Market Overview - The market received a boost from Fed Chair Jerome Powell's Jackson Hole speech, indicating potential rate cuts as early as September, leading to a 1.5% rally in the S&P 500 [1][10] - Powell's acknowledgment of persistent inflation, coupled with a focus on job growth, reassured investors about the Fed's readiness to intervene if economic momentum slows [1][10] - By the end of the week, traders raised their bets on a September rate cut, with odds exceeding 90% [1] Investor Sentiment - Investors interpreted Powell's remarks as a sign that tariff-related inflation is viewed as temporary, not a long-term concern, which has fueled optimism in equities [2][10] - With falling treasury yields and a returning risk appetite, equities are expected to continue gaining in the upcoming weeks [2] Stock Recommendations - Recommended stocks based on relative price strength include Pediatrix Medical Group (MD), Enova International (ENVA), Primoris Services Corporation (PRIM), SkyWest, Inc. (SKYW), and Agnico Eagle Mines Limited (AEM) [3][10] Stock Analysis Strategy - Investors should assess stocks based on earnings growth and valuation multiples, while also considering their performance relative to industry peers or benchmarks [4] - Underperforming stocks should be avoided, while those outperforming their sectors in price should be prioritized for potential returns [5] - Stocks that have outperformed the S&P 500 over the past 1 to 3 months and have solid fundamentals are ideal candidates for investment [6] Earnings Estimates - Positive estimate revisions for upcoming earnings are crucial; upward revisions typically lead to additional price gains [7] - Screening parameters include relative price changes over various time frames and positive current-quarter estimate revisions [8] Zacks Rank and Stock Performance - Only Zacks Rank 1 (Strong Buy) stocks, which have historically outperformed the S&P 500, are considered for investment [9] - Specific stocks highlighted include: - **Pediatrix Medical Group (MD)**: Market cap of $1.5 billion, 51.8% share price increase over the past year, and a 9.3% upward revision in earnings estimates [11][12] - **Enova International (ENVA)**: Market cap of $2.9 billion, 37.4% share price increase, and a 32.4% growth estimate for 2025 earnings [13][14] - **Primoris Services Corporation (PRIM)**: Market cap not specified, 107.7% share price increase, and a 20.7% growth estimate for 2025 earnings [15] - **SkyWest, Inc. (SKYW)**: Market cap of $4.8 billion, 60.4% share price increase, and a 28.1% growth estimate for 2025 earnings [16] - **Agnico Eagle Mines Limited (AEM)**: Market cap of $69 billion, 66% share price increase, and a 62.2% growth estimate for 2025 earnings [17][18]

Economic Overview - The U.S. economy faced significant volatility with mixed signals, as major indexes like the S&P 500 and Dow Jones increased by 0.28% and 1.60%, while the Nasdaq Composite decreased by 0.62% [1] - The Federal Reserve Chair Jerome Powell suggested the possibility of an interest rate cut as early as September during the Jackson Hole symposium [1] Labor Market Concerns - A slowing labor market is a primary concern for the Federal Reserve, with recent data showing a downward revision of job growth in May and June, and only 73,000 jobs added in July [2] - Despite strong Q2 GDP numbers, labor market and manufacturing data indicate a potential economic slowdown, presenting a dilemma for the Fed between supporting the job market and combating inflation [2] Zacks Research Performance - WisdomTree, Inc. shares increased by 28% since being upgraded to Zacks Rank 2 (Buy) on June 23, outperforming the S&P 500's 8.7% gain [4] - Hafnia Limited shares rose by 14.1% after a Zacks Rank 2 upgrade on June 25, also surpassing the S&P 500's 6.4% increase [5] - A hypothetical portfolio of Zacks Rank 1 stocks returned +20.65% in 2023, compared to +24.83% for the S&P 500 index [6] Focus List and Model Portfolios - The Zacks Focus List portfolio returned +10.91% in 2025 (through July 31) compared to +8.59% for the S&P 500 index [12] - The Top 10 portfolio has delivered a cumulative return of +2,220.4% since 2012, significantly outperforming the S&P 500 index's +517.8% return [24] Sector-Specific Performance - Johnson & Johnson and The Hershey Company, part of the Earnings Certain Dividend Portfolio, returned 17.2% and 16.8% respectively over the past 12 weeks, driven by investor interest in quality dividend stocks amid market volatility [19] - Mettler-Toledo International Inc. and PepsiCo, part of the Earnings Certain Admiral Portfolio, saw returns of 18.6% and 15.7% over the past 12 weeks [15]

The consensus estimate for SkyWest's current year EPS has increased 7.2% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy). Looking more specifically, Dorian LPG belongs to the Transportation - Shipping industry, a group that includes 38 individual stocks and currently sits at #152 in the Zacks Industry Rank. On average, stocks in this group have lost 1.2% this year, meaning that LPG is performing better in terms of year-to-date returns. Dorian LPG is one of 122 individual sto ...

