Airlines Earnings Mixed: What Lies ahead of ETF?

It’s been more than two weeks since Delta Air Lines Inc (NYSE:DAL). JETS was up 3.1% past week, down 1.3% in the past month and up 21.1% in the past three-month period. In fact, the fund beat the S&P 500 (up 8.6%) in the past three-month period.

This makes JETS a great bet for vaccine rollout and economic optimism. Still, we need to pay attention to the earnings picture of the industry. Let’s delve a little deeper.

Delta Air Lines DAL first-quarter 2021 loss (excluding $1.70 from non-recurring items) of $3.55 per share was wider than the Zacks Consensus Estimate of $3.08 as well as the first-quarter 2020 loss of 51 cents. This was the fifth successive quarterly loss incurred by this Atlanta-GA based company. Due to the passenger revenue weakness, total revenues in the March quarter tanked 51.7% and 60% to $4.150 billion from the first-quarter 2020 and 2019 levels, respectively. Revenues, however, topped the Zacks Consensus Estimate of $3.82 billion. Fuel price per gallon is anticipated in the $1.85-$1.95 range in Q2. The non-fuel unit cost (adjusted) is expected to increase between 6% and 9%.

United Airlines UAL came out with a quarterly loss of $7.50 per share versus the Zacks Consensus Estimate of a loss of $6.97. This compared to loss of $2.57 per share a year ago. These figures are adjusted for non-recurring items. United posted revenues of $3.22 billion for the quarter ended March 2021, missing the Zacks Consensus Estimate by 0.99%.

American Airlines (NASDAQ:AAL) Group Inc.’s AAL incurred a loss (excluding $2.35 from non-recurring items) of $4.32 per share, comparing favorably with the Zacks Consensus Estimate of a loss of $4.35. However, quarterly loss per share was wider than the year-ago loss of $2.65. Moreover, operating revenues of $4.01 billion slumped 52.9% year over year and also fell short of the Zacks Consensus Estimate of $4.03 billion.

Low-cost carrier Southwest Airlines (NYSE:LUV) Co. LUV incurred a loss of $1.72 per share (excluding $1.91 from non-recurring items) in the first quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $1.82. In the year-ago period, the company incurred a loss of 15 cents per share. Results were affected by significant decline in passenger revenues as a consequence of persistent weakness in air-travel demand amid coronavirus concerns. Meanwhile, operating revenues of $2.05 billion surpassed the Zacks Consensus Estimate of $2.03 billion. While bookings are improving, the company expects fuel costs per gallon to rise in Q2 and remain between $1.85 and $1.95 in the second quarter of 2021. In the year-ago period, the same was $1.33.

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JetBlue Airways (NASDAQ:JBLU) JBLU came out with a quarterly loss of $1.48 per share versus the Zacks Consensus Estimate of a loss of $1.68. This compares to loss of $0.42 per share a year ago. JetBlue, which belongs to the Zacks Transportation posted revenues of $733 million for the quarter ended March 2021, surpassing the Zacks Consensus Estimate by 2.31%.

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Written By: Zacks Investment Research