Investors in SkyWest, Inc. (SKYW) need to pay close attention to the stock based on moves in the options market lately. That is because the Oct 18, 2024 $30.00 Call had some of the highest implied volatility of all equity options today. What is Implied Volatility? Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also ...

SkyWest's (SKYW) top line is boosted by an uptick in air travel demand. The company's proactive measures to expand and upgrade its fleet are commendable. Shareholder-friendly actions also bode well for SkyWest. However, high operating expenses are a major headwind. Factors Favoring SKYW SKYW is being well-served by the increase in flight volume and passenger loads, which is boosting charter revenues. Currently, SkyWest operates 16 aircraft at SkyWest Charter or SWC and anticipates robust expansion in on-dem ...

Operating Expenses | --- | --- | --- | --- | |-------------------------------------------------|-------------------|-----------------------|-------------------| | Aircraft in Service or Under Contract | June 30, 2024 | December 31, 2023 | June 30, 2023 | | E175s | 248 | 237 | 235 | | CRJ900s | 41 | 41 | 41 | | CRJ700s | 99 | 118 | 110 | | CRJ200s | 87 | 89 | 106 | | Total | 475 | 485 | 492 | Our significant accounting policies are summarized in Note 1 to our consolidated financial statements for the year en ...

SkyWest, Inc. (NASDAQ:SKYW) Q2 2024 Earnings Conference Call July 25, 2024 4:30 PM ET Company Participants Rob Simmons - Chief Financial Officer Eric Woodward - Chief Accounting Officer Chip Childs - President & Chief Executive Officer Wade Steel - Chief Commercial Officer Conference Call Participants Savi Syth - Raymond James Mike Linenberg - Deutsche Bank Duane Pfennigwerth - Evercore ISI Tom Fitzgerald - TD Cowen Operator Thank you for standing by. My name is JL [ph] and I will be your conference operato ...