Technical Analysis - SkyWest (SKYW) has reached an important support level and surpassed resistance at the 20-day moving average, indicating a short-term bullish trend [1] - The 20-day simple moving average (SMA) is favored by traders for its ability to smooth out price fluctuations and provide trend reversal signals [2] Stock Performance - Over the past four weeks, SKYW shares have increased by 5.4% [4] - The company currently holds a Zacks Rank 1 (Strong Buy), suggesting potential for continued stock price appreciation [4] Earnings Estimates - There have been positive earnings estimate revisions for SKYW, with no estimates decreasing in the past two months and three estimates increasing [4] - The consensus estimate for the current fiscal year has also risen, reinforcing the bullish outlook for the company [4] Investment Outlook - Investors are encouraged to monitor SKYW for potential gains due to its key technical level and favorable earnings estimate revisions [5]

Core Viewpoint - SkyWest, Inc. (NASDAQ: SKYW) was identified as a strong buy in February 2025 when shares were priced at $98, indicating that the company was undervalued and under-appreciated. The stock has since increased by over 13% to $110.8, reflecting positive market sentiment towards the company [1]. Company Analysis - The stock price of SkyWest, Inc. has risen from $98 to $110.8, representing a growth of approximately 13% [1]. - The analysis emphasizes a focus on the underlying business and financial metrics rather than market narratives, aiming to provide a clear and honest perspective on the company's performance [1].

Core Insights - SkyWest, Inc. (SKYW) reported second-quarter 2025 results that exceeded expectations, with both earnings and revenues surpassing the Zacks Consensus Estimate and showing year-over-year improvement [1][2]. Financial Performance - Quarterly earnings per share were $2.91, exceeding the Zacks Consensus Estimate by 24.4% and improving 59.9% year over year [2]. - Revenues reached $1.04 billion, beating the Zacks Consensus Estimate by 5.3% and increasing 19.4% year over year [2]. - Revenues from flying agreements, which contributed 96.5% to total revenues, grew 17.8% from the previous year's figure of $987.5 million [3]. - Operating expenses were $865 million, up 16% from the year-ago quarter, attributed to increased flight production [5]. Operational Highlights - The airline carried 13.1% more passengers year over year, with departures increasing by 17.7% [3]. - The passenger load factor decreased by 1.6 points to 82.8% [3]. Strategic Initiatives - SkyWest has a multi-year flying contract with Delta Air Lines (DAL) to purchase and operate 16 new E175 aircraft, which will replace older models [4]. - By the end of 2028, SkyWest anticipates having nearly 300 E175 aircraft in its fleet [5]. - Capital expenditures during the reported quarter totaled $169 million, including the purchase of four CRJ550 aircraft and spare engines [8]. Shareholder Actions - The board approved a $250 million increase in the existing share repurchase plan, with $17.3 million spent to repurchase 195,000 shares at an average price of $88.61 [7]. - As of June 30, 2025, SkyWest had $267 million remaining under its current share repurchase program [7]. Cash and Debt Position - At the end of the second quarter, the company had cash and marketable securities of $727 million, down from $802 million at the end of the previous quarter [6]. - Long-term debt decreased to $2.5 billion from $2.7 billion at the end of the previous quarter [6]. Market Reaction - Despite the strong financial results, SkyWest's shares fell by 1.7% following the earnings release [1].

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents SkyWest, Inc.'s unaudited condensed consolidated financial statements and detailed notes for the periods ended June 30, 2025 [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section provides SkyWest, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, income, equity, and cash flow statements, with comprehensive explanatory notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section presents the consolidated balance sheets, detailing assets, liabilities, and stockholders' equity as of June 30, 2025, and December 31, 2024 | (Dollars in billions) | June 30, 2025 | December 31, 2024 | | :--------------------- | :------------ | :---------------- | | Total assets | $ 7.17 | $ 7.14 | | Total current assets | $ 1.06 | $ 1.12 | | Total liabilities | $ 4.59 | $ 4.73 | | Total stockholders' equity | $ 2.58 | $ 2.41 | - Total assets increased by **$34.2 million** from December 31, 2024, to June 30, 2025. Total stockholders' equity increased by **$173.6 million**, while total liabilities decreased by **$142.0 million** over the same period[7](index=7&type=chunk)[10](index=10&type=chunk) [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section details the consolidated statements of comprehensive income, including revenues, expenses, and net income for the three and six months ended June 30, 2025 and 2024 | (In millions, except per share amounts) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total operating revenues | $ 1,035.2 | $ 867.1 | $ 1,983.7 | $ 1,670.7 | | Total operating expenses | $ 865.1 | $ 747.5 | $ 1,674.2 | $ 1,451.6 | | Operating income | $ 170.1 | $ 119.6 | $ 309.5 | $ 219.1 | | Net income | $ 120.3 | $ 75.6 | $ 220.8 | $ 135.9 | | Basic earnings per share | $ 2.98 | $ 1.88 | $ 5.46 | $ 3.38 | | Diluted earnings per share | $ 2.91 | $ 1.82 | $ 5.32 | $ 3.28 | - For the three months ended June 30, 2025, total operating revenues increased by **19.4% YoY**, and net income increased by **59.1% YoY**. For the six months ended June 30, 2025, total operating revenues increased by **18.7% YoY**, and net income increased by **62.5% YoY**[13](index=13&type=chunk) [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section