SkyWest, Inc. (SKYW) Earnings
SkyWest, Inc. is expected to report next earnings on October 29, 2026 (in NaN days), with a consensus EPS estimate of $3.13. SKYW has beaten EPS estimates in 10 of its last 12 reported quarters (average surprise +1.2% over the last four).
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Jul 23, 2026 | $2.70 | $2.54 | -5.9% | $1.1B | -0.6% |
| Apr 23, 2026 | $2.15 | $2.21 | +2.8% | $1.0B | +2.1% |
| Jan 29, 2026 | $2.25 | $2.21 | -1.8% | $1.0B | +1.0% |
| Oct 30, 2025 | $2.56 | $2.81 | +9.8% | $1.1B | +4.5% |
| Jul 24, 2025 | $2.34 | $2.91 | +24.4% | $1.0B | +0.8% |
| Apr 24, 2025 | $2.04 | $2.42 | +18.6% | $948M | +0.2% |
| Jan 30, 2025 | $1.75 | $2.34 | +33.7% | $944M | +3.1% |
| Oct 31, 2024 | $1.92 | $2.16 | +12.5% | $913M | +2.7% |
| Jul 25, 2024 | $1.73 | $1.82 | +5.2% | $867M | +4.9% |
| Apr 25, 2024 | $1.23 | $1.45 | +17.9% | $804M | -2.8% |
| Feb 1, 2024 | $0.15 | $0.42 | +180.0% | $752M | -0.9% |
| Oct 26, 2023 | $0.40 | $0.55 | +37.5% | $766M | +1.3% |
Source: company filings + earnings calendar. For informational purposes only — not investment advice.
Earnings call summary
Q2 FY2026 · July 23, 2026
AI summary of management’s prepared remarks and analyst Q&A. For informational purposes only — not investment advice.
Management highlights
- Overall Business & Operational Performance • Reported strong Q2 2026 results with 99.9% adjusted completion factor across nearly 228,000 flights, and received industry recognition as one of Newsweek's America's Greatest Workplaces 2026 and one of Fortune World's Most Admired Companies 2026. • Demand for both contract and prorate flying remained strong despite higher fuel costs, with 60% of prorate fuel impacts offset by aligned fare increases matching major partners. • Debt has been reduced by $1 billion since the end of 2022, and leverage metrics remain among the best in the regional airline industry. Over 100 unencumbered E175s are expected by the end of 2029. - Fleet Strategy & Growth Initiatives • Announced a new agreement with American to purchase and operate 11 new E175s, with deliveries starting in late 2026. 11 E175s will be delivered in H2 2026, with 23 additional deliveries through 2028, for a total of 34 added E175s by end of 2028. The company is on track to operate 300 total E175s by the end of 2027, retaining its position as the world's largest E175 operator. • Ongoing conversion of CRJ 700 aircraft to the popular CRJ 550 configuration, with CRJ 450 service scheduled to launch for United in fall 2026. 36 CRJ 550s are already in service for United, with the remaining 14 to enter service in 2026, and the company targets up to 100 total CRJ 450 conversions long-term. • 67 E175s remain on firm order with Embraer, 34 allocated to major partners and 33 unassigned with flexible delivery slots (2027 through 2032) that allow for deferral or termination if partner agreements are not secured. - Capital Allocation Strategy • Free cash flow is deployed across three priority areas: fleet growth investment, debt reduction, and opportunistic share repurchases. The Board of Directors approved a $250 million increase to the existing share repurchase program, which now has $313 million total available authorization after the existing $63 million remaining balance. • In Q2 2026, the company repurchased 833,000 shares for $75 million, repaid $122 million in existing debt, issued $24 million in new debt for fleet deliveries, and invested $139 million in capital expenditures. - Prorate Business Growth • Strong demand for prorate service in underserved communities, with 10 additional aircraft added to prorate agreements in Q2. Prorate growth is currently outpacing growth in the contract segment, driven by restored service to overlooked markets.
