LONDON, UK / ACCESSWIRE / November 21, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on SkyWest, Inc. (NASDAQ: SKYW), which can be viewed by registering at http://protraderdaily.com/optin/'symbol=SKYW, following the Company's reporting of its third quarter fiscal 2017 operating results on October 25, 2017. The regional airline outperformed top- and bottom-line expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Earnings Reviewed
For the quarter ended September 30, 2017, SkyWest reported revenues of $832 million, up 4% from $800 million in Q3 2016. The increase in revenues included the net impact of adding 37 new E175 aircraft since Q3 2016, and partially offset by the removal of 75 unprofitable or less profitable aircraft over the same period. The Company's revenue numbers topped analysts' expectations of $816.8 million.
SkyWest's operating expenses were $720 million in Q3 2017, up from $714 million in Q3 2016. The slight increase in operating expenses was primarily due to higher fuel costs and an increase in engine maintenance costs.
SkyWest posted a net income of $54 million, or $1.01 per diluted share, compared to a net income of $41 million, or $0.79 per diluted share, for Q3 2016. The net income figures included early lease return costs of $9 million, representing a reduction of $0.11 in diluted earnings. The diluted earnings per share (EPS) increased 28% on a y-o-y basis, or 12% after adjusting for the early lease charges included in the Q3 2016 results. The improvement in net income was primarily attributed to SkyWest's continued fleet transition. The Company's earnings numbers exceeded Wall Street's expectations of $0.98 per share.
Operating Updates
During Q3 2017, SkyWest announced the order of 30 new E175 SC aircrafts to be placed under contract with Delta Air Lines and 15 new E175 aircrafts to be placed under contract with Alaska Airlines. The Company anticipates adding three new E175 aircrafts in Q4 2017, and 42 new E175/E175 SC aircrafts in 2018.
During Q3 2017, the Company's ExpressJet Airlines, Inc. announced a five-year extension to its ERJ145 flying contract with United Airlines, effective January 01, 2018. The financial terms of the agreement were not disclosed. ExpressJet Airlines also initiated the wind-down of its remaining dual-class flying agreement with Delta Air Lines during Q3 2017.
During Q3 2017, the adjusted completion rate at SkyWest Airlines was equal to the 99.9% recorded in Q3 2016. The segment's raw completion rate was 98.9% compared to 99.4% in the year-ago corresponding period.
For Q3 2017, SkyWest's Passenger segment's revenues totaled $812.30 million compared to $781.48 million for Q3 2016. The Company's Group Handling and Other segment's revenues were $19.64 million in the reported quarter versus $18.30 million in the year-earlier comparable quarter.
Capital and Liquidity
SkyWest had $675 million in cash and marketable securities at September 30, 2017, up $110 million from December 31, 2016, and up $40 million from June 30, 2017. During Q3 2017, the Company used $52 million in cash towards aircraft deposits and the purchase of one E175 aircraft. SkyWest did not repurchase any stock in the reported quarter under its $100 million share repurchase program of which $90 million remains authorized.
SkyWest's total debt decreased by $75 million during Q3 2017, primarily from scheduled principal payments. In Q3 2017, excluding the aircraft purchased, SkyWest used $30 million for other capital investments, including spare engines and aircraft parts.
Stock Performance
On Monday, November 20, 2017, the stock closed the trading session at $50.65, slightly rising 0.70% from its previous closing price of $50.30. A total volume of 270.36 thousand shares have exchanged hands. SkyWest's stock price skyrocketed 50.30% in the last three months, 44.71% in the past six months, and 41.28% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have soared 38.96%. The stock has a dividend yield of 0.63%. At Monday's closing price, the stock's net capitalization stands at $2.59 billion.
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