Why Spirit Airlines Shares Are Falling

Spirit Airlines Inc SAVE shares are trading lower by 5.25% to $16.16 Thursday afternoon. The stock is falling after the company reported second-quarter results during the pre-market session.

What Happened?

Spirit Airlines reported quarterly earnings of 29 cents per share, falling short of the analyst consensus estimate by 23.68%. However, the company showed significant improvement compared to the same period last year, with an increase over losses of 30 cents per share.

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In terms of quarterly sales, Spirit Airlines reported $1.43 billion, slightly missing the analyst consensus estimate by 2.55%. Despite this, there was a 4.79% increase in sales compared to the same period last year, when the company made $1.37 billion in sales.

Aircraft utilization in second-quarter 2023 meanwhile improved to 11.3 hours, a 5.6% increase over the same period in 2022.

Despite achieving record quarterly revenue, Spirit faced challenges with productivity, primarily due to pilot constraints and NEO engine availability issues, resulting in a disappointing operating margin for second-quarter 2023.

The company anticipates an operating margin range between negative 5.5% and negative 7.5% for third-quarter 2023, due to reduced domestic and Latin America demand outlook.

Spirit said the company is optimistic about improvements in pilot attrition levels, which could alleviate growth constraints. Additionally, an amendment with Airbus on their fleet order will provide a stable and predictable order book through the end of the decade, with aircraft mix changes expected to drive efficiencies throughout their business.

According to data from Benzinga Pro, Spirit Airlines has a 52-week high of $25.00 and a 52-week low of $14.41.