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Hawaiian Holdings Inc Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: July 29, 2009 12:01PM
Hawaiian Holdings Inc (HA) filed Quarterly Report for the period ended 2009-06-30. Hawaiian Holdings is a holding company of Hawaiian Airlines. Hawaiian Airlines is the largest airline headquartered in Hawaii. They are engaged primarily in the scheduled transportation of passengers cargo and mail. Scheduled passenger service consists of daily service between Hawaii and Las Vegas Nevada and the four key United States West Coast gateway cities of Los Angeles and San Francisco California Seattle Washington and Portland Oregon; daily service among the major islands of Hawaii; and bi-weekly service to Pago Pago American Samoa Papeete and Tahiti. Hawaiian Holdings Inc has a market cap of $326.7 million; its shares were traded at around $6.33 with a P/E ratio of 7.3 and P/S ratio of 0.3.
Highlight of Business Operations:
· $27.5 million in net income or $0.53 net income per diluted share for the quarter.
· Operating income of $31.7 million, compared to $48.5 million in the second quarter of 2008 (which included the benefit of a $52.5 million litigation settlement)
During the three months ended June 30, 2009, we recognized net income of $27.5 million on operating income of $31.7 million, compared to net income of $54.3 million and operating income of $48.5 million for the same three-month period in 2008, which prior year period included a $52.5 million litigation settlement with Mesa Air Group, Inc. (Mesa). The significant differences between income and expense items for the three months ended June 30, 2009 and 2008 are discussed below.
Operating Revenue. Operating revenue was $292.0 million for the three months ended June 30, 2009, a 8.5% decrease over operating revenue of $319.2 million for the same three-month period in 2008 due to a decrease in passenger revenue, primarily resulting from decreased yields (Revenue per Revenue Passenger Mile). The decrease in our passenger revenue was partially offset by increases in our cargo and other revenue. The detail of the change in passenger revenue is described in the table below.
Operating Expenses. Operating expenses were $260.3 million for the three months ended June 30, 2009, a $10.4 million decrease from operating expenses of $270.7 million for the comparable three-month period in 2008. The decrease in our operating expenses was due to a 56% decrease in the cost of aircraft fuel which was offset by the litigation settlement of $52.5 million recognized in the prior year period.
During the three months ended June 30, 2009, our fuel derivatives were not designated for hedge accounting under SFAS No. 133 and were marked to fair value. As such, $6.5 million of net gains from our fuel hedging activities were not recorded as part of Aircraft fuel expense in operating activities, but rather as nonoperating income/expense. Included in this amount are losses realized during the period of $0.2 million, a reversal of $3.2 million of unrealized losses recognized in prior periods for contracts which settled in the current period and $3.5 million of unrealized gains recognized in the current period for derivative contracts settling in future periods.
Stocks Discussed: HA,