Why Shares of Spirit Airlines Dropped 11% in July
Shares of Spirit Airlines (NYSE: SAVE) fell 11.1% in July, according to data provided by S&P Global Market Intelligence, as investors ran for the exits after the discount airline provided third-quarter guidance that was well below expectations. There's a case to be made that the factors leading to the forecast cut were temporary, but investors would apparently rather watch this story play out from the terminal.
Shares of Spirit Airlines, a no-frills discounter that offers low fares and charges for perks that other airlines offer for free, were on autopilot through the first half of July, trading up almost 16% for the month prior to the airline's July 24 earnings announcement. Spirit grew revenue by 18.9% year over year in the quarter and beat the consensus analyst earnings estimate by $0.04 per share, but the stock plunged due to management's commentary on the third quarter.
A Spirit Airlines A319. Image source: Spirit Airlines.
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