SKYW
$15.83
Skywest
($.68)
(4.12%)
Earnings Details
2nd Quarter June 2022
Thursday, July 28, 2022 4:01:00 PM
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Summary

Skywest (SKYW) Recent Earnings

Skywest (SKYW) reported 2nd Quarter June 2022 earnings of $1.07 per share on revenue of $799.1 million. The consensus earnings estimate was $0.48 per share on revenue of $746.8 million. Revenue grew 21.6% on a year-over-year basis.

SkyWest Inc, through its subsidiaries offers scheduled passenger service to destinations in the United States, Canada, Mexico and the Caribbean.

Results
Reported Earnings
$1.07
Earnings Whisper
-
Consensus Estimate
$0.48
Reported Revenue
$799.1 Mil
Revenue Estimate
$746.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

SkyWest, Inc. Announces Second Quarter 2022 Profit

Second Quarter 2022 Highlights

  • Pre-tax income of $73 million, net income of $54 million, or $1.07 per diluted share
  • Took delivery of six E175 aircraft for Alaska Airlines and two E175 aircraft for Delta Air Lines under previously announced agreements
  • Celebrated the 50-year anniversary of SkyWest’s founding

ST. GEORGE, Utah--(BUSINESS WIRE)--SkyWest, Inc. (NASDAQ: SKYW) (“SkyWest”) today reported financial and operating results for Q2 2022, including net income of $54 million, or $1.07 per diluted share, compared to a net income of $62 million, or $1.22 per diluted share, for Q2 2021.

Commenting on the results, Chip Childs, Chief Executive Officer of SkyWest, said, “The quarter results reflect the continued strong demand for our product and the impact of our improved fleet mix as we continue investing in our E175 fleet. As we work through the constraints of an ongoing pilot imbalance and industry-wide staffing challenges, demand for our product remains exceptionally strong. I want to thank our people for their dedicated, world-class efforts.”

Financial Results

Revenue was $799 million in Q2 2022, up $142 million or 22%, from $657 million in Q2 2021. This quarter’s increase in revenue under SkyWest’s flying contracts came from adding 43 aircraft to its operations since Q2 2021, with the remaining revenue increase largely due to COVID-19 revenue concessions given to our major airline partners in Q2 2021.

Operating expenses were $710 million in Q2 2022, up 31% from $542 million in Q2 2021. The increase in operating expenses was primarily due to $114 million in payroll support program grants received from U.S. Treasury reflected as an offset to Q2 2021 operating expenses and operating costs from aircraft added to SkyWest’s fleet since Q2 2021.

Capital and Liquidity

SkyWest had $975 million in cash and marketable securities at June 30, 2022, up from $856 million at March 31, 2022 and $860 million at December 31, 2021.

Total debt at June 30, 2022 was $3.3 billion, up from $3.2 billion at March 31, 2022, reflecting the financing of eight new E175 aircraft delivered in Q2 2022. Capital expenditures during Q2 2022 were $197 million for the purchase of eight E175s and other fixed assets.

Status Update on Previously Announced Agreements

SkyWest is coordinating with its major airline partners to optimize the timing of upcoming fleet deliveries under previously announced agreements. SkyWest expects to finance the future E175 deliveries discussed below through debt. The anticipated future delivery dates summarized below are based on currently available information and are subject to change.

Flying contract with American for 20 E175 aircraft

  • 18 aircraft were delivered in 2021 and two deliveries are expected in Q3 2022.
  • 15 aircraft were placed into service during Q1 and Q2 2022 and five aircraft are expected to be placed into service by the end of 2022.

Flying contract with Delta for 16 E175 aircraft

  • Two aircraft were delivered in Q2 2022.
  • 14 aircraft deliveries are anticipated in the second half of 2022.

Flying contract with Alaska for 11 E175 aircraft

  • Six aircraft were delivered in Q2 2022. Four aircraft were delivered in Q1 2022 and the remaining one aircraft delivery is expected in the first half of 2023.