outlines changes in consolidated stockholders' equity, including common stock, retained earnings, and treasury stock, for the period ended June 30, 2025 | (In millions) | Balance at Dec 31, 2024 | Balance at June 30, 2025 | | :------------- | :---------------------- | :----------------------- | | Common Stock | $777.1 | $788.3 | | Retained Earnings | $2,594.2 | $2,815.0 | | Treasury Stock | $(962.7) | $(1,020.9) | | Total Stockholders' Equity | $2,408.8 | $2,582.4 | - Total stockholders' equity increased by **$173.6 million** from December 31, 2024, to June 30, 2025, primarily driven by net income of **$220.8 million**, partially offset by treasury stock purchases of **$30.9 million**[16](index=16&type=chunk)[199](index=199&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the condensed consolidated statements of cash flows, detailing operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | (In millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $ 428.1 | $ 323.0 | | Net cash used in investing activities | $ (372.7) | $ (76.0) | | Net cash used in financing activities | $ (234.5) | $ (253.5) | | Decrease in cash and cash equivalents | $ (179.0) | $ (6.5) | | Cash and cash equivalents at end of period | $ 48.3 | $ 141.8 | - Net cash provided by operating activities increased by **32.5% YoY** to **$428.1 million** for the six months ended June 30, 2025. Net cash used in investing activities significantly increased by **390.4% YoY** to **$372.7 million**, primarily due to increased property and equipment acquisitions and aircraft deposits. Net cash used in financing activities decreased by **7.5% YoY** to **$234.5 million**[22](index=22&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk)[194](index=194&type=chunk)[198](index=198&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes explaining the basis of presentation, accounting policies, and specific financial statement line items [(1) Condensed Consolidated Financial Statements](index=10&type=section&id=%281%29%20Condensed%20Consolidated%20Financial%20Statements) This note clarifies the basis of presentation for the unaudited financial statements and discusses recent accounting pronouncements - The financial statements are unaudited and prepared in accordance with SEC rules and GAAP, reflecting all necessary recurring adjustments. The Company is evaluating the impact of new FASB ASUs on income tax disclosures (ASU 2023-09) and expense disaggregation (ASU 2024-03), effective for annual periods beginning after December 15, 2024, and December 15, 2026, respectively[24](index=24&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) [(2) Operating Revenues](index=10&type=section&id=%282%29%20Operating%20Revenues) This note details the composition of operating revenues, including flying agreements and other revenue sources, and related credit loss allowances - Flying agreements revenue is primarily derived from fixed-fee capacity purchase agreements (**85.5%** of flying agreements revenue for H1 2025) and prorate agreements (**14.5%** for H1 2025)[30](index=30&type=chunk)[31](index=31&type=chunk) | (in millions) | For the three months ended June 30, 2025 | For the three months ended June 30, 2024 | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :------------- | :--------------------------------------- | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Flying agreements revenue | $ 987.5 | $ 838.2 | $ 1,903.5 | $ 1,616.5 | | Lease, airport services and other | $ 47.7 | $ 28.9 | $ 80.2 | $ 54.3 | - The Company has **502 aircraft** in scheduled service or under contract as of June 30, 2025, and plans to add **13 new E175 aircraft** with United (2025-2026), **16 new E175 aircraft** with Delta (2027-2028), and **one new E175 aircraft** with Alaska (2025). Additionally, **32 CRJ550 aircraft** are anticipated to be placed into service with United by end of 2026[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk) | Allowance for Credit Losses (in millions) | Amount | | :--------------------------------------- | :----- | | Balance at December 31, 2024 | $ 15.1 | | Adjustments to credit loss reserves | $ 10.1 | | Write-offs charged against allowance | $ (0.1) | | Balance at June 30, 2025 | $ 25.1 | [(3) Capital Transactions](index=20&type=section&id=%283%29%20Capital%20Transactions) This note describes capital transactions, including restricted stock units and performance share grants to employees - During the six months ended June 30, 2025, the Company granted **25,359 restricted stock units** and **59,165 performance shares** to employees, with a three-year vesting period and a weighted average fair value of **$118.96 per share**. Stock-based compensation expense for the period was **$9.9 million**[52](index=52&type=chunk)[54](index=54&type=chunk) [(4) Stock Repurchase](index=20&type=section&id=%284%29%20Stock%20Repurchase) This note provides information on the Company's stock repurchase program, including authorization and recent activity - The Board approved a **$250 million** increase to the existing stock repurchase program in May 2025, bringing the total authorized to **$500 million**. As of June 30, 2025, **$266.6 million** remained available. During the six months ended June 30, 2025, the Company repurchased **335,843 shares** for **$31.0 million** at an average price of **$92.24 per share**[55](index=55&type=chunk)[56](index=56&type=chunk) [(5) Net Income Per Common Share](index=20&type=section&id=%285%29%20Net%20Income%20Per%20Common%20Share) This note presents the calculation of basic and diluted net income per common share for the reported periods | (in millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $ 120.3 | $ 75.6 | $ 220.8 | $ 135.9 | | Basic earnings per share | $ 2.98 | $ 1.88 | $ 5.46 | $ 3.38 | | Diluted earnings per share | $ 2.91 | $ 1.82 | $ 5.32 | $ 3.28 | - **216,000 performance