Mesa Air Surprises The Street With 4Q Profit; Stock Gains 3%

Shares of Mesa Air Group rose 3.3% in Wednesday’s extended trading after the commercial aviation company surprised the Street with a 4Q profit fueled by better-than-expected sales.

Mesa Air (MESA) delivered 4Q earnings of $0.32 per share, crushing the Street’s estimates for a loss of $0.10. Meanwhile, earnings declined by 11.1% year-over-year. The company’s revenues of $108.04 million topped the consensus estimates of $92.95 million, and declined 42.5% year-over-year, primarily due to the reduced flying amid COVID-19.

The company’s CEO Jonathan Ornstein said, “Despite a significant reduction in flying, we were able to find creative ways to reduce costs, operate profitably, generate positive cash-flow, and protect our employees from involuntary furloughs.” He added, “We also entered the cargo market through our new agreement with DHL – diversifying our revenue sources and creating new opportunities for our company. I can’t thank our hardworking employees enough, their dedication and professionalism truly went above and beyond this year.” (See MESA stock analysis on TipRanks)

On Nov. 30, Raymond James analyst Savanthi Syth said that she sees “some upside potential” in the stock.

Syth reiterated a Buy rating and raised the price target to $10 (38.3% upside potential) from $6.50. Shares have declined by about 19.1% year-to-date.

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