What to Expect from Spirit Airlines’ Q1 Results

Sushree Mohanty - Author

May 6 2020, Published 10:46 a.m. ET

Spirit Airlines (NASDAQ:SAVE) will likely report its results for the first quarter of fiscal 2020 on May 7 when the market opens. Analysts expect the company to report lower revenues and higher losses like all of the other airlines in the sector for the first quarter. The airline industry has struggled since the COVID-19 pandemic started. JetBlue Airways will also report its first-quarter results tomorrow. Spirit Airlines stock has fallen 69.4% year-to-date. Let’s take a look at what analysts expect from the first quarter.

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What do analysts expect from Spirit Airlines?

Analysts expect Spirit Airlines to report a 5.3% YoY (year-over-year) decline in its revenue to $810 million in the first quarter. Sequentially, the revenue could also be lower from $969.8 million in the fourth quarter of fiscal 2019. Spirit Airlines’ revenue decline in the second quarter could be lower at $188.4 million. However, the revenues could continue to fall in the third and fourth quarter to $476.7 million and $681.8 million, respectively.

For the first quarter, analysts expect Spirit Airlines’ loss to be around $0.62 per share compared to a profit of $0.84 in the first quarter of fiscal 2019. The company also reported a profit of $1.24 in the fourth quarter of fiscal 2019. The losses could rise to $3.31 in the second quarter and slowly decline to $1.41 towards the third quarter. Analysts expect Spirit Airlines to only make a profit of $0.30 per share from the fourth quarter of fiscal 2020.

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Recently, United Airlines (NYSE:UAL) and American Airlines (NASDAQ:AAL) also reported their first-quarter results. United Airlines posted revenues of $7.9 billion and a loss of $2.57 per share. Meanwhile, American Airlines reported a 19.5% YoY decline in its revenue to $8.5 billion and a loss of $2.65 per share in the first quarter of fiscal 2020.

Analysts’ recommendations

Currently, 14 analysts cover Spirit Airlines stock. Among the analysts, one recommends a “strong-buy,” five recommend a “buy,” six recommend a “hold,” and two recommend a “sell.” The average target price on the stock is $20.58. The target price represents an upside potential of 67% from the last closing price. The stock closed 4.5% lower at $12.31 on May 5. In April, Spirit Airlines stock gained 16.5%, while JetBlue stock gained 8.8%. United Airlines and American Airlines lost 6.2% and 1.4%, respectively.

Boeing (NYSE:BA) CEO David Calhoun thinks that it could take at least two to three years for travel to return to 2019 levels. Boeing also reported higher losses of $1.7 per share in the first quarter. To learn more, read Boeing’s Q1 Losses Trigger Job Cuts amid COVID-19. Even when the pandemic ends, will customers’ need to travel be the same? Fear about the virus could put pressure on consumers’ travel plans, which could impact long-term industry growth. To add to investors’ concerns, Warren Buffett sold Berkshire Hataway’s stake in airline stocks. To learn more, read Warren Buffett: Airline Stocks Were Finally a ‘Death Trap.’ For now, airline stocks are a “hold” until we get a better picture of the industry after the pandemic.

Stay with us to learn how Spirit Airlines performed in the first quarter.


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