shares** (at target) were excluded from Diluted EPS computation for the six months ended June 30, 2025, as minimum target thresholds were not met[59](index=59&type=chunk) [(6) Segment Reporting](index=22&type=section&id=%286%29%20Segment%20Reporting) This note outlines the Company's reportable segments, SkyWest Airlines and SWC, and SkyWest Leasing, with their financial performance - The Company has two reportable segments: SkyWest Airlines and SWC (operations) and SkyWest Leasing (aircraft ownership/financing and third-party leasing). Segment profit is assessed based on income before income taxes[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) | (in millions) | SkyWest Airlines and SWC (3 months ended June 30, 2025) | SkyWest Leasing (3 months ended June 30, 2025) | Consolidated (3 months ended June 30, 2025) | | :------------- | :------------------------------------------------------ | :--------------------------------------------- | :------------------------------------------ | | Operating revenues | $ 869.3 | $ 165.9 | $ 1,035.2 | | Segment profit | $ 90.3 | $ 72.9 | $ 163.1 | | Total assets (as of June 30, 2025) | $ 3,086.2 | $ 4,087.9 | $ 7,174.1 | | Capital expenditures (including non-cash) | $ 74.3 | $ 65.2 | $ 139.5 | | (in millions) | SkyWest Airlines and SWC (6 months ended June 30, 2025) | SkyWest Leasing (6 months ended June 30, 2025) | Consolidated (6 months ended June 30, 2025) | | :------------- | :------------------------------------------------------ | :--------------------------------------------- | :------------------------------------------ | | Operating revenues | $ 1,671.0 | $ 312.7 | $ 1,983.7 | | Segment profit | $ 144.5 | $ 139.3 | $ 283.8 | | Total assets (as of June 30, 2025) | $ 3,086.2 | $ 4,087.9 | $ 7,174.1 | | Capital expenditures (including non-cash) | $ 193.2 | $ 65.2 | $ 258.4 | [(7) Leases, Commitments, Guarantees and Contingencies](index=25&type=section&id=%287%29%20Leases%2C%20Commitments%2C%20Guarantees%20and%20Contingencies) This note details the Company's lease obligations, firm purchase commitments for aircraft, and other financial guarantees - As of June 30, 2025, the Company had operating lease right-of-use assets of **$79.9 million** and total operating lease liabilities of **$79.9 million**. The weighted-average remaining lease term for operating leases is **11.0 years** with a weighted-average discount rate of **6.3%**[72](index=72&type=chunk)[73](index=73&type=chunk) | (in millions) | Total | Jul - Dec 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | | :------------- | :----------- | :------------- | :-------- | :-------- | :-------- | :-------- | :------------ | | Operating lease payments | $ 118.7 | $ 10.5 | $ 19.0 | $ 16.1 | $ 10.9 | $ 9.1 | $ 53.1 | | Firm aircraft and spare engine commitments | $ 2,434.0 | $ 206.8 | $ 229.2 | $ 323.3 | $ 329.1 | $ 309.2 | $ 1,036.5 | | Interest commitments | $ 378.9 | $ 52.5 | $ 89.3 | $ 66.1 | $ 49.2 | $ 36.9 | $ 84.9 | | Principal maturities on long-term debt | $ 2,514.6 | $ 266.9 | $ 535.1 | $ 490.2 | $ 320.3 | $ 216.7 | $ 685.4 | | Total commitments and obligations | $ 5,446.3 | $ 536.7 | $ 872.6 | $ 895.7 | $ 709.4 | $ 572.0 | $ 1,859.9 | - The Company has firm purchase commitments for **74 new E175 aircraft** (through 2032) and **21 used CRJ900 airframes** (2025). It also guarantees **$13.3 million** of debt for a 14 CFR Part 135 air carrier to support pilot hiring pipeline[75](index=75&type=chunk)[77](index=77&type=chunk)[80](index=80&type=chunk) [(8) Fair Value Measurements](index=29&type=section&id=%288%29%20Fair%20Value%20Measurements) This note describes the fair value measurements of financial assets, including cash, marketable securities, and investments | (in millions) | Fair Value Measurements as of June 30, 2025 | | :------------- | :------------------------------------------ | | Total Assets Measured at Fair Value | $ 737.3 | | Cash and Cash Equivalents (Level 1) | $ 48.3 | | Marketable Securities (Level 2) | $ 678.7 | | Investments in Other Companies (Level 3) | $ 10.3 | - Marketable securities, primarily bonds and commercial paper, are classified as **Level 2** and valued using broker quotes in non-active markets. Investments in other companies are classified as **Level 3**, requiring unobservable inputs[81](index=81&type=chunk)[82](index=82&type=chunk) [(9) Long-term Debt](index=31&type=section&id=%289%29%20Long-term%20Debt) This note provides details on the Company's long-term debt, including aircraft financing and unsecured debt to the U.S. Treasury | (in millions) | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Total long-term debt (including current portion) | $ 2,514.6 | $ 2,692.6 | | Carrying value | $ 2,514.6 | $ 2,692.6 | | Fair value | $ 2,457.8 | $ 2,612.8 | - As of June 30, 2025, total long-term debt was **$2.51 billion**, consisting of **$2.3 billion** for aircraft/spare engines and **$200.6 million** unsecured debt to the U.S. Treasury. The average effective interest rate was approximately **4.3%**. The Company financed two new E175 aircraft with **$47.1 million** in long-term debt during the period[85](index=85&type=chunk)[86](index=86&type=chunk) - SkyWest Airlines has a **$100.0 million** line of credit, with **$25.0 million** issued in letters of credit, leaving **$75.0 million** available as of June 30, 2025. The line of credit expires March 25, 2028, with a variable interest rate of **3.5% plus one-month SOFR**[87](index=87&type=chunk) [(10) Investments in Other Companies](index=33&type=section&id=%2810%29%20Investments%20in%20Other%20Companies) This note describes the Company's equity method investments in Aero Engines, LLC and Contour Airlines, and its warrant in Eve Holding, Inc - The Company holds a **75% ownership** in Aero Engines, LLC, accounted for under the equity method, with an investment balance of **$12.1 million** as of June 30, 2025. It also