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Alaska Air Group (ALK) Q1 Earnings Top Estimates, Decline Y/Y
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Alaska Air Group, Inc. (ALK - Free Report) reported first-quarter 2018 earnings (excluding 11 cents from non-recurring items) of 14 cents, surpassing the Zacks Consensus Estimate by 3 cents. However, the bottom line declined 86.7% on a year-over-year basis due to high costs.
Revenues came in at $1,832 million, marginally above the Zacks Consensus Estimate of $1,830.6 million. The top line also improved 5% on a year-over-year basis. Passenger revenues, accounting for a bulk of the top line (86.8%), were also up 5% on a year-over-year basis.
Operating Statistics
Airline traffic, measured in revenue passenger miles, rose 5.9% year over year to 12,403 million in the reported quarter. Capacity or available seat miles expanded 7.5% to 15,480 million. Load factor (percentage of seat occupancy) contracted 120 basis points to 80.1% as capacity expansion outweighed traffic growth.
Total revenue per available seat mile (RASM: a key measure of unit revenues) decreased 2.1% year over year to 11.84 cents in the reported quarter. Yield slipped 0.7% to 13.59 cents.
Operating Expenses & Income
In the quarter under review, total operating expenses were up 14% year over year to $1,803 million. Operating income plunged 82% to $29 million from the prior-year quarter. Fuel price (economic) was $2.14 per gallon, up 20.2%.
Consolidated cost per available seat mile — excluding fuel and special items — nudged up 5.1% to 8.81 cents, mainly owing to a 19% rise in wages and related benefits.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Alaska Air Group exited the quarter with long-term debt of $2,062 million compared with $2,262 million at the end of 2017. Adjusted debt-to-capitalization ratio was 53%, flat on a sequential basis. Moreover, the carrier repurchased 185,661 shares for approximately $12 million in the reported quarter.
Q2 & 2018 Forecast
For the second quarter of 2018, the carrier expects cost per available seat mile (CASM), excluding fuel and special items, to increase approximately 4.8% year over year. For 2018, the same is projected to rise 3.5%. Economic fuel cost per gallon is anticipated to be $2.25 per gallon in the second quarter, up approximately 32%. RASM is projected to decline between 2.75% and 3.75% in the same period.
Meanwhile, capacity is anticipated to expand around 8.5% in the second quarter. For the full year, the metric is likely to climb 6.5% whereas effective tax rate in 2018 is estimated to be approximately 25%.
Upcoming Releases
Investors interested in the broader Zacks Transportation sector are keenly awaiting first-quarter earnings reports from key players like JetBlue Airways Corporation (JBLU - Free Report) , Norfolk Southern Corporation (NSC - Free Report) and Union Pacific Corporation (UNP - Free Report) . While JetBlue will report on Apr 24, Norfolk Southern and Union Pacific will announce the same on Apr 25 and Apr 26, respectively.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
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Alaska Air Group (ALK) Q1 Earnings Top Estimates, Decline Y/Y
Alaska Air Group, Inc. (ALK - Free Report) reported first-quarter 2018 earnings (excluding 11 cents from non-recurring items) of 14 cents, surpassing the Zacks Consensus Estimate by 3 cents. However, the bottom line declined 86.7% on a year-over-year basis due to high costs.
Revenues came in at $1,832 million, marginally above the Zacks Consensus Estimate of $1,830.6 million. The top line also improved 5% on a year-over-year basis. Passenger revenues, accounting for a bulk of the top line (86.8%), were also up 5% on a year-over-year basis.
Operating Statistics
Airline traffic, measured in revenue passenger miles, rose 5.9% year over year to 12,403 million in the reported quarter. Capacity or available seat miles expanded 7.5% to 15,480 million. Load factor (percentage of seat occupancy) contracted 120 basis points to 80.1% as capacity expansion outweighed traffic growth.
Total revenue per available seat mile (RASM: a key measure of unit revenues) decreased 2.1% year over year to 11.84 cents in the reported quarter. Yield slipped 0.7% to 13.59 cents.
Operating Expenses & Income
In the quarter under review, total operating expenses were up 14% year over year to $1,803 million. Operating income plunged 82% to $29 million from the prior-year quarter. Fuel price (economic) was $2.14 per gallon, up 20.2%.
Consolidated cost per available seat mile — excluding fuel and special items — nudged up 5.1% to 8.81 cents, mainly owing to a 19% rise in wages and related benefits.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Alaska Air Group, Inc. Price, Consensus and EPS Surprise | Alaska Air Group, Inc. Quote
Liquidity & Buybacks
At the end of the reported quarter, this Zacks Rank #3 (Hold) company had $1,528 million in cash and marketable securities compared with $1,621 million at the end of 2017. You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alaska Air Group exited the quarter with long-term debt of $2,062 million compared with $2,262 million at the end of 2017. Adjusted debt-to-capitalization ratio was 53%, flat on a sequential basis. Moreover, the carrier repurchased 185,661 shares for approximately $12 million in the reported quarter.
Q2 & 2018 Forecast
For the second quarter of 2018, the carrier expects cost per available seat mile (CASM), excluding fuel and special items, to increase approximately 4.8% year over year. For 2018, the same is projected to rise 3.5%. Economic fuel cost per gallon is anticipated to be $2.25 per gallon in the second quarter, up approximately 32%. RASM is projected to decline between 2.75% and 3.75% in the same period.
Meanwhile, capacity is anticipated to expand around 8.5% in the second quarter. For the full year, the metric is likely to climb 6.5% whereas effective tax rate in 2018 is estimated to be approximately 25%.
Upcoming Releases
Investors interested in the broader Zacks Transportation sector are keenly awaiting first-quarter earnings reports from key players like JetBlue Airways Corporation (JBLU - Free Report) , Norfolk Southern Corporation (NSC - Free Report) and Union Pacific Corporation (UNP - Free Report) . While JetBlue will report on Apr 24, Norfolk Southern and Union Pacific will announce the same on Apr 25 and Apr 26, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>