Episode
SkyWest Stock: It MISSED Earnings and JUMPED 8% — Here’s Why We Say BUY
- Published
- Jul 25, 2026
- Duration seconds
- 861
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Summary
SkyWest, Inc. (SKYW) Q2 2026 — SkyWest (SKYW), the largest US regional airline, reported a rare Q2 2026 EPS MISS: diluted EPS of $2.54 came in below the ~$2.70 estimate and fell ~13% YoY (from $2.91), even as revenue rose ~7% to $1.10B. Net income was $101M vs $120M a year ago. The culprit was specific: aircraft fuel expense more than DOUBLED to $60.6M (from $27.5M) on higher per-gallon cost in the prorate business, plus a ~$9M other-income YoY swing. Yet the stock RALLIED ~8% (to ~$104) — because underneath, the operation improved: block hours +5% YoY / +9% sequential as parked jets reactivate (CRJ550 hrs +73%, CRJ900 +36%), pre-tax income +29% q/q, a funded E175 fleet build toward ~300 by end-2027, debt down to $2.3B, and a fresh +$250M buyback authorization (~$313M available). Our owner-earnings DCF (12% discount) lands fair value near $122 vs ~$104 — ~17% upside. Our call: BUY, 4/5. SkyWest is the largest regional airline in America — the operator that flies the smaller jets you board under the United, Delta, American and Alaska brands, with ~500 aircraft to 240+ destinations. Q2 2026 was a rare miss on the headline: diluted EPS of $2.54 fell short of the ~$2.70 estimate and dropped ~13% YoY, even though revenue rose ~7% to $1.10B. The whole miss traces to two lines: aircraft fuel MORE THAN DOUBLED to $60.6M (from $27.5M) as per-gallon cost jumped in SkyWest's prorate flying (the slice where it, not the major, pays for fuel), plus a ~$9M one-time other-income comparison that didn't repeat. It was a cost-line miss, not a demand miss. Underneath, the business inflected: block hours rose 5% YoY and 9% sequentially as parked regional jets return to service (CRJ550 block hours +73%, CRJ900 +36%) on an easing pilot shortage, and pre-tax income jumped 29% from Q1. The fle…