holds a **25% ownership** in Contour Airlines, accounted for under the equity method, with an investment balance of **$22.2 million** as of June 30, 2025[90](index=90&type=chunk)[91](index=91&type=chunk) - The Company's remaining investment in Eve Holding, Inc. is a warrant to acquire **1,500,000 shares**, classified as a **Level 3 fair value investment**. Its fair value increased by **$2.1 million** to **$10.3 million** as of June 30, 2025, recognized as an unrealized gain[96](index=96&type=chunk)[97](index=97&type=chunk) [(11) Income Taxes](index=35&type=section&id=%2811%29%20Income%20Taxes) This note presents the effective income tax rates and factors influencing tax expense for the reported periods | Period | Effective Tax Rate | | :----- | :----------------- | | H1 2025 | 22.2% | | H1 2024 | 25.5% | - The effective tax rate for H1 2025 was **22.2%**, lower than H1 2024 (**25.5%**), primarily due to a higher discrete tax benefit from additional tax deductions generated from employee equity awards that vested[98](index=98&type=chunk)[99](index=99&type=chunk)[163](index=163&type=chunk) [(12) Legal Matters](index=35&type=section&id=%2812%29%20Legal%20Matters) This note addresses the Company's legal proceedings and management's assessment of their potential financial impact - Management believes the ultimate outcome of routine legal actions is not likely to have a material adverse effect on the Company's financial position, liquidity, or results of operations as of June 30, 2025[100](index=100&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of SkyWest, Inc.'s financial condition, operational results, and liquidity for the reported periods [Cautionary Statement Concerning Forward-Looking Statements](index=36&type=section&id=Cautionary%20Statement%20Concerning%20Forward-Looking%20Statements) This statement advises readers about forward-looking information in the report, highlighting inherent risks and uncertainties - The report contains forward-looking statements identified by words like 'may,' 'will,' 'expect,' 'intend,' and 'anticipate,' related to outlook, operations, revenue environment, contractual relationships, and financial performance. These statements are subject to various risks and uncertainties, including competition, economic conditions, demand for air travel, infectious diseases, pilot availability, regulatory issues, financing, fuel costs, and global instability[102](index=102&type=chunk) [Overview](index=38&type=section&id=Overview) This section provides a general overview of SkyWest's business model, fleet operations, and strategic focus on code-share agreements - SkyWest operates the largest regional airline in the U.S., with approximately **2,530 daily departures** to destinations in the U.S., Canada, and Mexico. As of June 30, 2025, the total fleet comprised **632 aircraft**, with **502** in scheduled service or under code-share agreements[106](index=106&type=chunk) | Aircraft in Service or Under Contract | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :------------------------------------ | :------------ | :---------------- | :------------ | | E175s | 265 | 262 | 248 | | CRJ900s | 36 | 36 | 41 | | CRJ700s/CRJ550s | 121 | 119 | 99 | | CRJ200s | 80 | 75 | 87 | | Total | 502 | 492 | 475 | - The business model relies on code-share agreements, with capacity purchase agreements accounting for **85.5%** of flying agreements revenue and prorate/SWC revenue for **14.5%** for the six months ended June 30, 2025. The fleet is evolving with additions of new E175 aircraft and used CRJ aircraft to improve profitability[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk)[111](index=111&type=chunk) [Second Quarter Summary](index=40&type=section&id=Second%20Quarter%20Summary) This section summarizes key financial and operational highlights for the second quarter of 2025, including revenue and net income growth | (in millions, except per share) | Q2 2025 | Q2 2024 | % Change | | :------------------------------ | :-------- | :-------- | :------- | | Total operating revenues | $1,035.2 | $867.1 | 19.4% | | Net income | $120.3 | $75.6 | 59.1% | | Diluted EPS | $2.91 | $1.82 | 59.9% | - The increase in revenue was driven by a **5.7% increase** in aircraft in service and an **18.5% increase** in block hours, attributed to more aircraft under capacity purchase agreements and an increase in available captains. Capacity purchase revenue increased by **15.2%**, and prorate/SWC revenue increased by **35.8% YoY**[113](index=113&type=chunk)[114](index=114&type=chunk) - Total operating expenses increased by **15.7%** due to higher direct operating expenses from increased flight volume (**17.7% increase** in departures, **18.5% increase** in block hours)[115](index=115&type=chunk) [Fleet Activity](index=42&type=section&id=Fleet%20Activity) This section details changes in the Company's aircraft fleet, including additions and removals, and their impact on operational capacity | Aircraft in Service or Under Contract | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :------------------------------------ | :------------ | :---------------- | :------------ | | E175s | 265 | 262 | 248 | | CRJ900s | 36 | 36 | 41 | | CRJ700s/CRJ550s | 121 | 119 | 99 | | CRJ200s | 80 | 75 | 87 | | Total | 502 | 492 | 475 | - The number of aircraft in service or under contract increased from **475** at June 30, 2024, to **502** at June 30, 2025, primarily driven by additions of E175s and CRJ700s/CRJ550s[117](index=117&type=chunk) [Critical Accounting Policies and Estimates](index=42&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section discusses the significant accounting policies and estimates that require management judgment in financial reporting - Critical accounting policies include revenue recognition, long-lived assets, and income tax, which involve significant management judgment and assumptions. No