North and South American airline stocks soared higher on Thursday (22-Jul-2010), after another day of improved financial results from carriers, including JetBlue, Continental Airlines and Alaska Air. Shares were also boosted by gains in the wider market, with the Dow (+2.0%) advancing on further better-than-expected earnings.
The surge was despite a 3.6% rise in oil prices for the day, to USD79.30. The AMEX Airline Index gained 4.3% for the day.
JetBlue provides optimistic outlook
JetBlue (+8.5%) was the day’s biggest gainer after reporting a net profit of USD30 million for 2Q2010, compared to a profit of USD20 million in the previous corresponding period.
The carrier issued an positive outlook for the remainder of the year. For the 3Q2010, PRASM is expected to increase between 12-15% year-on-year, while RASM is expected to increase between 11-14%. In comparison, CASM is expected to increase between 3-5%. Excluding fuel, CASM in the third quarter is expected to increase between 2-4%.
For the full year, PRASM for the full year is expected to increase between 9-12% year-on-year, while RASM is expected to increase between 8-11%. CASM is expected to increase between 6-8%. Excluding fuel, CASM in 2010 is expected to increase between 4-6%.
Capacity is expected to increase between 6-8% in the third quarter and for the full year.
See related report: JetBlue’s 2Q2010 net rises to USD30 million - but expanding too rapidly?
See related CAPA Profile: Financial Results
Continental Airlines net profit on the up
Continental Airlines (+3.7%) also reported improved earnings during trading, with a net profit of USD233 million for 2Q2010, compared to a loss of USD213 million in the previous corresponding period. Its per share result of USD1.46 diluted earnings, or USD1.60 per share excluding merger-related costs and other special charges, beat average analyst expectations of USD1.51, according to Thomson Reuters.
Operating profit also rose for the period, totalling USD328 million, compared to a loss of USD154 million in the previous corresponding period.
See related report: Continental Airlines reports 19% increase in 2Q2010 net profit
Alaska Air and UPS also benefit from earnings results
Alaska Air (+2.8%) also beat analyst expectations, reporting a net profit of USD58.6 million for 2Q2010, or USD1.60 per share, compared to a net profit of USD29.1 million (USD0.79 per share) in the previous corresponding period.
Net income excluding special items was USD84.0 million, or USD2.29 per diluted share, compared to USD26.5 million, or USD0.72 per share, in the second quarter of 2009. This compared to a First Call mean estimate of USD2.12 per share.
UPS raises guidance
UPS (+5.2%) meanwhile announced diluted earnings per share of USD0.84 for 2Q2010, a 71% year-on-year jump over the adjusted earnings. Global revenue increased 13%, generating a 57% increase in operating profit to USD1.4 billion. On a reported basis, diluted earnings per share increased 91% over the USD0.44 in the second quarter of 2009.
Based on expectations of continued momentum in every segment, UPS has increased its guidance for 2010 adjusted earnings to a range of USD3.35-3.45 per diluted share, a 45-50% increase year-on-year.
See related CAPA Profile: Outlook, Forecasts, Guidance
Elsewhere, AirTran (-1.3%) and Allegiant (-0.7%) were the only two carriers to end trading lower, following disappointing results released the day prior.
North & South America selected airlines daily share price movements (% change) 22-Jul-2010