By Dean Seal
Shares of Skywest have soared after the company announced the acquisition of a 25% ownership stake in Contour Airlines, along with reporting a higher fourth-quarter profit than anticipated by analysts.
Impressive Stock Jump
The stock experienced a remarkable 8.3% surge, reaching a high of $58.58 during the trading day. This is a significant increase compared to the shares trading at around $21.89 this time last year.
The Deal with Contour Airlines
SkyWest revealed that it had acquired the 25% ownership stake in Contour Airlines as part of a comprehensive deal. This agreement includes an asset provisioning arrangement where SkyWest will provide Contour with CRJ airframes, engines, and rotable parts.
Positive Analyst Outlook
Savanthi Syth, an analyst at Raymond James, views this deal as providing SkyWest with an additional opportunity to deploy CRJ200 assets and address the ongoing captain shortage. As a result, Syth has raised her price target for the stock by $10, now at $65.
Impressive Q4 Performance
During the fourth quarter, SkyWest achieved a profit of $17.5 million, translating to 42 cents per share. This marks significant improvement compared to the loss of $47 million or 77 cents per share in the same quarter last year. Analysts polled by FactSet had predicted earnings of just 15 cents per share.