significant changes in critical accounting estimates occurred during the six months ended June 30, 2025[118](index=118&type=chunk) [Recent Accounting Pronouncements](index=42&type=section&id=Recent%20Accounting%20Pronouncements) This section outlines new FASB accounting standards updates and their potential impact on the Company's financial statements - The Company is evaluating the potential impact of new FASB ASUs on income tax disclosures (ASU 2023-09) and expense disaggregation (ASU 2024-03)[26](index=26&type=chunk)[27](index=27&type=chunk)[119](index=119&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the Company's operating revenues and expenses for the reported periods [Three Months Ended June 30, 2025 and 2024](index=42&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section analyzes the operational statistics, revenues, and expenses for the three months ended June 30, 2025, compared to 2024 | Operational Statistics (Q2) | 2025 | 2024 | % Change | | :-------------------------- | :---------- | :---------- | :------- | | Total block hours | 376,269 | 317,462 | 18.5% | | Departures | 222,874 | 189,325 | 17.7% | | Passengers carried | 12,092,758 | 10,691,017 | 13.1% | | Passenger load factor | 82.8% | 84.4% | (1.6)pts | | Operating Revenues (Q2, in millions) | 2025 | 2024 | $ Change | % Change | | :------------------------------------ | :---------- | :---------- | :------- | :------- | | Flying agreements | $987.5 | $838.2 | $149.3 | 17.8% | | Lease, airport services and other | $47.7 | $28.9 | $18.8 | 64.8% | | Total operating revenues | $1,035.2 | $867.1 | $168.1 | 19.4% | | Operating Expenses (Q2, in millions) | 2025 | 2024 | $ Change | % Change | | :------------------------------------ | :---------- | :---------- | :------- | :------- | | Salaries, wages and benefits | $390.2 | $355.0 | $35.2 | 9.9% | | Aircraft maintenance, materials and repairs | $238.9 | $183.3 | $55.6 | 30.3% | | Depreciation and amortization | $90.2 | $96.8 | $(6.7) | (6.9)% | | Airport-related expenses | $27.1 | $17.5 | $9.6 | 54.6% | | Aircraft fuel | $27.5 | $21.3 | $6.1 | 28.7% | | Other operating expenses | $91.2 | $73.5 | $17.7 | 24.1% | | Total operating expenses | $865.1 | $747.5 | $117.6 | 15.7% | - Net income for Q2 2025 was **$120.3 million** (**$2.91 diluted EPS**), up from **$75.6 million** (**$1.82 diluted EPS**) in Q2 2024, driven by increased block hours and revenue recognition, partially offset by higher operating expenses[140](index=140&type=chunk) [Six Months Ended June 30, 2025 and 2024](index=48&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section analyzes the operational statistics, revenues, and expenses for the six months ended June 30, 2025, compared to 2024 | Operational Statistics (H1) | 2025 | 2024 | % Change | | :-------------------------- | :---------- | :---------- | :------- | | Total block hours | 728,424 | 607,263 | 20.0% | | Departures | 424,712 | 358,757 | 18.4% | | Passengers carried | 22,483,122 | 19,840,470 | 13.3% | | Passenger load factor | 80.8% | 82.7% | (1.9)pts | | Operating Revenues (H1, in millions) | 2025 | 2024 | $ Change | % Change | | :------------------------------------ | :---------- | :---------- | :------- | :------- | | Flying agreements | $1,903.5 | $1,616.5 | $287.0 | 17.8% | | Lease, airport services and other | $80.2 | $54.3 | $25.9 | 47.7% | | Total operating revenues | $1,983.7 | $1,670.7 | $313.0 | 18.7% | | Operating Expenses (H1, in millions) | 2025 | 2024 | $ Change | % Change | | :------------------------------------ | :---------- | :---------- | :------- | :------- | | Salaries, wages and benefits | $767.6 | $706.0 | $61.6 | 8.7% | | Aircraft maintenance, materials and repairs | $448.0 | $328.7 | $119.3 | 36.3% | | Depreciation and amortization | $179.6 | $192.7 | $(13.1) | (6.8)% | | Airport-related expenses | $54.9 | $38.4 | $16.5 | 43.0% | | Aircraft fuel | $51.9 | $42.5 | $9.5 | 22.3% | | Other operating expenses | $172.2 | $143.3 | $28.9 | 20.1% | | Total operating expenses | $1,674.2 | $1,451.6 | $222.6 | 15.3% | - Net income for H1 2025 was **$220.8 million** (**$5.32 diluted EPS**), up from **$135.9 million** (**$3.28 diluted EPS**) in H1 2024, driven by increased block hours and revenue, partially offset by higher operating expenses[164](index=164&type=chunk) [Our Business Segments](index=56&type=section&id=Our%20Business%20Segments) This section analyzes the financial performance of SkyWest Airlines and SWC, and SkyWest Leasing segments - SkyWest Airlines and SWC segment profit increased by **182.3%** to **$90.3 million** for Q2 2025 and by **290.9%** to **$144.5 million** for H1 2025, primarily due to increased block hour production and operating revenues[168](index=168&type=chunk)[170](index=170&type=chunk)[179](index=179&type=chunk)[181](index=181&type=chunk) - SkyWest Leasing segment profit increased by **3.8%** to **$72.9 million** for Q2 2025, driven by increased maintenance services revenue and lower depreciation. However, for H1 2025, SkyWest Leasing profit decreased by **4.2%** to **$139.3 million**, mainly due to an increase in credit loss reserves, partially offset by decreased interest expense and depreciation[177](index=177&type=chunk)[187](index=187&type=chunk) [Liquidity and Capital Resources](index=61&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the Company's cash position, marketable securities, debt, and capital expenditure plans | (in millions) | June 30, 2025 | December 31, 2024 | $ Change | % Change | | :------------- | :------------ | :---------------- | :--------- | :------- | | Cash and cash equivalents | $ 48.3 | $ 227.4 | $ (179.0) | (78.7)% | | Marketable securities | $ 678.7 | $ 574.3 | $ 104.4 | 18.2% | | Total | $ 727.0 | $ 801.6 | $ (74.6) | (9.3)% | - As of June 30, 2025, total liquidity (cash, cash equivalents, and marketable securities) was **$727.0 million**, a **9.3% decrease** from