Combined, SkyWest anticipates placing 47 E175 aircraft into service under these three previously announced agreements by early 2023. As of June 30, 2022, 30 aircraft were delivered and 17 aircraft have deliveries scheduled through early 2023. By mid-2023, SkyWest is scheduled to operate a total of 240 E175 aircraft.

About SkyWest

SkyWest, Inc. is the holding company for SkyWest Airlines and SkyWest Leasing, an aircraft leasing company. SkyWest Airlines has a fleet of over 500 aircraft connecting passengers to over 230 destinations throughout North America. SkyWest Airlines operates through partnerships with United Airlines, Delta Air Lines, American Airlines and Alaska Airlines carrying more than 36 million passengers in 2021.

SkyWest will host its conference call to discuss its second quarter 2022 results today, July 28, 2022, at 2:30 p.m. Mountain Time. The conference call number is 1-888-440-4038 for domestic callers, and 1-646-960-0861 for international callers. Please call up to ten minutes in advance to ensure you are connected prior to the start of the call. The conference call will also be available live on the Internet at https://events.q4inc.com/attendee/854452725.This press release and additional information regarding SkyWest, including access information for the digital rebroadcast of the second quarter 2022 results call, participation at investor conferences and investor presentations can be accessed at inc.skywest.com.

Forward Looking-Statements

In addition to historical information, this release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “forecasts,” "expects," "intends," "believes," "anticipates," “estimates,” "should," "likely" and similar expressions identify forward-looking statements. Such statements include, but are not limited to, statements about the impact of the COVID-19 pandemic on SkyWest’s business, financial condition and results of operations, the scheduled aircraft deliveries for SkyWest in upcoming periods, including the return to pre-COVID production levels and expected timing thereof, expected production levels in 2022 and associated staffing challenges, SkyWest’s coordination with major airline partners to optimize the delivery of aircraft under previously announced agreements, the expected terms, timing and benefits related to SkyWest’s leasing and joint venture transactions, as well as SkyWest’s future financial and operating results, plans, objectives, expectations, estimates, intentions and outlook, and other statements that are not historical facts. All forward-looking statements included in this release are made as of the date hereof and are based on information available to SkyWest as of such date. SkyWest assumes no obligation to update any forward-looking statements unless required by law. Readers should note that many factors could affect the future operating and financial results of SkyWest and could cause actual results to vary materially from those expressed in forward-looking statements set forth in this release. These factors include, but are not limited to, uncertainties regarding the impact of the funding received under the U.S. Treasury Department’s payroll support programs on SkyWest’s business and operations, the continued uncertainty of the duration, scope and impact of COVID-19, a further spread or worsening of COVID-19, and other potential future outbreaks of infectious diseases or other health concerns, the consequences of the COVID-19 pandemic to economic conditions, the travel industry and our major partners in general and the financial condition and operating results of SkyWest in particular, the prospects of entering into agreements with existing or other carriers to fly new aircraft, ongoing negotiations between SkyWest and its major partners regarding their contractual obligations, uncertainties regarding operation of new aircraft, the ability to attract and retain qualified pilots and related staffing challenges, the impact of regulatory issues such as pilot rest rules and qualification requirements, and the ability to obtain aircraft financing.

Actual operational and financial results of SkyWest will likely also vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of other reasons, including, in addition to those identified above: the existing global COVID-19 pandemic and the outbreak of any other disease or similar public health threat that affects travel demand or travel behavior; the challenges of competing successfully in a highly competitive and rapidly changing industry; developments associated with fluctuations in the economy and the demand for air travel, including related to the duration and impact of the COVID-19 pandemic, and related decreases in customer demand and spending; the financial stability of SkyWest’s major partners and any potential impact of their financial condition on the operations of SkyWest; uncertainty regarding ongoing hostility between Russia and the Ukraine and the related impacts on macroeconomic conditions and on the international operations of any of our major airline partners as a result of such conflict; fluctuations in flight schedules, which are determined by the major partners for whom SkyWest conducts flight operations; variations in market and economic conditions; significant aircraft lease and debt commitments; estimated useful life of long-lived assets, residual aircraft values and related impairment charges; labor relations and costs; the impact of global instability; rapidly fluctuating fuel costs, and potential fuel shortages; the impact of weather-related or other natural disasters on air travel and airline costs; aircraft deliveries; and other unanticipated factors. Risk factors, cautionary statements and other conditions which could cause SkyWest’s actual results to differ materially from management’s current expectations are contained in SkyWest’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Additionally, the risks, uncertainties and other factors set forth above or otherwise referred to in the reports that the Company files with the Securities and Exchange Commission may be further amplified by the global impact of the COVID-19 pandemic.

