Four more major carriers will report on Thursday, while Alaska (ALK) will report Friday.
In trading Wednesday, Hawaiian shares led the industry with a 7% gain, rising 94 cents to $14.63. The carrier reported, following the close on Tuesday, that its adjusted first-quarter loss, which excludes fuel costs, was 2 cents share, narrower than consensus estimate of a 12-cent-loss.
Delta shares rose 6%, gaining $2.14 to $37.09, after the carrier reported a record first-quarter profit excluding items of $281 million, beat estimates and guided toward a strong current quarter, with April passenger revenue per available seat mile up 6% and similar numbers expected in May and June.
Imperial Capital analyst Bob McAdoo wrote Wednesday that he was pleased by Hawaiian's move of aircraft "from unprofitable Asia routes to more profitable West Coastroutes," with service to Maui from San Jose and Los Angeles replacing service to Fukuoka, Japan, and Tapei.
McAdoo maintained a $16 price target, based on an earnings multiple of eleven. Cowen & Co. analyst Helane Becker raised her price target to $14 from $13.
"We've seen yields improve as the company has slowed its international growth," Becker wrote. "We believe PRASM will continue to improve on international routes as long as the Japanese yen and Australian dollar remain at current levels."
Meanwhile, Deutsche Bank analyst Mike Linenberg and JPMorgan analyst Jamie Baker both raised estimates for Delta following the carrier's earnings call.
"Given the March quarter beat and Delta's continued cost control/ better-than-expected revenue trends, we are raising our full year 2014 EPS forecast to $2.85 (vs. consensus of $2.65)," Linenberg wrote late Wednesday. He raised his price target to $40 from $37.
Baker raised his estimate to $47 from $40. That is because Delta's guidance toward a current quarter operating margin between 14% and 16%, if it is applied to the remaining three quarters, should boost consensus full-year estimates by 50 cents, he said.
Since Delta trades at 10 times earnings, "the mere $1.70 intraday increase in Delta's share price on Wednesday strikes us as insufficient," Baker wrote.
Written by Ted Reed in Charlotte, N.C.
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