Airlines are an important part of the economy, but their stocks often have been lousy investments. Airline stock prices move with economic cycles, and past downturns have caused airline bankruptcies and failures.
Industry consolidation, however, has created a small group of competitors that are more effectively using technology to manage schedules and set fares. Today, four airlines control about 80% of the U.S. market.
The COVID-19 pandemic temporarily caused airline revenues and share prices to fall. But vaccines have people traveling again, and airline stocks have regained some altitude as passenger numbers have increased this year.
As people start traveling more, domestic tourist destinations are recovering to near pre-pandemic highs. But that has created a fresh set of challenges for airlines that slimmed down during the crisis and are now struggling to adequately staff additional flights. Add in higher labor costs, and the return to a pre-COVID balance sheet is a struggle.
There is help on the way. As the pandemic recedes, business and international flying -- the most lucrative parts of the business -- are expected to return. However, the International Air Transport Association, the airline industry’s trade organization, has said a full recovery might not happen until 2024, creating a lot of uncertainty.
The 2021 Q4 reporting cycle is about to begin. The following is the earnings preview of the four major U.S. airlines.
The best airline stocks
Delta Air Lines- Reports January 13th
Q4 Expectation: $0.06 in EPS, $8.389B in revenues
Delta Air Lines last released its earnings data on October 13th, 2021. The transportation company reported $0.30 EPS for the quarter, topping analysts' consensus estimates of $0.15 by $0.15. The business earned $9.15 billion during the quarter, compared to analyst estimates of $8.46 billion. Its revenue was up 199.0% compared to the same quarter last year. Delta Air Lines has generated ($0.13) earnings per share over the last year (($0.13) diluted earnings per share). Earnings for Delta Air Lines are expected to grow in the coming year, from ($4.25) to $2.80 per share.
Southwest Airlines- Reports January 27th
Q4 Expectation: $0.008 in EPS, $4.971B in revenues
Southwest Airlines last posted its earnings results on October 20th, 2021. The airline reported ($0.23) earnings per share for the quarter, topping analysts' consensus estimates of ($0.27) by $0.04. The firm had revenue of $4.68 billion for the quarter, compared to analysts' expectations of $4.58 billion. Its quarterly revenue was up 161.0% compared to the same quarter last year. Southwest Airlines has generated ($0.05) earnings per share over the last year (($0.05) diluted earnings per share). Earnings for Southwest Airlines are expected to grow in the coming year, from ($2.27) to $1.92 per share.
United Airlines Holdings- Reports January 19th
Q4 Expectation: $-2.194 in EPS, $7.955B in revenues
United Airlines last announced its quarterly earnings data on October 18th, 2021. The transportation company reported ($1.02) earnings per share for the quarter, beating the consensus estimate of ($1.65) by $0.63. The firm earned $7.75 billion during the quarter, compared to analysts' expectations of $7.64 billion. Its revenue was up 211.4% compared to the same quarter last year. United Airlines has generated ($10.58) earnings per share over the last year (($10.58) diluted earnings per share). Earnings for United Airlines are expected to grow in the coming year, from ($14.47) to $1.91 per share.
American Airlines Group- Reports January 20th
Q4 Expectation: $-1.765 in EPS, $9.089B in revenues
American Airlines Group last issued its quarterly earnings results on October 20th, 2021. The airline reported ($0.99) earnings per share for the quarter, beating analysts' consensus estimates of ($1.04) by $0.05. The business had revenue of $9 billion for the quarter, compared to analyst estimates of $8.92 billion. Its revenue was up 183.6% on a year-over-year basis. American Airlines Group has generated ($5.50) earnings per share over the last year (($5.50) diluted earnings per share). Earnings for American Airlines Group are expected to grow in the coming year, from ($8.71) to ($0.32) per share.
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