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Hawaiian Holdings Inc Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: October 22, 2009 11:05AM
Hawaiian Holdings Inc (HA) filed Quarterly Report for the period ended 2009-09-30. 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 $425.4 million; its shares were traded at around $8.79 with a P/E ratio of 5.9 and P/S ratio of 0.4.
Highlight of Business Operations:
· $30.7 million in net income or $0.58 net income per diluted share for the quarter
· Operating income of $23.7 million, compared to $27.3 million in the third quarter of 2008
During the three months ended September 30, 2009, we recognized net income of $30.7 million on operating income of $23.7 million, compared to net income of $6.0 million and operating income of $27.3 million for the same three-month period in 2008. The results for the three months ended September 30, 2009 reflects nonrecurring benefits to our income tax provision estimated at approximately $20.0 million. The significant differences between income and expense items for the three months ended September 30, 2009 and 2008 are discussed below.
Operating Revenue. Operating revenue was $305.6 million for the three months ended September 30, 2009, a 10.1% decrease compared to operating revenue of $339.9 million for the same three-month period in 2008 due to a decrease in passenger revenue, primarily resulting from decreased yields (Passenger 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 $281.9 million for the three months ended September 30, 2009, a $30.7 million decrease from operating expenses of $312.6 million for the comparable three-month period in 2008. The decrease in our operating expenses was due to a 47.9% decrease in the cost of aircraft fuel, partially offset by a 55.0% increase in the cost of maintenance materials and repairs and other expense categories as discussed below.
During the three months ended September 30, 2009, our fuel derivatives were not designated for hedge accounting under SFAS No. 133 [ASC 815] and were marked to fair value. As such, $3.3 million of net losses 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 gains realized during the period of $0.7 million, a reversal of $2.2 million of unrealized gains recognized in prior periods for contracts which settled in the current period, and $1.8 million of unrealized losses recognized in the current period for derivative contracts settling in future periods.
Stocks Discussed: HA,