[Q2 2024 Executive Summary](index=1&type=section&id=Executive%20Summary) SkyWest, Inc. reported strong financial and operational performance in Q2 2024, with significant increases in net income, revenue, and block hour production [Financial Highlights](index=1&type=section&id=Financial%20Highlights) SkyWest, Inc. reported a significant increase in net income and revenue for Q2 2024 compared to Q2 2023, driven by improved operational performance and block hour production Q2 2024 Financial Performance vs. Q2 2023 | Metric | Q2 2024 ($ millions) | Q2 2023 ($ millions) | Change (%) | | :----------------- | :------------------- | :------------------- | :--------- | | Pre-tax Income | $102 | N/A | N/A | | Net Income | $76 | $15 | 406.7% | | Diluted EPS | $1.82 | $0.35 | 420.0% | | Revenue | $867 | $726 | 19% | [Operational Highlights](index=1&type=section&id=Operational%20Highlights) Operational improvements in Q2 2024 included a notable increase in block hour production and the delivery of new E175 aircraft, reflecting progress in captain availability - Block hour production increased **12% in Q2 2024** compared to Q2 2023, indicating improved captain availability[1](index=1&type=chunk)[21](index=21&type=chunk) - SkyWest took delivery of **eight E175 partner-financed aircraft** under an agreement with United Airlines[1](index=1&type=chunk) [Financial Review](index=1&type=section&id=Financial%20Review) The financial review details SkyWest's income statement, revenue, expenses, and capital position, highlighting significant growth in net income and operating revenues [Condensed Consolidated Statements of Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) The condensed consolidated statements of income (loss) show a substantial increase in net income for both the three and six months ended June 30, 2024, compared to the prior year periods, driven by higher operating revenues Condensed Consolidated Statements of Income (Loss) | Metric | Three Months Ended June 30, 2024 ($ thousands) | Three Months Ended June 30, 2023 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | Six Months Ended June 30, 2023 ($ thousands) | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Total Operating Revenues | $867,118 | $725,643 | $1,670,732 | $1,417,474 | | Total Operating Expenses | $747,478 | $693,783 | $1,451,586 | $1,390,318 | | Operating Income | $119,640 | $31,860 | $219,146 | $27,156 | | Income (Loss) Before Income Taxes | $102,166 | $17,637 | $182,341 | $(8,480) | | Net Income (Loss) | $75,578 | $15,419 | $135,876 | $(6,652) | | Basic Earnings (Loss) Per Share | $1.88 | $0.35 | $3.38 | $(0.14) | | Diluted Earnings (Loss) Per Share | $1.82 | $0.35 | $3.28 | $(0.14) | [Operating Revenues](index=1&type=section&id=Operating%20Revenues) Total operating revenues increased by 19% in Q2 2024, primarily driven by flying agreements and the recognition of previously deferred revenue Operating Revenues (Q2 2024 vs. Q2 2023) | Revenue Type | Q2 2024 ($ thousands) | Q2 2023 ($ thousands) | Change ($ thousands) | Change (%) | | :------------------------ | :-------------------- | :-------------------- | :------------------- | :--------- | | Flying agreements | 838,170 | 700,394 | 137,776 | 19.7% | | Lease, airport services & other | 28,948 | 25,249 | 3,699 | 14.6% | | **Total Operating Revenues** | **867,118** | **725,643** | **141,475** | **19.5%** | - SkyWest recognized **$6 million of previously deferred revenue** in Q2 2024, contrasting with deferring $60 million in Q2 2023, with cumulative deferred revenue at **$361 million** as of June 30, 2024[11](index=11&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Operating expenses increased by 8% in Q2 2024, primarily due to the 12% increase in block hour production year-over-year, with salaries, wages, and benefits being the largest component Operating Expenses (Q2 2024 vs. Q2 2023) | Expense Category | Q2 2024 ($ thousands) | Q2 2023 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------------- | :-------------------- | :-------------------- | :------------------- | :--------- | | Salaries, wages and benefits | 355,005 | 322,441 | 32,564 | 10.1% | | Aircraft maintenance, materials and repairs | 183,267 | 162,491 | 20,776 | 12.8% | | Depreciation and amortization | 96,814 | 97,169 | (355) | (0.4%) | | Aircraft fuel | 21,328 | 18,279 | 3,049 | 16.7% | | Airport-related expenses | 17,535 | 16,955 | 580 | 3.4% | | Aircraft rentals | 1,310 | 2,428 | (1,118) | (46.0%) | | Other operating expenses | 72,219 | 74,020 | (1,801) | (2.4%) | | **Total Operating Expenses** | **747,478** | **693,783** | **53,695** | **7.7%** | - The **8% increase in operating expenses** was primarily driven by a **12% increase in block hour production** year-over-year[5](index=5&type=chunk) [Capital and Liquidity](index=2&type=section&id=Capital%20and%20Liquidity) SkyWest maintained a strong liquidity position with stable cash and marketable securities, while reducing total debt. The company also continued its share repurchase program [Summary of Consolidated Balance Sheets](index=5&type=section&id=Summary%20of%20Consolidated%20Balance%20Sheets) The balance sheet shows a slight decrease in total assets and a reduction in total debt from December 31, 2023, to June 30, 2024, while stockholders' equity increased Summary of Consolidated Balance Sheets (Dollars in Thousands) | Metric | June 30, 2024 ($ thousands) | December 31, 2023 ($ thousands) | | :------------------------------------ | :-------------------------- | :------------------------------ | | Cash and marketable securities | $834,269 | $835,223 | | Total current assets | $1,115,156 | $1,131,896 | | Property and equipment, net | $5,357,468 | $5,405,685 | | Total assets | $6,962,439 | $7,026,293 | | Current portion, long-term debt | $497,744 | $443,869 | | Total current liabilities | $1,323,928 | $1,254,292 | | Long-term debt, net of current maturities | $2,284,375 | $2,562,183 | | Total liabilities and stockholders' equity | $6,962,439 | $7,026,293 | | Stockholders' equity | $2,231,180 | $2,113,502 | [Debt and Cash Position](index=2&type=section&id=Debt%20and%20Cash%20Position) SkyWest's total debt decreased by $200 million, while cash and marketable securities remained stable at approximately $834 million Debt and Cash Position | Metric | June 30, 2024 ($ billions) | December 31, 2023 ($ billions) | | :-------------------------- | :------------------------- | :----------------------------- | | Total Debt | $2.8 | $3.0 | | Cash and marketable securities | $834 million | $835 million | [Share Repurchase Program](index=2&type=section&id=Share%20Repurchase%20Program) SkyWest repurchased 177,000 shares of common stock for $13.3 million during Q2 2024, with $69 million remaining under the current authorization - SkyWest repurchased **177,000 shares of common stock** for **$13.3 million** in Q2 2024, at an average price of **$75.23 per share**[24](index=24&type=chunk) - As of June 30, 2024, **$69 million remained available** under the current share repurchase program[24](index=24&type=chunk) [Operational Review](index=1&type=section&id=Operational%20Review) The operational review details SkyWest's commercial agreements, fleet composition, and key performance metrics, highlighting fleet deliveries and increased block hours [Commercial Agreements and Fleet Deliveries](index=1&type=section&id=Commercial%20Agreements%20and%20Fleet%20Deliveries) SkyWest is actively managing its fleet deliveries, particularly E175 aircraft, under existing agreements with major airline partners, with significant deliveries scheduled through 2026 - SkyWest took delivery of **eight E175 partner-financed aircraft** in Q2 2024 as part of a United Airlines agreement[1](index=1&type=chunk) Anticipated E175 Aircraft Deliveries | Partner | Q1 & Q2 2024 | Q3 & Q4 2024 | 2025 | 2026 | Total | | :---------------- | :----------- | :----------- | :--- | :--- | :---- | | Delta Air Lines | — | 1 | — | — | 1 | | United Airlines (1) | 11 | 13 | 7 | 8 | 39 | | Alaska Airlines | — | — | 1 | — | 1 | | **Total** | **11** | **14** | **8** | **8** | **41** | - By the end of 2026, SkyWest is scheduled to operate a total of **278 E175 aircraft**[25](index=25&type=chunk) [Fleet Composition](index=2&type=section&id=Fleet%20Composition) SkyWest's fleet in service or under contract primarily consists of E175, CRJ900, CRJ700, and CRJ200 aircraft, with a total of 475 aircraft as of June 30, 2024, showing a slight decrease from previous periods Aircraft in Service or Under Contract by Type | Aircraft Type | June 30, 2024 | December 31, 2023 | June 30, 2023 | | :------------ | :------------ | :---------------- | :------------ | | E175 aircraft | 248 | 237 | 235 | | CRJ900 aircraft | 41 | 41 | 41 | | CRJ700 aircraft | 99 | 118 | 110 | | CRJ200 aircraft | 87 | 89 | 106 | | **Total** | **475** | **485** | **492** | - As of June 30, 2024, SkyWest leased **35 CRJ700s and five CRJ900s to third parties** and had **16 CRJ200s ready for service** under SkyWest Charter (SWC) operations, which are excluded from the main fleet count[34](index=34&type=chunk) [Key Operational Metrics](index=1&type=section&id=Key%20Operational%20Metrics) SkyWest demonstrated strong operational performance in Q2 2024, with increases in block hours, departures, and passengers carried, alongside high flight completion rates Selected Operational Data (Q2 2024 vs. Q2 2023) | Metric | Q2 2024 | Q2 2023 | Change (%) | | :------------------------- | :----------- | :----------- | :--------- | | Total block hours | 317,462 | 282,617 | 12.3% | | Departures | 189,325 | 173,837 | 8.9% | | Passengers carried | 10,691,017 | 9,887,779 | 8.1% | | Adjusted flight completion | 99.9% | 99.9% | — pts | | Raw flight completion | 99.0% | 98.9% | 0.1 pts | | Passenger load factor | 84.4% | 85.5% | (1.1) pts | | Average trip length | 460 | 451 | 2.0% | - Adjusted flight completion percent excludes weather cancellations, while raw flight completion includes them[20](index=20&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) This section provides an overview of SkyWest's corporate structure, operational scope, and details regarding its Q2 2024 earnings conference call [About SkyWest](index=2&type=section&id=About%20SkyWest) SkyWest, Inc. is a holding company for SkyWest Airlines, SkyWest Charter, and SkyWest Leasing, operating a fleet of approximately 500 aircraft and partnering with major airlines across North America - SkyWest, Inc. is the holding company for SkyWest Airlines, SkyWest Charter ("SWC"), and SkyWest Leasing[26](index=26&type=chunk) - SkyWest Airlines operates a fleet of approximately **500 aircraft**, connecting passengers to over **240 destinations** throughout North America[26](index=26&type=chunk) - SkyWest Airlines operates through partnerships with United Airlines, Delta Air Lines, American Airlines, and Alaska Airlines, carrying over **38 million passengers in 2023**[26](index=26&type=chunk) [Conference Call Details](index=2&type=section&id=Conference%20Call%20Details) SkyWest hosted a conference call on July 25, 2024, to discuss its Q2 2024 results, with details provided for both domestic and international callers, as well as a live webcast - SkyWest hosted its Q2 2024 results conference call on **July 25, 2024, at 2:30 p.m. Mountain Time**[14](index=14&type=chunk) - Domestic callers could dial **1-888-330-2455**, and international callers **1-240-789-2717**; a live webcast was also available at https://events.q4inc.com/attendee/662090633[14](index=14&type=chunk)[28](index=28&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section outlines the standard disclaimer regarding forward-looking statements, emphasizing potential risks and the company's policy on updates [Forward-Looking Statements Disclaimer](index=3&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section contains a standard disclaimer regarding forward-looking statements, highlighting that actual results may differ materially due to various risks and uncertainties, and the company assumes no obligation to update these statements - The release contains forward-looking statements identified by words such as "forecasts," "expects," "intends," "believes," "anticipates," "estimates," "should," "likely" and similar expressions[29](index=29&type=chunk) - Readers are cautioned that many factors could affect future operating and financial results, causing actual results to vary materially from those expressed in forward-looking statements[29](index=29&type=chunk) - SkyWest assumes no obligation to update any forward-looking statements unless required by law, and directs readers to its SEC filings for a comprehensive list of risk factors[29](index=29&type=chunk)