 

SkyWest, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(Dollars and Shares in Thousands, Except per Share Amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

June 30,

 

June 30,

 

 

2022

 

2021

 

2022

 

2021

OPERATING REVENUES:

 

 

 

 

 

 

 

 

Flying agreements

 

$

773,774

 

 

$

632,967

 

 

$

1,481,837

 

 

$

1,144,158

 

Lease, airport services and other

 

 

25,311

 

 

 

24,023

 

 

 

52,400

 

 

 

47,387

 

Total operating revenues

 

 

799,085

 

 

 

656,990

 

 

 

1,534,237

 

 

 

1,191,545

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

 

288,562

 

 

 

233,423

 

 

 

588,620

 

 

 

453,265

 

Aircraft maintenance, materials and repairs

 

 

174,883

 

 

 

190,879

 

 

 

323,296

 

 

 

394,706

 

Depreciation and amortization

 

 

97,249

 

 

 

109,895

 

 

 

199,994

 

 

 

219,492

 

Aircraft fuel

 

 

31,820

 

 

 

25,867

 

 

 

56,910

 

 

 

45,061

 

Airport-related expenses

 

 

17,490

 

 

 

22,038

 

 

 

36,695

 

 

 

46,486

 

Aircraft rentals

 

 

16,024

 

 

 

15,723

 

 

 

32,020

 

 

 

31,213

 

Payroll support grant

 

 

 

 

 

(114,144

)

 

 

 

 

 

(307,317

)

Other operating expenses

 

 

84,455

 

 

 

58,286

 

 

 

156,052

 

 

 

112,774

 

Total operating expenses

 

 

710,483

 

 

 

541,967

 

 

 

1,393,587

 

 

 

995,680

 

OPERATING INCOME

 

 

88,602

 

 

 

115,023

 

 

 

140,650

 

 

 

195,865

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

Interest income

 

 

2,559

 

 

 

210

 

 

 

2,984

 

 

 

494

 

Interest expense

 

 

(30,433

)

 

 

(33,940

)

 

 

(59,025

)

 

 

(65,294

)

Other income, net

 

 

12,019

 

 

 

80

 

 

 

12,899

 

 

 

296

 

Total other expense, net

 

 

(15,855

)

 

 

(33,650

)

 

 

(43,142

)

 

 

(64,504

)

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAXES

 

 

72,747

 

 

 

81,373

 

 

 

97,508

 

 

 

131,361

 

PROVISION FOR INCOME TAXES

 

 

18,796

 

 

 

19,379

 

 

 

25,823

 

 

 

33,467

 

NET INCOME

 

$

53,951

 

 

$

61,994

 

 

$

71,685

 

 

$

97,894

 

 

 

 

 

 

 

 

 

 

BASIC EARNINGS PER SHARE

 

$

1.07

 

 

$

1.23

 

 

$

1.42

 

 

$

1.95

 

DILUTED EARNINGS PER SHARE

 

$

1.07

 

 

$

1.22

 

 

$

1.42

 

 

$

1.93

 

 

 

 

 

 

 

 

 

 

Weighted average common shares:

 

 

 

 

 

 

 

 

Basic

 

 

50,522

 

 

 

50,346

 

 

 

50,501

 

 

 

50,316

 

Diluted

 

 

50,566

 

 

 

