SkyWest (NASDAQ:SKYW) Releases Earnings Results

Key Points

• SkyWest exceeded earnings expectations in the third quarter, reporting $3.08 in diluted EPS versus the $3.07 consensus estimate, $120 million in net income, and approximately $1.1 billion in revenue. The airline completed 99.9% of more than 230,000 flights.
• Higher fuel costs pressured the prorate business: Fuel expense rose to $66 million from $34 million a year earlier as average fuel prices reached $4.56 per gallon, with higher yields only partly offsetting the increase.
• Management expects continued fleet expansion, including 18 new E175 aircraft in 2027, while analysts maintain a consensus “Hold” rating with an average price target of $113.

SkyWest (NASDAQ:SKYW - Get Free Report) posted its earnings results on Thursday. The transportation company reported $3.08 EPS for the quarter, topping analysts' consensus estimates of $3.07 by $0.01, FiscalAI reports. SkyWest had a return on equity of 14.58% and a net margin of 9.78%. The business had revenue of $1.12 billion during the quarter, compared to analyst estimates of $1.14 billion.

Here are the key takeaways from SkyWest's conference call:

• Third-quarter results were strong: SkyWest reported $120 million in net income, or $3.08 per diluted share, on $1.1 billion of revenue, while completing 99.9% of more than 230,000 flights.
• Fuel costs pressured the prorate business. Prorate fuel expense rose to $66 million from $34 million a year earlier as the average fuel price increased to $4.56 per gallon; management said higher yields are offsetting only part of the increase.
• SkyWest expects 2026 block hours to increase approximately 5%, with full-year EPS around $10.60, but is assuming fourth-quarter fuel costs of $4.90 per gallon. For 2027, block hours are expected to rise 1%–2% and EPS to be similar to 2026.
• The company is continuing its fleet renewal and expansion. SkyWest expects to receive 18 new E175s in 2027, reach roughly 300 E175s by year-end 2027, and deploy CRJ450 aircraft later this year, supporting longer-term cash earnings and an all-dual-class fleet.
• Management emphasized balance-sheet strength and capital flexibility, citing $1 billion of debt reduction since the end of 2022, more than $1.5 billion of unpledged assets, $238 million remaining under its buyback authorization, and planned 2027 capital expenditures of approximately $825 million.

SkyWest Price Performance

Shares of SKYW traded up $1.27 during trading hours on Thursday, reaching $96.54. 252,939 shares of the stock traded hands, compared to its average volume of 358,169. The company has a current ratio of 0.57, a quick ratio of 0.46 and a debt-to-equity ratio of 0.59. SkyWest has a 52-week low of $77.89 and a 52-week high of $117.72. The company's 50-day moving average price is $96.94 and its two-hundred day moving average price is $96.23. The company has a market cap of $3.75 billion, a P/E ratio of 9.60, a price-to-earnings-growth ratio of 1.35 and a beta of 1.47.

Insiders Place Their Bets

In other SkyWest news, insider Wade Steel sold 22,000 shares of the stock in a transaction on Monday, August 3rd. The stock was sold at an average price of $111.44, for a total value of $2,451,680.00. Following the completion of the sale, the insider owned 55,438 shares in the company, valued at approximately $6,178,010.72. This represents a 28.41% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through the SEC website. Corporate insiders own 1.50% of the company's stock.

Wall Street Analyst Weigh In

Several equities research analysts recently commented on the company. The Goldman Sachs Group cut SkyWest from a "buy" rating to a "neutral" rating and dropped their price objective for the company from $126.00 to $115.00 in a research report on Thursday, July 2nd. Cantor Fitzgerald set a $116.00 price objective on SkyWest in a report on Friday, October 2nd. Weiss Ratings reissued a "hold (c+)" rating on shares of SkyWest in a research report on Wednesday, October 14th. Finally, TD Cowen lowered their target price on shares of SkyWest from $123.00 to $116.00 and set a "buy" rating on the stock in a research note on Friday, October 2nd. One investment analyst has rated the stock with a Buy rating and four have assigned a Hold rating to the stock. According to MarketBeat, the company presently has a consensus rating of "Hold" and an average target price of $113.00.

SkyWest announced that its Board of Directors has approved a stock buyback plan on Thursday, July 23rd that permits the company to buy back $250 million in shares. This buyback authorization permits the transportation company to purchase up to 6.6% of its stock through open market purchases. Stock buyback plans are usually a sign that the company's management believes its stock is undervalued.

About SkyWest

SkyWest, Inc NASDAQ: SKYW is an airline holding company that operates regional passenger air service in the United States. Its primary subsidiary, SkyWest Airlines, connects smaller and midsized communities with larger airline hubs and provides scheduled flights under capacity-purchase agreements with major airline partners.

SkyWest Airlines operates flights under the United Express, Delta Connection and Alaska Airlines brands, serving destinations throughout the United States and select locations in Canada, Mexico and the Bahamas.

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