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Alaska Air (ALK) Q3 Earnings Beat Estimates; Increase Y/Y
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Alaska Air Group, Inc. (ALK - Free Report) reported third-quarter 2016 earnings per share of $2.20, which surpassed the Zacks Consensus Estimate of $2.05 and also increased 2% year over year.
Quarterly revenues of $1.57 billion inched up 3% year over year and also surpassed the Zacks Consensus Estimate of $1.55 billion. Passenger revenues, which improved 2% on a year-over-year basis, accounted for bulk of the top line.
Operating Statistics
Airline traffic, measured in revenue passenger miles, rose 8.1% year over year to 9,601 million in the third quarter of 2016. Capacity or available seat miles increased 8.1% to 11,212 million. Load factor (percentage of seats filled by passengers) remained flat year over year at 85.6%. Passenger revenue per available seat mile decreased 5.8% year over year to 11.79 cents.
In the quarter under review, operating income declined 8% to $400 million from the prior-year quarter. Total operating expenses rose 8% year over year to $1,166 million. Fuel price (economic) was $1.58 per gallon, down from $1.82 in the year-ago quarter. Consolidated unit cost or cost per available seat mile, excluding fuel and special items, inched up 1.6% year over year to 8.20 cents.
At the end of the third quarter of 2016, this Zacks Rank #4 (Sell) company had $3,226 million in cash and marketable securities compared with $1,328 million at the end of fiscal 2015.
During the quarter under review, the company had long-term debt of $1,861 million compared with $569 million at the end of 2015. At the end of the reported quarter, adjusted debt-to-capitalization ratio was 45% compared with 27% at 2015-end.
Virgin America Update
Alaska Air Group officially announced the Virgin America Inc. acquisition on Apr 4, 2016. The company has mentioned that it is actively working on the necessary requirements to complete the acquisition. The company raised funds of $1.5 billion to finance the deal and has also recorded $22 million under special items in the third quarter for costs related to the merger.
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Alaska Air (ALK) Q3 Earnings Beat Estimates; Increase Y/Y
Alaska Air Group, Inc. (ALK - Free Report) reported third-quarter 2016 earnings per share of $2.20, which surpassed the Zacks Consensus Estimate of $2.05 and also increased 2% year over year.
Quarterly revenues of $1.57 billion inched up 3% year over year and also surpassed the Zacks Consensus Estimate of $1.55 billion. Passenger revenues, which improved 2% on a year-over-year basis, accounted for bulk of the top line.
Operating Statistics
Airline traffic, measured in revenue passenger miles, rose 8.1% year over year to 9,601 million in the third quarter of 2016. Capacity or available seat miles increased 8.1% to 11,212 million. Load factor (percentage of seats filled by passengers) remained flat year over year at 85.6%. Passenger revenue per available seat mile decreased 5.8% year over year to 11.79 cents.
Alaska Air faces tough competition from peers such as SkyWest, Inc. (SKYW - Free Report) and JetBlue Airways Co. (JBLU - Free Report) . Both these companies carry a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank stocks here.
Operating Expenses & Income
In the quarter under review, operating income declined 8% to $400 million from the prior-year quarter. Total operating expenses rose 8% year over year to $1,166 million. Fuel price (economic) was $1.58 per gallon, down from $1.82 in the year-ago quarter. Consolidated unit cost or cost per available seat mile, excluding fuel and special items, inched up 1.6% year over year to 8.20 cents.
ALASKA AIR GRP Price, Consensus and EPS Surprise
ALASKA AIR GRP Price, Consensus and EPS Surprise | ALASKA AIR GRP Quote
Liquidity
At the end of the third quarter of 2016, this Zacks Rank #4 (Sell) company had $3,226 million in cash and marketable securities compared with $1,328 million at the end of fiscal 2015.
During the quarter under review, the company had long-term debt of $1,861 million compared with $569 million at the end of 2015. At the end of the reported quarter, adjusted debt-to-capitalization ratio was 45% compared with 27% at 2015-end.
Virgin America Update
Alaska Air Group officially announced the Virgin America Inc. acquisition on Apr 4, 2016. The company has mentioned that it is actively working on the necessary requirements to complete the acquisition. The company raised funds of $1.5 billion to finance the deal and has also recorded $22 million under special items in the third quarter for costs related to the merger.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>