Guidance
- Full-year 2026 block hour production is expected to increase approximately 5% year-over-year from 2025, and management confirmed full confidence in hitting this target even with the new American E175 deliveries heavily weighted to the end of Q4 2026 that will contribute minimal 2026 block hours. - Full-year 2026 GAAP EPS is expected to be around $11, assuming an average jet fuel price of $3.65 per gallon for H2 2026 for the prorate business's 28 million gallon requirement, and is subject to ongoing prorate fuel price volatility. - Q3 2026 is expected to be the seasonally strongest quarter of the year, with Q4 2026 EPS expected to be modestly lower than Q3. - Total 2026 capital expenditures are expected to be approximately $700 million, with roughly half of this allocated to the 13 new E175 deliveries scheduled for the full year. - 2026 maintenance expense is expected to remain consistent with 2025 levels, even with higher block hour production. - The full-year 2026 effective tax rate is expected to be approximately 23% to 24%, with Q3 and Q4 rates holding around 27% to 28%, matching the Q2 2026 rate. - 2027 block hour growth guidance is not yet finalized, with management to provide updated details next quarter as fleet plans are confirmed.
Segment performance
For Q2 2026, SkyWest reported total revenue of $1.1 billion, up 9% quarter-over-quarter from Q1 2026 and 7% year-over-year from Q2 2025. Breakdown by segment: 1) Contract revenue: $864 million, accounting for 78.5% of total Q2 revenue. 2) Prorate and charter revenue: $201 million, accounting for 18.3% of total Q2 revenue. Prorate fuel expense was $61 million in Q2 2026, up $33 million year-over-year, driven by $21 million in higher per-gallon prices and $12 million from incremental production. 60% of fuel price increases were offset by fare increases aligned with major partner pricing. 3) Leasing and other revenue: $38 million, accounting for 3.4% of total Q2 revenue. Net income for the quarter was $101 million ($2.54 per diluted share), with pre-tax income of $139 million, which was 29% higher than Q1 2026 pre-tax income.
Risks & headwinds
- Prorate business is exposed to jet fuel price volatility, as fare increases only partially offset higher fuel costs, leaving profitability vulnerable to sudden unexpected spikes in oil prices. - Ongoing supply chain and operational challenges within the third-party MRO network, including labor and parts shortages, that could impact maintenance timelines and aircraft return to service schedules. - 33 unassigned E175 aircraft on firm order carry execution risk: if partner agreements cannot be secured, the company may need to defer or terminate the order, though the order structure is designed to limit downside exposure from this scenario. - Prorate business has a more seasonal revenue profile than contract flying, which can lead to greater quarterly earnings variability.
Analyst Q&A
Q: How does management's response to recent sharp fuel price increases differ from earlier this year, and what is the allocation opportunity between charter and prorate flying?
A: Management noted the company is in a more stable position today than during earlier fuel price spikes, with strong ongoing demand for both contract and prorate flying, and is pressing forward with growth plans in close collaboration with partners. For allocation, summer charter demand is seasonally weak, so the company moved aircraft from charter to higher-demand prorate/CPA flying, while it continues evaluating long-term expansion opportunities for charter with new technologies. (351 characters)
Q: What is the profitability improvement from replacing 11 American CRJ-700s with new E175s, how will the retired CRJ-700s be used, and will the new E175 purchases push debt higher long-term?
A: The E175 profitability will align with the company's other existing E175 fleets, and the transaction is clearly accretive and favorable for SkyWest. Retired CRJ-700s can be deployed via multiple avenues: conversion to CRJ 550 for partners, placement on prorate/CPA contracts, or leased to third parties, with strong existing demand for these aircraft. While new debt will be taken on for the 2026 deliveries, management expects overall debt to continue trending down over the next several years. (450 characters)
Q: What is the pace of share repurchases going forward, and what factors drive that pacing?
A: Capital deployment follows a balanced, opportunistic approach. The company prioritizes accretive fleet growth investments like the new American E175 order, while also continuing to reduce debt and repurchase shares when the stock price is perceived to be mispriced. Strong ongoing free cash flow generation allows the company to pursue all three priorities simultaneously, with $75 million in repurchases completed in each of the first two quarters of 2026. (352 characters)
Q: What are current demand trends for prorate business, and can prorate grow as a percentage of total block hours long-term?
A: Management reports very strong demand for prorate, even through the typical seasonal fall drop-off after summer, and fare increases have continued to offset the majority of recent fuel cost increases consistent with what major partners are seeing. Currently, prorate growth is outpacing contract growth, and this trend may continue, but management plans to grow all business lines (contract, prorate, charter, leasing) equally rather than focusing exclusively on prorate expansion. (363 characters)