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By Ted Reed
TheStreet.com Staff Reporter
11/21/2006 2:23 PM EST
Click here for more stories by Ted Reed
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Mesa Air Group (MESA - commentary - Cramer's Take - Rating) said earnings for the latest quarter dropped due to unexpected costs for engine overhauls and pilot training.
The Phoenix-based commuter carrier said it earned $4.8 million, or 12 cents per share, in the quarter ended Sept. 30. Analysts polled by Thomson Financial had expected per-share earnings of 23 cents.
Year-earlier net income was $15 million, or 36 cents per share. Revenue was $362.5 million, up 17.3%, primarily from increased fuel-cost reimbursements.
"Out of our whole history, there have been only a couple of quarters we have missed [earnings estimates] ," said CEO Jonathan Ornstein on a conference call. "This has certainly been our biggest miss."
Unexpected one-time costs included $7.8 million for engine overhauls and $2.5 million for pilot training costs related to a contract with Delta Air Lines (DALRQ - commentary - Cramer's Take).
Mesa sought to provide Dash 8 aircraft to serve Delta's Kennedy hub, but encountered delays in ensuring that flight data recorders on the planes, moved from Canada, complied with U.S. regulations. "When you have 100 pilots trained and no aircraft for them, it becomes a very expensive proposition," Ornstein said.
The company also derived lower-than-expected revenue from its go! operation in Hawaii as competing carriers added capacity. Mesa provides about 8% of the capacity in its inter-island markets and carries about 10% of the traffic.
Additionally, Ornstein said negotiations with two Chinese carriers regarding Mesa flying in China are proceeding rapidly, and that flights could begin next year. During the quarter, Mesa's revenue per available seat mile was 15.4 cents, up 20%, while cost per available seat mile, excluding fuel, was 9.2 cents, an 18% increase.
Mesa's next grand adventure!!
TheStreet.com Staff Reporter
11/21/2006 2:23 PM EST
Click here for more stories by Ted Reed
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Mesa Air Group (MESA - commentary - Cramer's Take - Rating) said earnings for the latest quarter dropped due to unexpected costs for engine overhauls and pilot training.
The Phoenix-based commuter carrier said it earned $4.8 million, or 12 cents per share, in the quarter ended Sept. 30. Analysts polled by Thomson Financial had expected per-share earnings of 23 cents.
Year-earlier net income was $15 million, or 36 cents per share. Revenue was $362.5 million, up 17.3%, primarily from increased fuel-cost reimbursements.
"Out of our whole history, there have been only a couple of quarters we have missed [earnings estimates] ," said CEO Jonathan Ornstein on a conference call. "This has certainly been our biggest miss."
Unexpected one-time costs included $7.8 million for engine overhauls and $2.5 million for pilot training costs related to a contract with Delta Air Lines (DALRQ - commentary - Cramer's Take).
Mesa sought to provide Dash 8 aircraft to serve Delta's Kennedy hub, but encountered delays in ensuring that flight data recorders on the planes, moved from Canada, complied with U.S. regulations. "When you have 100 pilots trained and no aircraft for them, it becomes a very expensive proposition," Ornstein said.
The company also derived lower-than-expected revenue from its go! operation in Hawaii as competing carriers added capacity. Mesa provides about 8% of the capacity in its inter-island markets and carries about 10% of the traffic.
Additionally, Ornstein said negotiations with two Chinese carriers regarding Mesa flying in China are proceeding rapidly, and that flights could begin next year. During the quarter, Mesa's revenue per available seat mile was 15.4 cents, up 20%, while cost per available seat mile, excluding fuel, was 9.2 cents, an 18% increase.
Mesa's next grand adventure!!
