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Earnings Results: Frontier Air swings to a GAAP profit, but sees fewer bookings amid COVID spike

Frontier Group Holdings Inc. shares were little changed in extended trading Wednesday after the parent company of ultra-low-cost air carrier Frontier Airlines reported its first quarterly GAAP profit as a public company, but said bookings have softened recently thanks to the spike in COVID-19 cases.

Frontier
ULCC,
-3.48%

said it earned $19 million, or 8 cents a share, in the second quarter, compared with $17 million, or 8 cents a share, in the year-ago period. Frontier went public in March.

Adjusted for one-time items, the company lost 24 cents a share. Revenue rose 184% to $550 million, from $194 million, thanks to the heightened demand for leisure travel, the company said.

Analysts polled by FactSet expected Frontier to report a GAAP loss of 6 cents a share on revenue of $538 million. The adjusted loss for the quarter was pegged at 30 cents a share.

Frontier tweaked its guidance for the third quarter to breakeven at the top of a range, saying it noted “softening” in bookings in the last week, which it believes is related to the spike in COVID-19 cases and the delta variant.

“The impact of the delta variant on bookings, and the duration of that impact, are difficult to predict,” the airline said. It called for net income between breakeven and a loss margin of up to 5%.

“We are confident that as cases decline we will see a positive impact on forward bookings,” Frontier said.

The company said it ended the quarter with $936 million of cash and equivalents, the highest balance in its history.

The stock ended the regular trading day down 3.5%. Frontier shares have lost 27% in the past three months, contrasting with gains of 6% for the S&P 500 index
SPX,
-0.46%

in the same period.

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