Airline stocks and sector-related ETF took flight after fourth quarter results showed airliners continued to generate robust profits on strong consumer demand and hinted at an improving outlook ahead.
The U.S. Global Jets ETF (NYSEArca: JETS), the only available pure-play fund that focuses on the global aviation industry, rose 2.5% on Tuesday and was testing both its short-term resistance at the 50-day simple moving average.
Southwest Airlines (LUV) revealed better-than-expected results on both earnings and revenue for the three months ended 2018, despite concerns over higher fuel and labor costs, The Motley Fool reports.
“Passenger demand is healthy,” Southwest said, forecasting “first quarter 2019 RASM to increase in the four to five percent range.”
LUV shares increased 6.3% on Thursday.
American Airlines Group (AAL) showed better-than-expected earnings but revenue that was a hair short of expectations.
“We enter 2019 with great momentum. We are intent upon running the most reliable operation in our post-merger history, pursuing high margin growth opportunities at our most profitable hubs, and executing on a number of valuable revenue and cost saving initiatives. We expect our total revenue per available seat mile to grow faster than our network competitors, and to deliver strong pre-tax earnings growth in 2019. At the midpoint of our guidance, 2019 diluted earnings per share excluding special items would increase approximately 40 percent versus 2018,” Chairman and CEO Doug Parker said.
AAL shares gained 6.4%.
JetBlue Airways (JBLU) also revealed double-digit revenue growth and pre-tax margin expansion, with earnings per share rising more than 50% year-over-year. The carrier also offered an optimistic outlook ahead.
“We expect 2019 will be a stepping stone year to deliver on our 2020 goals, and to further improvements beyond 2020. We expect to see margin expansion resulting from our network reallocation, ancillary revenue initiatives, improvements to our fleet and our progress in better controlling our costs. We remain confident in our ability to execute on our building blocks and achieve our $2.50 to $3.00 EPS target in 2020,” President Joanna Geraghty said.
JBLU added 5.1% on Thursday.
JETS include a 12.0% position in Southwest Airlines, 11.7% in American Airlines Group and 3.9% in JetBlue.
For more information on the airline ETF, visit our Airline category.