SkyWest, ExpressJet report results ahead of Street expectations
By Christopher Hinton, MarketWatch
Last update: 8:59 a.m. EDT Aug. 6, 2008NEW YORK (MarketWatch) - SkyWest Inc. and ExpressJet Holdings Inc. reported better-than-expected results on Wednesday, even as jet fuel prices hit record highs.
For the recent quarter, St. George, Utah -based SkyWest said net income fell to $36.4 million, or 63 cents a share, from $40.6 million, or 62 cents a share in the year-ago period.
Analysts polled by FactSet Research expected, on average, earnings of 59 cents a share.
Operating revenue climbed 11% to $950.8 million from $866 million, due primarily from an increase of fuel reimbursements by major partners. Total fuel expense in the quarter was $366.5 million, or 6 cents per available seat mile. Last year the company paid 5 cents per available seat mile.
Excluding fuel, operating expenses rose 4.4% to 9 cents per available seat mile.
SkyWest (SKYW:SKYW
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, , ) said it had $669.3 million in cash and marketable securities on the books as of June 30, up from $660.4 million.
During the quarter, SkyWest received $6.3 million from Continental Airlines (CAL:CAL
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, , ) as a break-up fee related to the failed acquisition of ExpressJet (XJT:XJT
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Shares of SkyWest closed Tuesday at $16.54, up 5.7%, amid a broader sector rally that was spurred on by the falling price of oil.
Separately, ExpressJet reported a second-quarter loss of $31.7 million, 62 cents a share, compared to a loss of $26.4 million, or 49 cents a share in the year-ago period. Total operating revenue rose 13% to $447 million from $395.6 million.
Excluding one-time items, the company said it lost 27 cents a share in the most recent quarter. Analysts had expected, on average, a loss of 37 cents a share.
Shares of ExpressJet added a penny in premarket trading to 31 cents a share.
On June 4, the Houston-based carrier said it amended a 7-year capacity purchase agreement with Continental, effective July 1 and covering 205 aircraft for the first year and a minimum of 190 aircraft for each remaining year.
The company also ceased flying for Delta Air Lines (DAL:DAL
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, , ) , returning 10 aircraft to Continental, and suspended its branded flying operations.
In the second quarter, ExpressJet operated a total of 215 aircraft under capacity purchase agreements with Continental and Delta.
ExpressJet had $191.7 million in cash, equivalents and short-term investments at the end of the quarter.
Christopher Hinton is a reporter for MarketWatch based in New York.
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