factor (percentage of seats filled by passengers) was 80.4%, down 20 basis points, as capacity expansion outweighed traffic growth.

Operating cost per available seat miles (CASM) excluding fuel fell 10.1%. Nevertheless, total scheduled service revenue per available seat miles (TRASM) improved 4.4% to 11.29 cents. Average fuel cost per gallon (scheduled) increased 15.3% to $2.33 in the quarter.

For 2018, Allegiant rewarded shareholders with cash dividend worth $45.2 million. Furthermore, the board of directors has cleared a dividend of 70 cents per share, which is payable on Mar 14, 2019 to shareholders of record as of Mar 1. Moreover, fuel cost per gallon increased 27% in 2018.

Quarterly Outlook

For the first quarter, scheduled and system ASMs are expected to increase between 4% and 6%. Among the four quarters, the company predicts ASM growth to be lowest in the first quarter.

Notably, Allegiant expects ASM growth to be highest in the second quarter due to shift in timings of the Easter.

2019 Outlook

The company expects fuel cost per gallon of $2.10. Additionally, effective tax rate is now anticipated between 24% and 25%. Further, projection for capital expenditures is expected to be approximately $530 million. System capacity is likely to increase 7-9%.

This Zacks Rank #2 (Buy) company expects earnings per share in the range of $13.25-$14.75 for the current year. The Zacks Consensus Estimate for 2019 bottom line is pegged at $12.94.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Investors interested in the Zacks Transportation Sector are keenly awaiting fourth-quarter 2018 earnings reports from key players like Air Lease Corporation (NYSE:AL) , Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) and Old Dominion Freight Line, Inc. (NASDAQ:ODFL) . While Old Dominion is scheduled to report fourth-quarter earnings on Feb 7, Atlas Air Worldwide and Air Lease will release the same on Feb 19 and Feb 21, respectively.

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