Earnings call transcript: SkyWest beats Q4 2024 earnings expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 01 2025
0mins
Source: SeekingAlpha
Net Income (Q4 2024) $97,000,000, up from $3.23 million in 2023, reflecting strong operational performance and increased flight completions.
Earnings Per Share (Q4 2024) $2.34, compared to $7.77 in 2023, indicating a significant year-over-year change due to the lower net income.
Total Revenue (Q4 2024) $9.44 million, up 26% from $7.52 million in 2023, driven by increased contract revenue and strong demand.
Contract Revenue (Q4 2024) $7.86 million, up 27% from 2023, attributed to the new multiyear agreements and increased flying.
Pro Rate and Charter Revenue (Q4 2024) $126 million, up 14% from 2023, reflecting improved market conditions and demand.
Leasing and Other Revenue (Q4 2024) $32 million, up 34% from 2023, due to increased leasing activity and other income.
Cash (End of Q4 2024) $8.02 million, slightly down from $8.36 million last quarter, impacted by debt repayment and share buybacks.
Debt (End of Q4 2024) $270 million, down from $300 million at year-end 2023, reflecting ongoing deleveraging efforts.
Free Cash Flow (2024) Over $500 million, primarily used for debt repayment and share repurchase.
Total CapEx (2024) $340 million, up from $97 million in 2023, as part of growth initiatives including new aircraft acquisitions.
Shares Outstanding (End of Q4 2024) 4,030,000, down from 5,060,000 at the start of 2023, due to share repurchase activities.
Deferred Revenue (End of Q4 2024) $3.22 million, expected to be recognized in future periods, reflecting ongoing revenue recognition practices.
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Analyst Views on SKYW
Wall Street analysts forecast SKYW stock price to rise
4 Analyst Rating
3 Buy
1 Hold
0 Sell
Strong Buy
Current: 86.220
Low
112.00
Averages
131.00
High
150.00
Current: 86.220
Low
112.00
Averages
131.00
High
150.00
About SKYW
SkyWest, Inc. is the holding company for SkyWest Airlines, Inc. (SkyWest Airlines), SkyWest Charter, LLC (SWC), and SkyWest Leasing, Inc. (SkyWest Leasing), an aircraft leasing company. The Company’s segments include SkyWest Airlines and SWC, and SkyWest Leasing. SkyWest Airlines offers scheduled passenger service to destinations in the United States, Canada, and Mexico. The Company's flights are operated as United Express, Delta Connection, American Eagle or Alaska Airlines flights under code-share agreements with United Airlines, Inc., Delta Air Lines, Inc., American Airlines, Inc. or Alaska Airlines, Inc., respectively. SkyWest Airlines has a fleet of approximately 500 aircraft. SWC offers on-demand charter service using CRJ200 aircraft in over 30-seat configuration. SkyWest Leasing finances new aircraft with debt under its capacity purchase agreements, consisting of its E175 aircraft. SkyWest Leasing is also engaged in leasing aircraft and engines to third parties.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- New Product Launch: SkyWest plans to launch the new CRJ450 aircraft this fall, aimed at enhancing customer experience and expanding market share, with approximately 100 CRJ450s expected to be in service, indicating the company's proactive approach to product innovation and market competition.
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- Positive Market Outlook: Despite rising fuel costs, the buy thesis for SkyWest remains strong, suggesting continued growth potential and reflecting the company's solid position and effective management within the industry.
- Improved Industry Ranking: SkyWest ranks fifth among U.S. airlines, highlighting its significance and influence in the market, with potential for further market share enhancement through operational optimization.
See More
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- Earnings Expectation Changes: Over the past three months, EPS estimates have seen no upward revisions and five downward adjustments, while revenue estimates also faced no upward revisions and four downward changes, indicating market caution regarding SkyWest's profitability.
- Growth and Value Investment: Despite the downward revisions in earnings expectations, analysts maintain a positive buy thesis for SkyWest, suggesting that its valuation at 8x earnings presents a compelling opportunity for both growth and value investors.
- Future Development Plans: SkyWest anticipates mid-single-digit block hour growth in 2026, with planned capital expenditures of $600 million to $625 million, supported by contract extensions and robust fleet plans, demonstrating the company's confidence in future growth prospects.
See More
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See More
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- Fuel Security for Delta: Delta Air Lines secures 75% of its fuel consumption through its Trainer Refinery in Pennsylvania, acquired for $180 million in 2012, aimed at stabilizing jet fuel costs and ensuring an uninterrupted supply for its northeastern U.S. hubs.
- Profitability Advantage: Delta boasts the highest pre-tax profit margin in the airline industry, which not only buffers its earnings per share but also generates a high-teens percentage of revenue from Atlantic routes, second only to United Airlines (UAL), showcasing its strong market position.
- SkyWest's Unique Business Model: SkyWest benefits from a regional airline contract flying model where fuel costs are nearly fully passed through to customers (approximately 90% of total capacity), and with no financing obligations on its fleet, it can effectively absorb necessary capacity reductions during economic shocks.
See More
