Spirit Airlines (SAVE) shares are plunging in the premarket session today after the air carrier issued a dismal second-quarter outlook. The company is scheduled to report its Q2 numbers next week.
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Spirit’s Dismal Outlook
Spirit expects revenue of $1.28 billion for the second quarter. The estimate came in lower than its prior expectations of $1.32-$1.34 billion in revenue for the period. The lowered expectation is a result of disappointing non-ticket revenue collections. Spirit now anticipates non-ticket revenue per passenger segment at $64, which is several dollars lower than its prior estimates. Moreover, Spirit expects the pressure on leisure ticket yields to continue into the third quarter owing to substantial increases in industry capacity.
Aggravating investors’ disappointment is Spirit’s margin performance. The company expects an adjusted operating margin of -13.5% to -12.5% for the quarter. This is wider than its previous estimate of -11% to -9%. As a result, Spirit sees its adjusted operating loss for the quarter landing between $160 and $173 million, wider than its prior estimate of a loss of $145-$121 million.
Spirit’s Upcoming Q2 Numbers
Spirit’s share price has tanked by nearly 82% over the past year amid a fair share of troubles. The company’s $3.8 billion merger with JetBlue (JBLU) was terminated earlier this year. Additionally, its fleet has seen an impact from Pratt & Whitney engine issues. As a result, Spirit’s Q2 numbers on July 24 will be keenly watched. Analysts expect the company to post a net loss per share of $1.24 on $1.32 billion in revenue for the quarter.
What Is the Price Forecast for SAVE Stock?
Overall, the Street has a Moderate Sell consensus rating on Spirit, alongside an average SAVE price target of $2.88.
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