Dahlman Rose Lowers Estimates On Allegiant Travel Co

According to a recent report released by Dahlman Rose, Allegiant Travel Co. ALGT reported December traffic that was below expectations. In addition unit revenue growth slowed at the end of the quarter, negatively affecting revenues. Dahlman lowered its 4Q10 EPS estimate to reflect the weakness and is reiterating its Hold rating. Allegiant grew unit revenue by 10.6%, 10.6% and 7.7%% in October, November and December respectively. The company expects to have 4Q10 unit revenue growth in the range of 9.1% to 9.5%. Cost per passenger is estimated to be $58 to $59 per passenger, and jet fuel is estimated at $2.62 per gallon. Capacity growth for 1Q11 and 2Q11 is expected to grow 3% to 5% and 4% to 8% respectively. For 4Q10, Dahlman is now forecasting EPS of $0.58, down from a prior estimate of $0.71 due to lower than expected unit revenue growth in December. For 2011 Dahlman is forecasting EPS of $3.59 down from a prior estimate of $3.69 to reflect rising jet fuel costs. ALGT is trading lower at $49