Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Spirit Airlines, Inc. Stock Is Hitting Turbulence Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of discount airline Spirit Airlines (NASDAQ: SAVE  ) are losing altitude today by almost 6% following release of its fiscal-first-quarter results.

So what: Revenue jumped 18.2% to $438 million, a hair higher than analyst expectations of $437.9 million. Adjusted net income leaped 15.4% to $37.8 million, or $0.52 per share, also a hair higher than analyst expectations for $0.51 per share. Revenue and presumably net income would have been higher if not for the 256 weather-related flight cancellations during the quarter, compared to just 59 cancellations last year.

Where Spirit Airlines seems to have come up short is on the revenue and costs per available seat mile. Revenue per available seat mile declined 2.4% to $0.11 while at the same time adjusted cost per available seat mile rose very slightly to $0.06 cents.

"Average stage length" and the calendar shift of the Easter holiday were blamed for the revenue per available seat mile decline while "increased number of scheduled maintenance events" were blamed on the lack of an associated decline in costs.

Now what: Ben Baldanza, CEO of Spirit Airlines, was pleased with the quarter given the number of challenges that the severe winter storms caused. He believes that the quarter "provides a firm foundation" as Spirit Airlines grows its business for the remainder of the year. Most likely, the challenges associated with severe weather are over.  

Based on analyst estimates, Spirit Airlines trades at a forward P/E of 19 based upon current share price and estimated EPS of $2.92 for the year ending December 2014, which appears to be a bit pricey compared to many other major and regional airlines.

This could lead to cheaper flights yet higher profits
Record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, the Motley Fool is offering a look at three energy companies using a small IRS "loophole" to help line investor pockets. Learn this strategy, and the energy companies taking advantage, in our special report "The IRS Is Daring You To Make This Energy Investment." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 29, 2014, at 7:07 PM, sharkflyt wrote:

    Spirit Airlines stock is very cheap right now and even with a little loss in revenue per seat mile it will change as the new aircraft arrive. So get ready to make money ...Buy now!

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2935340, ~/Articles/ArticleHandler.aspx, 8/29/2015 1:21:37 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Nickey Friedman

Nickey is a select freelancer for the Fool. She writes about food & beverage, dry bulk shipping, and whatever else floats her boat. After selling four successful restaurants, she turned in her knives for a pen and now puts her passion for food, hospitality, and transportation in writing. You can send email to her at

Today's Market

updated 16 hours ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:00 PM
SAVE $50.64 Down -0.51 -1.00%
Spirit Airlines CAPS Rating: ****