The Zacks Consensus Estimate for the to-be-reported quarter's earnings and revenues is pegged at $1.73 per share and $814.40 million, respectively. SKYW has an awe-inspiring earnings surprise history, as reflected in the chart below. Earnings Whispers for Q2 SKYW has an Earnings ESP of +0.96% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here. We expect revenues from flying agreements (which account for the bulk of the top line) to have been impressive in the to-be-repor ...

Company Performance - SkyWest's shares increased by 3.39% over the last month, underperforming the Transportation sector's gain of 4.01% and outperforming the S&P 500's gain of 2.14% [1] - SkyWest is currently traded at a Forward P/E ratio of 12.33, indicating a premium compared to its industry's Forward P/E of 9.25 [5] - The company is scheduled to release its earnings on July 25, 2024, with a forecasted EPS of $1.73, reflecting a 394.29% increase from the same quarter last year [6] Earnings Estimates - The Zacks Consensus Estimates project earnings of $6.83 per share and revenue of $3.36 billion for the full year, showing changes of +787.01% and +14.58% respectively from the previous year [4] - The Zacks Consensus Estimate for revenue is projecting net sales of $814.4 million, up 12.23% from the year-ago period [6] - The Zacks Rank system indicates that SkyWest currently holds a Zacks Rank of 2 (Buy) [7] Industry Context - The Transportation - Airline industry ranks in the bottom 40% of all industries, with a current Zacks Industry Rank of 153 out of over 250 industries [11] - The Zacks Industry Rank shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [3]

The airline industry is a crowded place. Finding winners in this space is easier said than done. Southwest Airlines (LUV) has been one of my favorites in this space for many years, but unfortunately, my investment in LUV has not gone according to plans, so far. While analyzing the prospects for the airline sector, I recently came across SkyWest, Inc. (NASDAQ:SKYW), a regional airline operator that draws little attention from both investors and consumers. SKYW stock, up more than 108% in the past 12 months, ...

The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate. As such, the Zacks rating upgrade for SkyWest is essentially a positive comment on its earnings outlook that could have a favorable impact on its stock price. The change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to ...

Core Insights - The airline industry is experiencing a significant rebound in air travel demand, particularly in leisure travel, which is positively impacting stock performance [11] - The International Air Transport Association (IATA) has revised its global profitability forecast for the airline industry, increasing it to $30.5 billion for the current year, up from $25.7 billion [12] Company-Specific Insights - United Airlines (UAL) has seen a 0.2% upward revision in the Zacks Consensus Estimate for 2024 earnings over the past 60 days, with a 0.4% upward revision for 2025 earnings [1] - Alaska Air (ALK) has experienced a 2% upward revision in the Zacks Consensus Estimate for 2024 earnings and a 5.1% upward revision for 2025 earnings over the same period [4] - SkyWest (SKYW) has a Zacks Rank 2 (Buy) and has seen a 6.9% improvement in the 2024 earnings estimate over the past 90 days, with an expected earnings growth rate of more than 100% for 2024 [7][10] Market Trends - Passenger traffic is expected to remain high throughout the year, with U.S. airlines anticipated to carry 271 million passengers from June 1 to August 31, 2024 [8] - The airline industry is expected to perform strongly in the latter half of 2024, driven by high passenger volumes and favorable earnings estimate revisions [9][11]