NEW YORK (TheStreet) -- Shares of Spirit Airlines (SAVE) are down 11.15% to $75.05 today on heavy trading volume after Raymond James downgraded the airline to "market perform" from "outperform," saying lower oil will be only a limited help to profits, according to CNBC.
The Miramar, FL-based company reported its preliminary traffic results for November 2014 yesterday, when it warned "since late October there has been compression in the fare structure for close-in bookings believed to be driven by the industry's willingness to trade lower fuel prices for lower fares."
The company said it has also noticed some dilutive pricing arising from the change in capacity related to the expiration of the Wright Amendment, the 1979 law that limited the use of Dallas' Love Field airport.
Given these changes, the company expects its fourth quarter adjusted operating margin to be between 18% and 19%. This estimated range assumes a fourth quarter economic fuel cost per gallon of $2.60 and that adjusted CASM ex-fuel is down about 1% year over year, which is better than the company's previous guidance due in part to an expected litigation settlement.
Based on the current pricing environment, the company still estimates its adjusted operating margin guidance for the first quarter 2015 will be about 20%.