No wonder they don't want us to get the loan.
Frontier on course for $5.4M loss
High fuel prices, weak sales could end profitable string
By David Kesmodel, Rocky Mountain News
May 27, 2004
Frontier Airlines is expected today to end a string of three profitable quarters by posting a loss that one analyst said might top $5 million and disappoint Wall Street.
Citing high fuel prices and weaker-than-expected sales, analysts on average have been projecting a net loss of about $1 million, or 3 cents a share, for the three months ended March 31.
J.P. Morgan analyst Jamie Baker said Wednesday he expects Frontier to record a net loss of $5.4 million after reviewing financial results the Denver- based discounter filed recently with the U.S. Department of Transportation.
In the filing, dated May 12, Frontier said its net loss in its fiscal fourth quarter was $5.4 million, or about 14 cents a share.
Baker said "Form 41" Transportation Department filings can differ from results reported under generally accepted accounting principles, or GAAP, by excluding one- time gains or charges. But he said he didn't expect any one-time items in the results Frontier will post today.
"We believe Frontier's net loss will reach $5.4 million," he said in a report to investors.
Frontier's filings with the Transportation Department have matched results reported under GAAP in seven of the previous eight quarters, he said.
Frontier spokesman Joe Hodas stressed that the numbers submitted to the Transportation Department are "preliminary and unaudited." He wouldn't comment further.
Baker had been projecting that Frontier would break even in the January-March quarter.
A year earlier, the airline recorded a company-record loss of $13 million as it suffered from Denver's worst blizzard in years.
A loss in the latest period would be the fifth in the past nine quarters for Frontier, which ranks second after UAL Corp.'s United Airlines in the number of passengers served at Denver International Airport.
"For a low-cost carrier, Frontier's grasp on profits is elusive at best," Baker said in his report.
Baker said Frontier's results since 2002 compare favorably with those of big hub carriers such as American. But other discounters have done better, with AirTran reporting only one quarterly loss since the beginning of 2002 and JetBlue and Southwest reporting none, he said.
"In the post-9/11 revenue environment, Frontier therefore appears capable of profit only when oil prices are low and/or UAL mismanagement is high," he said.
His comments followed a negative report Friday by Raymond James & Associates analyst Jim Parker.
Parker, who owns Frontier shares, cut his earnings estimates for each quarter of fiscal 2005, which began April 1. For the April-June quarter, he cut projected profits to 5 cents a share from 11 cents.
He said he made the cuts primarily because of the recent rise in crude oil prices to about $41 a barrel. Frontier hedged only 7 percent of its fuel needs for the first six months of 2004.
In addition to high fuel prices, analysts are concerned about Frontier's tough pricing competition and the possibility that United's new budget carrier, Ted, will wrest cost-conscious fliers from Frontier at DIA.
Frontier shares fell 10 cents, or 1 percent, to $9.55, Wednesday and are down 33 percent this year
Frontier on course for $5.4M loss
High fuel prices, weak sales could end profitable string
By David Kesmodel, Rocky Mountain News
May 27, 2004
Frontier Airlines is expected today to end a string of three profitable quarters by posting a loss that one analyst said might top $5 million and disappoint Wall Street.
Citing high fuel prices and weaker-than-expected sales, analysts on average have been projecting a net loss of about $1 million, or 3 cents a share, for the three months ended March 31.
J.P. Morgan analyst Jamie Baker said Wednesday he expects Frontier to record a net loss of $5.4 million after reviewing financial results the Denver- based discounter filed recently with the U.S. Department of Transportation.
In the filing, dated May 12, Frontier said its net loss in its fiscal fourth quarter was $5.4 million, or about 14 cents a share.
Baker said "Form 41" Transportation Department filings can differ from results reported under generally accepted accounting principles, or GAAP, by excluding one- time gains or charges. But he said he didn't expect any one-time items in the results Frontier will post today.
"We believe Frontier's net loss will reach $5.4 million," he said in a report to investors.
Frontier's filings with the Transportation Department have matched results reported under GAAP in seven of the previous eight quarters, he said.
Frontier spokesman Joe Hodas stressed that the numbers submitted to the Transportation Department are "preliminary and unaudited." He wouldn't comment further.
Baker had been projecting that Frontier would break even in the January-March quarter.
A year earlier, the airline recorded a company-record loss of $13 million as it suffered from Denver's worst blizzard in years.
A loss in the latest period would be the fifth in the past nine quarters for Frontier, which ranks second after UAL Corp.'s United Airlines in the number of passengers served at Denver International Airport.
"For a low-cost carrier, Frontier's grasp on profits is elusive at best," Baker said in his report.
Baker said Frontier's results since 2002 compare favorably with those of big hub carriers such as American. But other discounters have done better, with AirTran reporting only one quarterly loss since the beginning of 2002 and JetBlue and Southwest reporting none, he said.
"In the post-9/11 revenue environment, Frontier therefore appears capable of profit only when oil prices are low and/or UAL mismanagement is high," he said.
His comments followed a negative report Friday by Raymond James & Associates analyst Jim Parker.
Parker, who owns Frontier shares, cut his earnings estimates for each quarter of fiscal 2005, which began April 1. For the April-June quarter, he cut projected profits to 5 cents a share from 11 cents.
He said he made the cuts primarily because of the recent rise in crude oil prices to about $41 a barrel. Frontier hedged only 7 percent of its fuel needs for the first six months of 2004.
In addition to high fuel prices, analysts are concerned about Frontier's tough pricing competition and the possibility that United's new budget carrier, Ted, will wrest cost-conscious fliers from Frontier at DIA.
Frontier shares fell 10 cents, or 1 percent, to $9.55, Wednesday and are down 33 percent this year
