Allegiant Tops Q4 Earnings and Revenue Estimates, Improves Y/Y

Core Points - Allegiant Travel Company reported fourth-quarter 2024 earnings per share (EPS) of $2.10, exceeding the Zacks Consensus Estimate of $1.88 and up from 11 cents per share in the same quarter last year [1] - Operating revenues reached $627.7 million, surpassing the Zacks Consensus Estimate of $624.8 million and reflecting a year-over-year increase of 2.7% [2] Revenue Breakdown - Passenger revenues, which constituted 88.2% of total revenues, experienced a decline of 0.4% year-over-year [3] - Air traffic, measured in revenue passenger miles, decreased by 2.2% year-over-year, while capacity, measured in available seat miles (ASMs), grew by 1.7% [3] - The load factor fell to 80.2% from 83.3% in the previous year, indicating that traffic did not keep pace with capacity growth [3] Cost and Efficiency - Operating costs per available seat mile, excluding fuel, decreased by 2.5% year-over-year to 8.29 cents [4] - The average fuel cost per gallon dropped by 22.2% year-over-year to $2.49 [4] - Total scheduled service passenger revenue per available seat mile fell to 13.01 cents from 13.16 cents a year ago [4] Liquidity and Debt - As of December 31, 2024, Allegiant's total unrestricted cash and investments amounted to $832.8 million, an increase from $804.6 million in the prior quarter [5] - Long-term debt and finance lease obligations totaled $1.61 billion, down from $1.77 billion in the previous quarter [5] Future Guidance - For Q1 2025, scheduled service ASMs are expected to increase by 14% year-over-year, with total system ASMs projected to rise by 13.5% [6] - The operating margin is anticipated to be between 8% and 11%, with adjusted EPS expected in the range of $1.75 to $2.75 [6] - For the full year 2025, scheduled service ASMs are projected to increase by 17% year-over-year, and total system ASMs are expected to rise by 16% [7] Capital Expenditures - Aircraft-related capital expenditures are expected to be in the range of $285 million to $315 million, with additional capital expenditures for maintenance and other airline needs [8] - The company aims to expand its fleet size to 125 by the end of Q1 2025 and maintain a fleet of 127 by the end of Q2 and Q3, before reducing to 122 by the end of Q4 2025 [8] Market Position - Allegiant currently holds a Zacks Rank 2 (Buy), indicating a favorable outlook in the market [9]