50,725

 

 

 

50,637

 

 

 

50,727

  

 

SkyWest, Inc. and Subsidiaries

Summary of Consolidated Balance Sheets

(Dollars in Thousands)

(Unaudited)

 

 

 

 

 

June 30,

 

December 31,

 

2022

 

2021

Cash and marketable securities

$

974,679

 

$

860,410

Other current assets

 

242,205

 

 

208,183

Total current assets

 

1,216,884

 

 

1,068,593

 

 

 

 

Property and equipment, net

 

5,468,163

 

 

5,373,635

Deposits on aircraft

 

91,813

 

 

124,964

Other long-term assets

 

559,787

 

 

558,755

Total assets

$

7,336,647

 

$

7,125,947

 

 

 

 

Current portion, long-term debt

$

424,998

 

$

391,798

Other current liabilities

 

773,415

 

 

802,823

Total current liabilities

 

1,198,413

 

 

1,194,621

 

 

 

 

Long-term debt, net of current maturities

 

2,864,483

 

 

2,717,420

Other long-term liabilities

 

928,720

 

 

946,392

Stockholders' equity

 

2,345,031

 

 

2,267,514

Total liabilities and stockholders' equity

$

7,336,647

 

$

7,125,947

 

SkyWest, Inc. and Subsidiaries

Additional Operational Information (unaudited)

SkyWest’s fleet in scheduled service or under contract by aircraft type:

 

 

June 30, 2022

 

December 31, 2021

 

June 30, 2021

E175 aircraft

 

223

 

211

 

193

CRJ900 aircraft

 

44

 

44

 

40

CRJ700 aircraft

 

114

 

114

 

104

CRJ200 aircraft

 

140

 

140

 

141

Total aircraft in service or under contract

 

521

 

509

 

478

As of June 30, 2022, SkyWest leased 35 CRJ700s and five CRJ900s to third parties (these aircraft are excluded from the table above). The E175 aircraft counts are based on delivery date.

Selected operational data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended June 30,

 

For the six months ended June 30,

Block hours by aircraft type:

 

2022

 

 

2021

 

 

% Change

 

2022

 

 

2021

 

 

% Change

E175s

 

165,224

 

 

149,226

 

 

10.7

%

 

311,401

 

 

277,724

 

 

12.1

%

CRJ900s

 

27,479

 

 

29,713

 

 

(7.5)

%

 

53,334

 

 

53,719

 

 

(0.7)

%

CRJ700s

 

72,120

 

 

73,380

 

 

(1.7)

%

 

139,998

 

 

136,475

 

 

2.6

%

CRJ200s

 

69,930

 

 

71,726

 

 

(2.5)

%

 

141,013

 

 

132,309

 

 

6.6

%

Total block hours

 

334,753

 

 

324,045

 

 

3.3

%

 

645,746

 

 

600,227

 

 

7.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Departures

 

199,678

 

 

185,498

 

 

7.6

%

 

375,889

 

 

340,392

 

 

10.4

%

Passengers carried

 

11,124,468

 

 

9,301,873

 

 

19.6

%

 

19,911,835

 

 

15,010,462

 

 

32.7

%

Adjusted flight completion

 

99.9

%

 

99.9

%

 

pts

 

99.4

%

 

99.9

%

 

(0.5)

pts

Raw flight completion

 

99.1

%

 

99.5

%

 

(0.4)

pts

 

97.7

%

 

98.5

%

 

(0.8)

pts

Passenger load factor

 

86.0

%

 

76.4

%

 

9.6

pts

 

82.1

%

 

67.6

%

 

14.5

pts

Average trip length

 

491

 

 

533

 

 

(7.9)

%

 

503

 

 

536

 

 

(6.2)

%

Adjusted flight completion percent excludes weather cancellations. Raw flight completion includes weather cancellations.

Investor Relations
435.634.3200
Investor.relations@skywest.com

Corporate Communications
435.634.3553
corporate.communications@skywest.com

Source: SkyWest, Inc.