Spirit Airlines (SAVE), a provider of low-fare airline services, has recorded a 54.15 percent surge in profit for the quarter ended Jun. 30, 2014. The company earned $64.85 million or $0.88 a share in the second-quarter compared with $42.07 million or $0.58 a share a year ago. Adjusted non-GAAP earnings per share came in at $0.91 a share when analysts expected $0.87 a share.
Revenue during the second-quarter rose 22.59 percent to $499.34 million from $407.34 million in the last year period.
Gross margin expanded by 278 basis points over the last year period to 50.31 percent. Total expenses as a percentage of revenues decreased to 78.94 percent from 83.61 percent in the same period last year. That has resulted in improvement of 467 basis points in operating margins to 21.06 percent.
The company posted operating income of $105.14 million, compared with $66.76 million in the previous year period.
''The Spirit team delivered another strong quarter. While growing our capacity 17.2 percent year over year, we grew our top line 22.6 percent year over year,'' said Ben Baldanza, Spirit's chief executive officer. ''Our efforts to drive operational excellence have produced material improvements in controllable components of our cost structure which contributed to the 3.5 percentage point year-over-year increase in our Adjusted Operating Margin. I want to thank all our team members that contributed to these excellent results."
"A few months ago, we launched a series of initiatives aimed at better aligning our customers' expectations with the Spirit business model. We are very encouraged at the early results of this effort, and the Bare Fare(TM) plus Frill Control(TM) messaging is resonating well with customers as they see the benefit of only paying for what they truly value. As we continue down this path, we expect ever increasing alignment to a business model that provides the lowest total fares and the highest consumer choice all while maintaining our commitment to deliver value to our customers and to our shareholders,'' Baldanza said.
Cash Flow
Spirit Airlines has generated cash of $144.14 million from operating activities during the first half, up 7.36 percent or $9.88 million when compared with the last year period. The company has generated 15.38 cents of operating cash flow in every sales dollar for the first half, down from 17.26 cents in the same period last year.
The company has spent $101.44 million cash to meet investing activities during the first half, as against cash outgo of $33.56 million in the last year period. It has made net capital expenditure of $101.44 million during the first half, which was higher by 202.23 percent or $67.88 million, from a year ago.
The company's free cash flow accounted for 29.62 percent of operating cash flow for the first half, compared with 75 percent in the last year period.
The company has spent $6.09 million from financing activities during the first half, as against cash inflow of $7.39 million in the last year period. It has made net repayment of $0.51 million debt during the first half. It has spent net of $1.16 million on repurchase of common stocks.
As on Jun. 30, 2014, the company's cash balance stood at $567.24 million, up 8.07 percent or $42.33 million from Jun. 30, 2013.
Working Capital
Spirit Airlines has witnessed a decline in the working capital over the last one year. The company's working capital stood at $287.92 million as at Jun. 30, 2014, down $8.29 million or 2.80 percent from $296.21 million on Jun. 30, 2013. It registered a decrease in current ratio to 1.72 as at Jun. 30, 2014 from 1.78 on Jun. 30, 2013.
Shares of the company declined $1.18 a share or 1.74 percent to close at $66.54 on Tuesday.
