Allegiant Travel (ALGT) Q2 Earnings: What's In The Cards?

Allegiant Travel Company (NASDAQ:ALGT) , the parent company of Allegiant Air, is scheduled to report second-quarter 2016 results on Jul 29.

The company has an impressive track record with respect to earnings, having outshined the Zacks Consensus Estimate in three of the last four quarters. The average earnings beat is 2.35%.

Factors at Play

Allegiant Travel did not have satisfactory operations in June owing to a number of cancellations and refund issues. For the second quarter, the company expects Total Revenue per Available Seat Mile (TRASM) to decline in the range of 9.2% to 9.6%. Allegiant Travel has been suffering due to the slump in the airline industry which followed a series of terror attacks and economic slowdown. Major airlines such as Southwest Airlines Co. (NYSE:LUV) and American Airlines Group Inc. (NASDAQ:AAL) have been struggling to boost the top line. Meanwhile, rising competition has been a pressing concern.

The company, however, posted traffic growth in the month of June. The company also chalked out a tentative pilot agreement recently which, if approved, should help maintain operational efficiency at the company.

ALLEGIANT TRAVL Price and EPS Surprise

ALLEGIANT TRAVL Price and EPS Surprise | ALLEGIANT TRAVL Quote

Earnings Whispers

Our proven model does not conclusively show that Allegiant Travel is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Zacks ESP: Allegiant Travel has an earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at $3.54.

Zacks Rank: Allegiant Travel has a Zacks Rank #5 (Strong Sell). Please note that we caution against Sell-rated stocks (#4 or 5) going into an earnings announcement,

Stocks to Consider

Here is a transport company you may want to consider as our model shows it has the right combination of elements to post an earnings beat this quarter.

LATAM Airlines Group S.A. (NYSE:LFL) has an earnings ESP of over +100% and a Zacks Rank #2. The company is scheduled to release second-quarter results on Aug 11.