St. George-based SkyWest Inc., a commuter airline that flies for Delta Air Lines Inc. and United Airlines, sold 4 million shares to the public, raising $99.3 million for debt payments and other uses.
The shares sold at $26.05, the company said in a statement Tuesday. Helane Becker, an analyst at Benchmark Co. in New York, had expected the shares to sell for $25, she said in a report Tuesday.
SkyWest will be paying off some debt it incurred last year when it purchased Atlantic Southeast Airlines from Delta, said Susan Donofrio, an analyst in New York with Cathay Financial. Delta sold ASA for $425 million in September 2005 to raise cash in an effort to avoid a bankruptcy filing.
SkyWest has "always been fairly conservative with their balance sheet," Donofrio said in an interview. She rates SkyWest shares as "outperform."
SkyWest spokesman Morgan Durrant declined to comment on the offering.
Merrill Lynch & Co., the underwriter for the stock sale, and co-manager Raymond James & Associates had the option to buy 600,000 shares, SkyWest said.
The carrier's shares fell 27 cents to close at $25.78 Tuesday on the Nasdaq Stock Market.
Investors are concerned that the threatened pilot strike at Delta could affect SkyWest passenger traffic, Donofrio said. Delta is seeking pay and benefit cuts from members of the Air Line Pilots Association, and the union said it may call a strike as early as next week if its labor contract is scrapped.
SkyWest said last week that first-quarter net income will be $33.9 million to $37.8 million, or 56 cents to 62 cents a share.