Low-cost airline Allegiant cuts profit outlook due to rising costs; the stock plunges

Posted: July 25, 2022 6:48 PM ET

LAS VEGAS — Shares in Allegiant Air’s parent company tumbled after hours on Monday after the low-cost airline gave a disappointing outlook for its second-quarter earnings that it said were sapped by downturns. higher costs, including fuel.

Allegiant Travel Co. ALGT said after the market closed it expected to report earnings of 62 cents per share. The company had previously forecast earnings of 92 cents per share, and analysts had been even more bullish, expecting $1.36 per share, according to a FactSet survey.

His…

LAS VEGAS — Shares in Allegiant Air’s parent company tumbled after hours on Monday after the low-cost airline gave a disappointing outlook for its second-quarter earnings that it said were sapped by downturns. higher costs, including fuel.

Allegiant Travel Co.

ALGT

said after the market closed that it expects to report earnings of 62 cents per share. The company had previously forecast earnings of 92 cents per share, and analysts had been even more bullish, expecting $1.36 per share, according to a FactSet survey.

Its shares traded down more than 18% in extended trading on Monday.

Allegiant’s woes echoed what major airlines have been saying over the past two weeks: Demand for tickets remains strong as people want to travel after more than two years of the pandemic, but costs are rising rapidly for the fuel, labor and other expenses.

The Las Vegas-based airline said revenue for the April-June quarter was around $629 million, up 28% from the same period in 2019, and strong sales continued in July, with flights slightly above 90% on average.

However, Allegiant paid $4.32 per gallon for fuel in the quarter, more than expected, and the planes consumed $9 million in additional fuel that the airline attributed to carrying more passengers per flight, which which weighs down the planes. Non-fuel costs increased by 14% per mile compared to 2019.

Allegiant is due to release its quarterly results on August 3.

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