Phoenix-based Mesa Air Group, Inc. (MESA) on Monday reported a profit in its second quarter, compared to a loss last year, helped mainly by one-time benefit on settlement with Hawaiian Airlines and lower charges and operating expenses. However, excluding one-time items, the company reported loss for the quarter. A decline in passenger numbers resulted in 2.8% drop in quarterly load factor.
The scheduled passenger and airfreight services provider's second-quarter net income was $9.4 million or $0.29 per share, compared to a loss of $24.0 million or $0.75 per share in the year-ago quarter.
The latest year quarter results included loss from discontinued operations of $8.04 million or $0.22 per share, wider than loss of $1.35 million or $0.04 per share last year.
Net profit from continuing operations was $17.46 million or $0.51 per share, compared to a net loss of $22.63 million or $0.71 per share for the same period of fiscal 2007.
The 2008-results included net gain on securities of $1.87 million, gain on re-purchase of convertible debt of $4.53 million, costs associated with the return of aircraft and engines of $3.28 million, and benefit as a result of a negotiated settlement with Hawaiian Airlines of $21.01 million, among other items. Meanwhile, prior-year results included net loss on securities of $5.04 million, and impairment charges of $23.45 million.
Excluding items, the company slipped to pro forma net loss of $4.08 million or $0.15 per share from pro forma profit of $5.85 million or $0.16 per share in the year-ago quarter. On average, three analysts polled by First Call/Thomson Financial expected a loss of $0.05 per share for the second quarter.
Total gross operating revenues declined to $320.33 million from $321.64 million last year, mainly due to decline in passenger revenues. Adjusting prior year's impairment of contract incentives, net operating revenues increased 8.1% to $320.33 million from $296.32 million in the same quarter last year.
Operating income was $27.68 million, compared to operating loss of $23.48 million in 2007. The turn around was due to fall in total operating expenses to $292.65 million from $319.80 million a year ago.
Number of passengers declined to 3.27 million from last year's 3.87 million. In the second quarter, total Available Seat Miles, or ASM's, decreased 10.4% from last year, mainly due to a decrease in the number of aircraft flown to 178 as of March 31, 2008 from 201 as of March 31, 2007. Revenue passenger miles, or RPMs, were 1.43 billion, lower than 1.66 billion a year ago. Load factor in the quarter fell to 72% from 74.8% in the previous year.
As of March 31, 2008, Mesa's operating fleet was comprised of 84 50-seat regional jets, 41 86-seat regional jets, two 76-seat regional jets and 20 66-seat regional jets, 16 37-seat turboprops, and 15 19-seat turboprops.
Mesa Air Group Chairman and CEO, Jonathon Ornstein commented, "During the second quarter we resolved a number of important issues. However, there remain many significant challenges to overcome both here at Mesa and with the industry."
For the first six months ended March 31, the company's net income was $5.21 million or $0.19 per share, compared to loss of $15.97 million or $0.49 per share a year ago. Net income from continuing operations was $14.71 million or $0.45 per share, while prior year's loss from continuing operations was $13.75 million or $0.42 per share.
The company's year-to-date pro forma loss was $4.22 million or $0.15 per share, compared to last year's profit of $14.81 million or $0.38 per share. First-half net operating revenues grew to $646.92 million from $629.85 million in the previous year.
MESA closed Friday's regular trading session at $0.45, down $0.02, on a volume of 280 thousand shares. In the pre-market activity, shares edged down $0.0050 or 1.06% to $0.4650.
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