swung to a profit amid a rapid expansion, announcing plans to add more jets in 2004.
The Phoenix-based regional carrier, which flies on behalf of carriers like United Airlines and US Airways, announced net first-quarter earnings of $5.9 million, or 16 cents a share, topping the year-ago loss of $600,000, or 2 cents a share. On a pro forma basis, adding back in expenses related to Mesa's failed takeover of Atlantic Coast Airlines, the carrier said it earned $8.8 million, or 22 cents a share. Wall Street had expected 20 cents a share.
Revenue for the first quarter came in 41% higher than last year, but missed Wall Street expectations. Mesa announced net revenue of $187.6 million, up from the year-ago $133.1 million. According to Thomson First Call, analysts expected the carrier's revenue to come in at $230.3 million.
In the first quarter, Mesa grew by leaps and bounds, flying more than 2.1 million passengers, up 48.3% from last year. The carrier increased capacity, measured in available seat miles, by 51.7%, while traffic, measured in revenue passenger miles, rose by 69.2%. As a result, Mesa's planes were 68% full in the first quarter, up from 61% a year ago.
And the carrier said it will continue to grow, announcing plans to buy a mix of 20 CRJ-700 and CRJ-900 planes for delivery through 2005. Furthermore, the carrier said it reached a new financing agreement with an aircraft manufacturer to provide financing on another 11 regional jets. The new jet orders come on top of the 12 planes it announced financing for back in December. At the end of the first quarter, the carrier said it had 104 regional jets in its fleet.
"Our growth plan continues to move forward on schedule. During the quarter we added eight regional jets and increased our year-over-year capacity by more than 50%," said CEO Jonathan Ornstein. "In addition, since the signing of our new pilot contract, we have added more than 500 pilots and created significant job opportunities for all of our employees."
As the carrier expands, some key metrics are showing declines. Yield, a measure of pricing power, fell to 18.9 cents in the first quarter, down 16.7% from last year. Also, revenue per available seat mile, or RASM, fell 7.2%. Helping offset these slides, however, was a 14.7% reduction in cost per available seat mile, or CASM.
Shares of Mesa rose 27 cents, or 2.4%, to $11.38 on Tuesday morning.