Sun Country Airlines Holdings Inc
Q1 2025 Earnings
Market Reaction
Did SNCY Beat Earnings? Q1 2025 Results
Sun Country Airlines delivered a modest earnings beat in the first quarter of 2025, posting adjusted diluted EPS of $0.72 against a consensus estimate of $0.70, a 3.31% positive surprise, even as revenue of $326.65 million came in fractionally below expectations and reflected a divergence across its three business lines. Total revenue grew 4.9% year-over-year, but the headline figure masked weakness in scheduled service, where TRASM declined 4.7% and load factor fell 3.9 percentage points amid soft off-peak demand in February. The real story was the strength of charter and cargo, with charter revenue climbing 15.6% to $54.69 million and cargo revenue jumping 17.6% to $28.16 million, partly fueled by new Amazon contract rates. Management's proactive capacity reallocation toward cargo ahead of the demand softness cushioned the blow. Looking to the second quarter, the company guides total revenue of $250 million to $260 million and an operating margin of 4% to 7%, while planning to expand its cargo fleet to 20 aircraft by the end of Q3. The quarter also brought a notable leadership shift, with the resignation of President and CFO Dave Davis adding an element of organizational uncertainty to the outlook.
- Diversified business model with charter and cargo offsetting weaker scheduled service demand
- Cargo revenue grew 17.6% driven by annual rate escalation and new Amazon contract rates
- Charter revenue grew 15.6%, exceeding charter block hour growth of 10.7%
- Lower fuel costs (fuel cost per gallon declined 11.6% to $2.66)
- System block hours grew 5.8% year-over-year
- Scheduled service ASMs grew 6.7% while load factor declined 3.9 percentage points
“Sun Country is pleased to report our eleventh consecutive profitable quarter with GAAP EPS of $0.66 and adjusted diluted EPS of $0.72. Despite the challenging scheduled revenue environment, we delivered $327 million of total revenue, our highest quarterly total, along with $56 million of GAAP operating income and $60 million of adjusted operating income, also a quarterly record. Robust growth in our charter and cargo businesses helped offset lower than expected scheduled service revenue, demonstrating the effectiveness of our diversified business model. As a result, we were able to produce a GAAP operating margin of 17.2% and adjusted operating margin of 18.3% which was higher than last year. In addition to our excellent performance, our board of directors has approved a $25 million share repurchase authorization. As always, we want to thank our employees for their hard work and dedication during a challenging operating period.”
Sun Country Airlines CEO, on the earnings call
Forward Guidance & Outlook
For Q2 2025, Sun Country guides total revenue of $250 million to $260 million (a range of negative 2% to positive 2% versus Q2 2024), economic fuel cost per gallon of $2.44 (down 15% YoY), operating income margin of 4% to 7% (down 1.5 to up 1.5 percentage points YoY), an effective tax rate of 23%, and total system block hours of 36,000 to 37,000 (down 3% to down 1% YoY). Scheduled service ASMs are expected to decline approximately 7% in Q2 to allow for planned cargo segment growth. The company plans to add five more cargo aircraft by end of Q3 2025, bringing the cargo fleet to 20 aircraft. Management expects continued strength in charter and cargo businesses to help offset macro-related weakness in scheduled service.
SNCY YoY Financials
SNCY Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.