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Alaska Air Group, Inc. (ALK - Free Report) reported better-than-expected third-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.
Quarterly earnings of $2.53 per share beat the Zacks Consensus Estimate of $2.41. The bottom line surged 72.1% year over year.
Operating revenues of $2,828 million outperformed the Zacks Consensus Estimate of $2,827.4 million. The top line jumped 45% year over year, with passenger revenues accounting for 92.5% of the top line and soaring 47% owing to continued recovery in air-travel demand. Passenger revenues totaled $2,615 million in the reported quarter. On a year-over-year basis, cargo and other revenues rose 14% to $67 million. Mileage plan other revenues grew 22% to $146 million.
Total revenue per available seat mile (RASM: a key measure of unit revenues) jumped 27.8% year over year to 17.30 cents. Yield increased 20.8% to 18.48 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) soared 22% to 14.14 billion. To cater to this increased demand, capacity (measured in average seat miles) expanded 13.3% to 16.35 billion. Consolidated load factor (percentage of seats filled by passengers) increased 6.2 percentage points to 86.5% in the third quarter of 2022.
In the third quarter, total operating expenses (on a reported basis) escalated 63% year over year to $2,766 million, with aircraft fuel expenses, including hedging gains and losses, skyrocketing more than 100%. Economic fuel price per gallon climbed 77.8% to $3.61 due to a spike in oil prices, thanks to the Russia-Ukraine war. Consolidated operating costs per available seat mile (CASM: excluding fuel and special items) grew 8.3% year over year to 9.15 cents.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
As of Sep 30, 2022, Alaska Air had $3.15 billion of cash and marketable securities compared with $3.43 billion at the end of June 2022.
ALK exited the third quarter with long-term debt (net of current portion) of $1.89 billion compared with $1.96 billion at the end of June 2022. Debt-to-capitalization ratio was 49% compared with 50% in the prior quarter.
ALK generated $174 million of cash from operating activities in the third quarter.
Q4 & Full-Year Outlook
Alaska Air expects total revenues to increase 12-15% from the fourth quarter of 2019 actuals. The company expects capacity to decline 7-10% in the fourth quarter from the comparable period in 2019. Passenger load factor is expected to be in the range of 83-86%. CASM, excluding fuel and special items, is predicted to climb 20-23% in the fourth quarter from the 2019 level. Economic fuel cost per gallon is estimated to be in the band of $3.50-$3.70 in the fourth quarter.
For the full-year 2022, CASM, excluding fuel and special items, is now anticipated to increase 19-20% from the 2019 level compared with the previous forecast of a rise of 15-17%. Alaska Air continues to expect capacity to decline 8% to 9%. Despite the impact of rising fuel costs and new labor deals, ALK continues to expect the 2022 adjusted pre-tax margin to be 6-9%.
Delta AirLines’ (DAL - Free Report) third-quarter 2022 earnings (excluding 42 cents from non-recurring items) of $1.51 per share fell short of the Zacks Consensus Estimate of $1.56. Escalated operating expenses induced the earnings miss.
Multiple flight cancelations and booking weaknesses due to Hurricane Ian also hurt results. DAL reported earnings of 30 cents per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $13,975 million, which lagged the Zacks Consensus Estimate of $14,157.2 million. Driven by the high air-travel demand, total revenues increased more than 52% on a year-over-year basis.
United Airlines’ (UAL - Free Report) third-quarter 2022 earnings (excluding 5 cents from non-recurring items) of $2.81 per share beat the Zacks Consensus Estimate of $2.21 and our estimate of $2.17. An upbeat in air-travel demand aided results.
In the year-ago quarter, UAL incurred a loss of $1.02 per share when air-travel demand was not as buoyant as in the current scenario. The third quarter of 2022 was the second consecutive profitable quarter at UAL since the onset of the pandemic.
Operating revenues of $12,877 million beat the Zacks Consensus Estimate of $12,709.5 million and our estimate of $12, 631.6 million. UAL’s revenues increased more than 66% year over year owing to an upbeat in air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.2% from third-quarter 2019 (pre-coronavirus) levels.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported better-than-expected third-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.
Quarterly earnings of $2.57 per share surpassed the Zacks Consensus Estimate of $2.45 and improved 36.7% year over year.
Total operating revenues of $3,838.3 million also outperformed the Zacks Consensus Estimate of $3803.4 million. The top line jumped 22.1% year over year on the back of strength across — Dedicated Contract Services, Intermodal, Truckload and Final Mile Services segments. Total operating revenues, excluding fuel surcharges, rose 12.4% year over year.
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Alaska Air (ALK) Q3 Earnings & Revenues Top, 2022 View Tweaked
Alaska Air Group, Inc. (ALK - Free Report) reported better-than-expected third-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.
