Hawaiian Holdings (HA) Q2 Earnings Beat, Q3 RASM View Dull

Hawaiian Holdings, Inc.’s (NASDAQ:HA) second-quarter 2019 earnings (excluding 2 cents from non-recurring items) of $1.23 per share outpaced the Zacks Consensus Estimate of $1.04. However, the bottom line declined 14.6% year over year. Although quarterly revenues of $712.2 million surpassed the Zacks Consensus Estimate of $707.5 million, it dipped marginally year over year.

Passenger revenues accounting for bulk (91.7%) of the top line slipped 0.3% year over year. Airline traffic, measured in revenue passenger miles, inched up 3.6% year over year to 4.49 billion in the quarter under review. Capacity or available seat miles (ASMs) expanded 2.7% to 5.15 billion. Load factor (percentage of seats filled by passengers) improved 80 basis points to 87.1% in the reported quarter as traffic growth outpaced capacity expansion.

Meanwhile, operating revenue per available seat mile (RASM: a key measure of unit revenue) in the quarter slid 3.1% year over year. Average fuel cost per gallon rose 3.4% to $2.14 in the second quarter while non-fuel unit costs inched up 0.3%.

During the quarter, Hawaiian Holdings returned $25.3 million to shareholders through $5.7 million in dividends and $19.6 million in buybacks.

Liquidity

As of Jun 30, 2019, this Zacks Rank #2 (Buy) company’s unrestricted cash, cash equivalents and short-term investments totaled $539 million. While outstanding debt and capital lease obligations were $565 million during the same time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dividend Update

On Jul 19, the company’s board cleared a quarterly cash dividend of 12 cents per share, payable Aug 30 to shareholders of record as of Aug 16.

Q3 & 2019 Outlook

The company anticipates capacity to decrease up to 1.5% or increase up to 0.5% in the third quarter. RASM is projected to decline 1.5-4.5% in the current quarter. Non-fuel unit costs are expected to ascend 3.5-6.5% in the ongoing quarter. Economic fuel costs are envisioned to be $2.11 per gallon in the same period.

Capacity for the full year is expected to rise in the 1.5-2.5% band. Non-fuel unit costs are predicted to increase 1-2.5% in the current year. Additionally, fuel costs are estimated at $2.07 per gallon in 2019.

Upcoming Releases

Investors interested in the broader Transportation sector are keenly awaiting second-quarter earnings reports from key players, namely Expeditors International of Washington, Inc. (NASDAQ:EXPD) , Air Lease Corporation (NYSE:AL) and Hertz Global Holdings, Inc (NYSE:HTZ) . While Expeditors and Hertz will report earnings figures on Aug 6, Air Lease will announce the same on Aug 8.

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