Allegiant Q1 Earnings and Revenues Top Estimates, Improve Y/Y

Core Viewpoint - Allegiant Travel Company (ALGT) reported strong first-quarter 2025 earnings, exceeding expectations, with significant growth in operating revenues and passenger revenues despite a decrease in load factor. Financial Performance - First-quarter 2025 earnings per share (excluding non-recurring items) were $1.81, surpassing the Zacks Consensus Estimate of $1.54, and up from 57 cents per share in the same quarter last year [1] - Operating revenues reached $699.1 million, exceeding the Zacks Consensus Estimate of $690.3 million, and improved by 6.5% year-over-year [1] Revenue Breakdown - Passenger revenues, which constituted 88.2% of total revenues, increased by 6.3% year-over-year [2] - Air traffic, measured in revenue passenger miles, improved by 10% year-over-year, while capacity, measured in available seat miles (ASMs), grew by 14.4% [2] - The load factor decreased to 80.5% from 83.8% year-over-year, indicating that traffic growth did not keep pace with capacity expansion [2] Cost and Efficiency - Airline operating costs per available seat mile, excluding fuel, fell by 9% year-over-year to 8.07 cents [3] - Average fuel cost per gallon decreased by 12.2% year-over-year to $2.63 [3] - Total scheduled service passenger revenue per available seat mile declined to 12.29 cents from 13.23 cents a year ago [3] Liquidity and Debt - As of March 31, 2025, total unrestricted cash and investments were $906.3 million, up from $832.8 million at the end of 2024 [4] - Long-term debt and finance lease obligations totaled $1.75 billion, compared to $1.61 billion at the end of 2024 [4] Future Guidance - For Q2 2025, scheduled service ASM is expected to increase by 15.5% year-over-year, with total system ASM projected to gain 15% [5] - The operating margin is anticipated to be between 6% and 8%, with adjusted EPS expected to range from 50 cents to $1 [6] - Fuel cost per gallon is projected to be $2.40 [6] Interest and Fleet Projections - Interest expenses for 2025 are forecasted to be between $150 million and $160 million, with capitalized interest between $15 million and $25 million [7] - The company aims to have a fleet size of 126 by the end of Q2 2025, with projections of 123 and 122 by the end of Q3 2025 and 2025, respectively [7] Market Position - Allegiant currently holds a Zacks Rank 5 (Strong Sell) [8]