Quarterly earnings of $2.53 per share beat the Zacks Consensus Estimate of $2.41. The bottom line surged 72.1% year over year.
Operating revenues of $2,828 million outperformed the Zacks Consensus Estimate of $2,827.4 million. The top line jumped 45% year over year, with passenger revenues accounting for 92.5% of the top line and soaring 47% owing to continued recovery in air-travel demand. Passenger revenues totaled $2,615 million in the reported quarter. On a year-over-year basis, cargo and other revenues rose 14% to $67 million. Mileage plan other revenues grew 22% to $146 million.
Total revenue per available seat mile (RASM: a key measure of unit revenues) jumped 27.8% year over year to 17.30 cents. Yield increased 20.8% to 18.48 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) soared 22% to 14.14 billion. To cater to this increased demand, capacity (measured in average seat miles) expanded 13.3% to 16.35 billion. Consolidated load factor (percentage of seats filled by passengers) increased 6.2 percentage points to 86.5% in the third quarter of 2022.
In the third quarter, total operating expenses (on a reported basis) escalated 63% year over year to $2,766 million, with aircraft fuel expenses, including hedging gains and losses, skyrocketing more than 100%. Economic fuel price per gallon climbed 77.8% to $3.61 due to a spike in oil prices, thanks to the Russia-Ukraine war. Consolidated operating costs per available seat mile (CASM: excluding fuel and special items) grew 8.3% year over year to 9.15 cents.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Alaska Air Group, Inc. price-consensus-eps-surprise-chart | Alaska Air Group, Inc. Quote
Liquidity
As of Sep 30, 2022, Alaska Air had $3.15 billion of cash and marketable securities compared with $3.43 billion at the end of June 2022.
ALK exited the third quarter with long-term debt (net of current portion) of $1.89 billion compared with $1.96 billion at the end of June 2022. Debt-to-capitalization ratio was 49% compared with 50% in the prior quarter.
ALK generated $174 million of cash from operating activities in the third quarter.
Q4 & Full-Year Outlook
Alaska Air expects total revenues to increase 12-15% from the fourth quarter of 2019 actuals. The company expects capacity to decline 7-10% in the fourth quarter from the comparable period in 2019. Passenger load factor is expected to be in the range of 83-86%. CASM, excluding fuel and special items, is predicted to climb 20-23% in the fourth quarter from the 2019 level. Economic fuel cost per gallon is estimated to be in the band of $3.50-$3.70 in the fourth quarter.
For the full-year 2022, CASM, excluding fuel and special items, is now anticipated to increase 19-20% from the 2019 level compared with the previous forecast of a rise of 15-17%. Alaska Air continues to expect capacity to decline 8% to 9%. Despite the impact of rising fuel costs and new labor deals, ALK continues to expect the 2022 adjusted pre-tax margin to be 6-9%.
Currently, Alaska Air carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Transportation Companies
Delta AirLines’ (DAL - Free Report) third-quarter 2022 earnings (excluding 42 cents from non-recurring items) of $1.51 per share fell short of the Zacks Consensus Estimate of $1.56. Escalated operating expenses induced the earnings miss.
Multiple flight cancelations and booking weaknesses due to Hurricane Ian also hurt results. DAL reported earnings of 30 cents per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $13,975 million, which lagged the Zacks Consensus Estimate of $14,157.2 million. Driven by the high air-travel demand, total revenues increased more than 52% on a year-over-year basis.
United Airlines’ (UAL - Free Report) third-quarter 2022 earnings (excluding 5 cents from non-recurring items) of $2.81 per share beat the Zacks Consensus Estimate of $2.21 and our estimate of $2.17. An upbeat in air-travel demand aided results.
In the year-ago quarter, UAL incurred a loss of $1.02 per share when air-travel demand was not as buoyant as in the current scenario. The third quarter of 2022 was the second consecutive profitable quarter at UAL since the onset of the pandemic.
Operating revenues of $12,877 million beat the Zacks Consensus Estimate of $12,709.5 million and our estimate of $12, 631.6 million. UAL’s revenues increased more than 66% year over year owing to an upbeat in air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.2% from third-quarter 2019 (pre-coronavirus) levels.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported better-than-expected third-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.
Quarterly earnings of $2.57 per share surpassed the Zacks Consensus Estimate of $2.45 and improved 36.7% year over year.
Total operating revenues of $3,838.3 million also outperformed the Zacks Consensus Estimate of $3803.4 million. The top line jumped 22.1% year over year on the back of strength across — Dedicated Contract Services, Intermodal, Truckload and Final Mile Services segments. Total operating revenues, excluding fuel surcharges, rose 12.4% year over year.