Spirit Airlines announced its first-quarter earnings on Monday, but the focus was on the second quarter. And it wasn’t good news.
Because of a variety of factors, Spirit expects diminished growth in Q2. Almost immediately after the market opened this morning, the stock price fell nearly nine percent.
The company is forecasting revenue in the
second quarter to be as much as $120 million below what analysts are
predicting.
One significant factor contributing to the reduced growth expectations is the engine problem, which will force Spirit to ground nearly two dozen planes. This, coupled with the delayed airplane deliveries from Airbus, will result in a smaller capacity than usual.
“Spirit's
advisers have started discussions with our loyalty bondholders and convert
holders that come due in September 2025 and May 2026, respectively, and expect
a resolution at some point this summer," Chief Financial Officer Scott
Haralson said.
The first quarter saw a loss of $1.46 per share, which is a penny more than analysts' predictions of $1.45 per share.
"While we reported a loss in the
first quarter 2024, we are making progress towards our financial goals," said Ted
Christie, Spirit's President and Chief Executive Officer. "I thank
the entire Spirit team for their continued focus on running a reliable
operation and delivering value to our guests as we implement our go-forward
standalone plan."
"There are numerous steps to rollout the plan in a successful,
orderly fashion, but we are on track and we are excited to unveil the
milestones to you over the coming months,"
Christie continued. "The
competitive environment remains challenging due to elevated capacity in many of
the markets we serve. Nevertheless, we are confident that the strategic changes
we are implementing, together with our cost saving initiatives, will allow
Spirit to compete effectively in today's marketplace and drive continuous
improvement in the years ahead."
Spirit was expecting
a positive cash flow in the second quarter.
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