Spirit Airlines (SAVE - Snapshot Report) reported second-quarter 2015 financial numbers wherein the bottom line exceeded the Zacks Consensus Estimate while the top line was on par with the same.

In the reported quarter, GAAP earnings of $1.05 per share increased 18.3% year over year while adjusted earnings of $1.03 per share surpassed the Zacks Consensus Estimate of $1.01. 

Spirit Airlines Inc. - Earnings Surprise | FindTheBest

Operating revenues grew 10.8% from the year-ago quarter to $553.4 million, in line with the Zacks Consensus Estimate. The year-over-year growth can be attributed to a rise in flight volume. Passenger revenues accounted for the bulk (55.8%) of the top line. Non-ticket revenues accounted for the balance.

The carrier, which boasts an all-airbus fleet, exited the second quarter of 2015 with 73 aircrafts, which represented a 28% year-over-year increase. During the quarter, the low-cost carrier took delivery of 3 new A320 aircrafts.

Operating Statistics

Airline traffic, measured in revenue passenger miles, went up 27.8% year over year to 4.48 billion. Capacity or available seat miles increased 30.1% from a year ago, while load factor (percentage of seats filled with passengers) declined 150 basis points year over year to 86%. During the second quarter of 2015, average yield declined 13.3% to 12.35 cents as the carrier is constantly entering new markets. Operating revenue per available seat mile (RASM: a measure of unit revenue) stood at 10.62 cents, down 14.8%.

Expenses

Total operating expenses increased marginally to $431.1 million in the reported quarter. Fuel price (economic) stood at $2.08 per gallon, down from $3.13 a year ago. Adjusted cost per available seat mile (CASM), excluding fuel, decreased 2.5% year over year to 5.8 cents.

Balance Sheet
 
Spirit Airlines ended the second quarter of 2015 with cash and cash equivalents of $769.3 million against $632.8 million at the end of Dec 31, 2014. The carrier exited the quarter with a total debt (excluding current maturities) of $399 million as opposed to $135.2 million at the end of 2014. The debt to capitalization ratio at the end of the first quarter of 2015 was 26.9%, compared with 11.9% at the end of 2014.

Likewise, at the end of second-quarter 2015, cash from operating activity totaled $296.9 million versus $144.1 million in the year-ago quarter.  Free cash flow in the quarter stood at $11.3 million against $136.7 million a year ago.

Spirit Airlines currently holds a Zacks Rank #5 (Strong Sell).
 

Stocks to Consider

Better-ranked stocks in the industry include Allegiant Travel Company (ALGT - Snapshot Report), SkyWest Inc. (SKYW - Snapshot Report) and Alaska Air Group, Inc. (ALK - Snapshot Report). Alaska Air Group carries a Zacks Rank #2 (Buy) while the other two companies sport a Zacks Rank #1 (Strong Buy).