December 31, 2024. The Company had **$75.0 million** available under its line of credit[188](index=188&type=chunk)[191](index=191&type=chunk) - The capital mix at June 30, 2025, was **50.8% equity** and **49.2% total long-term debt**, shifting from **47.4% equity** and **52.6% debt** at December 31, 2024, indicating an improved equity position relative to debt[189](index=189&type=chunk) - Cash flows from operating activities increased by **$105.1 million (32.5%)** to **$428.1 million** for H1 2025. Cash used in investing activities increased significantly by **$296.7 million (390.4%)** to **$372.7 million**, primarily due to increased property and equipment acquisitions and aircraft deposits[191](index=191&type=chunk)[192](index=192&type=chunk)[194](index=194&type=chunk)[197](index=197&type=chunk) - The Company intends to finance its firm purchase commitment for **74 E175 aircraft** with **75-85% debt** and the remainder with cash, and to use cash for the **21 used CRJ900 airframes**[202](index=202&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section assesses the Company's exposure to market risks, including fuel prices, interest rates, and labor costs [Aircraft Fuel](index=67&type=section&id=Aircraft%20Fuel) This section discusses the Company's exposure to aircraft fuel price fluctuations and mitigation strategies - Major airline partners bear the economic risk of fuel price fluctuations on contracted flights. SkyWest bears this risk for its prorate and SWC operations, which represented approximately **14.5%** of total flying agreements revenue for H1 2025. A hypothetical **25% increase** in fuel price would result in an additional **$13.0 million** in fuel expense for H1 2025[208](index=208&type=chunk) [Interest Rates](index=67&type=section&id=Interest%20Rates) This section details the Company's exposure to interest rate changes on its long-term debt and financing arrangements - Long-term debt secured by aircraft and spare engines has fixed interest rates. Reimbursement rates under capacity purchase agreements are adjusted to reflect interest rates at financing closing, mitigating the impact of future interest rate changes on new aircraft acquisitions. Of the **$200.6 million** unsecured debt to Treasury, **$138.6 million** has a fixed **1% rate**, and **$62.0 million** has a variable **SOFR + 2.0% rate**[209](index=209&type=chunk) [Labor and Inflation Risk](index=69&type=section&id=Labor%20and%20Inflation%20Risk) This section addresses the impact of labor costs and inflationary pressures on the Company's operating expenses - The Company expects continued inflationary pressures on costs, particularly salaries, wages, and benefits, which represented **45.8%** of total operating expenses for H1 2025. A hypothetical **25% increase** in these costs would raise operating expenses by approximately **$191.9 million**. Inability to offset these costs or retain qualified personnel could harm business and operating results[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of the Company's disclosure controls and internal control over financial reporting [Disclosure Controls and Procedures](index=69&type=section&id=Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures as of June 30, 2025 - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025, ensuring timely and accurate reporting under the Exchange Act[213](index=213&type=chunk) [Changes in Internal Control](index=69&type=section&id=Changes%20in%20Internal%20Control) This section reports on any material changes in the Company's internal control over financial reporting - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the Company's internal control during the six months ended June 30, 2025[214](index=214&type=chunk) [PART II. OTHER INFORMATION](index=40&type=section&id=PART%20II%20OTHER%20INFORMATION) This section provides additional information not covered in Part I, including legal proceedings, risk factors, and equity sales [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) This section addresses the Company's involvement in legal actions and management's assessment of their potential impact - As of June 30, 2025, management believes that the ultimate outcome of routine legal matters is not likely to have a material adverse effect on the Company's financial position, liquidity, or results of operations[215](index=215&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the comprehensive discussion of risk factors that could materially affect the Company's business - Readers should carefully consider the risk factors discussed in the Annual Report on Form 10-K for the year ended December 31, 2024, and other SEC filings, as these could materially affect the Company's business, financial condition, and results of operations. Additional unknown or immaterial risks may also adversely affect the business[216](index=216&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's stock repurchase program, including recent activity and remaining authorization | Period (Q2 2025) | Total Number of Shares Purchased | Average Price Paid Per Share | | :----------------------- | :------------------------------- | :--------------------------- | | April 1, 2025 - April 30, 2025 | 144,657 | $ 85.46 | | May 1, 2025 - May 31, 2025 | 39,128 | $ 96.80 | | June 1, 2025 - June 30, 2025 | 11,400 | $ 100.48 | | Total | 195,185 | $ 88.61 | - In May 2025, the Board approved a **$250 million** increase to the stock repurchase program. As of June 30, 2025, **$266.6 million** remained available under the program, after repurchasing **195,185 shares** for **$17.3 million** during Q2 2025[218](index=218&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) This section confirms no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[219](index=219&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate documents and certifications - Exhibits include Restated Articles of Incorporation, Amended and Restated Bylaws, CEO and CFO certifications (31.1, 31.2, 32.1, 32.2), and Inline XBRL documents[220](index=220&type=chunk) [Signature](index=42&type=section&id=Signature) This section contains the official signature block for the Quarterly Report on Form 10-Q - The Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, was signed on July 25, 2025, by Robert J. Simmons, Chief Financial Officer of SkyWest, Inc[221](index=221&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk)

