Shares of Frontier Group Holdings, Inc. (ULCC), a leading ultra-low-cost airline, plummeted by nearly 10% in early trading on Monday, October 29th, following the company's disappointing third-quarter 2024 earnings report. The budget carrier reported an adjusted net loss of $0.05 per diluted share for the quarter, significantly wider than analysts' expectations of a $0.02 loss.
ULCC's operating revenue for the quarter ended September 30th came in at $935 million, up from $883 million a year earlier but falling short of the consensus estimate of $942.7 million. The company attributed the revenue miss to the ongoing oversupplied industry capacity and intense competition in the airline sector, which have posed challenges for budget carriers like Frontier.
Analysts and investors were quick to react to the disappointing results, with Morgan Stanley maintaining a "Hold" rating on ULCC's stock. The firm's analyst, Ravi Shanker, cited concerns about the company's ability to navigate the oversupplied market conditions and sustain profitability in the near term.
Frontier Group's stock closed the day at $6.87, down 9.77% from the previous close, as investors reacted negatively to the earnings miss. The sharp decline reflects the heightened uncertainty surrounding the company's growth prospects and profitability in the face of industry headwinds.
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