In a major disappointment for investors, the airline Spirit Airlines (NYSE: SAVE) reduced its third quarter outlook and now expects total revenues in the range of $1.24 billion to $1.25 billion as compared to its prior forecast of $1.3 billion to $1.32 billion. For reference, analysts have projected Q3 revenues of $1.32 billion.
The company estimates an adjusted operating loss in Q3 with an adjusted operating margin between a negative 14.5% and a 15.5%. This is wider than its prior estimate of a negative adjusted operating margin in the range of a negative 5.5% to 7.5%. SAVE has bumped up its Q3 forecast of fuel costs to $3.06 per gallon from an earlier forecast of $2.80 per gallon.
The company stated in its press release that higher fuel prices and “heightened promotional activity with steep discounting for travel booked for the second half of the third quarter” have resulted in the lowered forecast.
Shares of Spirit Airlines were down in pre-market trading following the news.
Analysts remain sidelined about SAVE stock with a Hold consensus rating based on five Holds and one Sell.