Core Insights - The article does not provide specific company or industry insights, focusing instead on disclosures and disclaimers related to investment positions and advice [1][2] Group 1 - There are no stock, option, or similar derivative positions held by the analyst in any mentioned companies, nor plans to initiate such positions in the next 72 hours [1] - The article expresses personal opinions of the author and does not reflect the views of Seeking Alpha as a whole [2] - Seeking Alpha's analysts include both professional and individual investors who may not be licensed or certified by any regulatory body [2]

Core Viewpoint - SkyWest (SKYW) reported quarterly earnings of $2.91 per share, exceeding the Zacks Consensus Estimate of $2.34 per share, and showing a significant increase from $1.82 per share a year ago, indicating strong financial performance [1][2] Financial Performance - The company achieved revenues of $1.04 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 5.29%, compared to $867.12 million in the same quarter last year [2] - Over the last four quarters, SkyWest has consistently surpassed consensus EPS estimates, indicating a strong track record of performance [2][6] Stock Performance - SkyWest shares have increased approximately 13.3% since the beginning of the year, outperforming the S&P 500's gain of 8.1% [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting it is expected to outperform the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.35 on revenues of $990.38 million, while for the current fiscal year, the estimate is $9.36 on revenues of $3.91 billion [7] - The outlook for the airline industry, where SkyWest operates, is favorable, with the Transportation - Airline sector ranking in the top 39% of Zacks industries, indicating potential for continued performance [8]

Financial Data and Key Metrics Changes - SkyWest reported a net income of $120 million or $2.91 per diluted share for Q2 2025, reflecting higher production and strong demand [5][11] - Total Q2 revenue was $1 billion, up 9% from $948 million in Q1 2025 and up 19% from $867 million in Q2 2024 [11][12] - Contract revenue for Q2 was $842 million, up from $785 million in Q1 and $731 million in Q2 2024 [11] - Cash at the end of Q2 was $727 million, down from $751 million last quarter and $834 million at Q2 2024 [13] - Free cash flow generated in the first half of 2025 was over $200 million, including $68 million in Q2 [15] Business Line Data and Key Metrics Changes - Pro rate and charter revenue was $145 million in Q2, up from $131 million in Q1 and $107 million in Q2 2024 [12] - Leasing and other revenue was $47 million in Q2, up from $32 million in Q1 2025 and $29 million in Q2 2024 [12] - Q2 completed block hours were up 7% compared to Q1 2025, with a projected 14% increase in 2025 compared to 2024 [26] Market Data and Key Metrics Changes - Demand for air travel in small and mid-sized communities remains exceptionally strong, with no replacement for face-to-face connections [5][9] - The company anticipates a 2% increase in block hours for Q3 compared to Q2, with a return to seasonal patterns expected [26] Company Strategy and Development Direction - SkyWest plans to restore or bring new service to underserved communities, redeploy existing fleet, and prepare for future aircraft deliveries [10] - The company has secured agreements for 16 new E175s with Delta, with deliveries expected in 2027 and 2028 [7][19] - A new purchase agreement with Embraer for 60 firm aircraft has been established, enhancing fleet flexibility [22][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position despite macroeconomic uncertainties, emphasizing strong relationships with partners [9][10] - The effective tax rate is expected to be approximately 26% to 27% for the remainder of 2025 [18] - Management remains optimistic about growth opportunities in 2026, focusing on underserved communities and improved aircraft utilization [18][26] Other Important Information - The company has approximately $286 million of cumulative deferred revenue to be recognized in future periods [12] - Maintenance expenses are expected to remain at Q2 levels for the remainder of 2025 due to challenges in the third-party MRO network [27] Q&A Session Summary Question: Discussion on CRJ200 fleet opportunities - Management indicated that the CRJ200 fleet provides flexibility, with priorities to fly those aircraft and add to contracts with major partners [33][35] Question: MRO challenges and maintenance issues - Management acknowledged ongoing challenges with parts and labor but noted improvements are being made [36][37] Question: Tariff implications on aircraft costs - The 10% tariff paid was not on the full aircraft but on certain components, with ongoing monitoring of tariff impacts [43][45] Question: Recovery in the pro rate and small community market - Management reported strong demand in small communities, with supply chain challenges being the primary constraint [55][58] Question: Capital allocation and delivery timing - Management expressed flexibility in capital deployment, with options to buy back stock or invest in fleet [60][74] Question: Reactivation of dual-class aircraft - The reactivation of 25 dual-class aircraft is due to new flying agreements and previously parked aircraft being brought back into service [81][82]