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Alaska Air Group (ALK) Q3 Earnings: What's in the Offing?
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Alaska Air Group, Inc. (ALK - Free Report) is scheduled to unveil its third-quarter 2018 results on Oct 25, before the market opens.
In the second quarter of 2018, the carrier delivered a positive earnings surprise of 1.8%. Results were aided by low fuel costs. Quarterly earnings, however, declined on a year-over-year basis mainly due to high fuel costs. Meanwhile, revenues increased year over year backed by strong demand for air travel.
The company also has an impressive history with respect to earnings per share. It surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average beat of 7.2%.
Given this backdrop, lets delve deep to unearth the factors likely to impact the carrier’s third-quarter 2018 results.
High fuel costs are expected to limit bottom-line growth in the third quarter of 2018, as has been the case over the past few quarters. Fuel price per gallon for the soon-to-be-reported quarter is expected to be $2.32 per gallon, reflecting an increase of 28.9% year over year. The Zacks Consensus Estimate for the metric is pegged at $2.26 per gallon, mirroring a 25.6% year-over-year increase.
Non-fuel unit costs are envisioned between 8.36 cents and 8.41 cents, up 4.1%. Apart from high costs, the lack of capacity discipline is hurting the stock significantly.
Nevertheless, strong demand for air travel is expected to boost Alaska Air Group’s top line in the soon-to-be-reported quarter. Revenue per available seat miles (a key measure of unit revenues) is projected to either remain flat or decline up to 2% on a year-over-year basis.
Our proven model too does not show conclusively that Alaska Air Group will beat earnings estimate in third-quarter 2018. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. However, that is not the case as highlighted below.
Earnings ESP: Alaska Air Group has an Earnings ESP of 0.00% as both the Most Accurate Estimate is in line with the Zacks Consensus Estimate of $1.80 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Alaska Air Group carries a Zacks Rank #3. However, that alone is not enough to secure an earnings beat.
Note that we caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing a negative estimate revision.
Stocks to Consider
Investors interested in the broader Transportation sector may consider Union Pacific Corporation (UNP - Free Report) , Old Dominion Freight Line, Inc. (ODFL - Free Report) and C.H. Robinson Worldwide, Inc. (CHRW - Free Report) as these stocks possess the right combination of elements to come up with an earnings beat in their next releases.
Old Dominion Freight Line has an Earnings ESP of +0.69% and a Zacks Rank #2. The company will release third-quarter 2018 results on Oct 25.
C.H. Robinson has an Earnings ESP of +0.56% and a Zacks Rank of 2. The company will announce third-quarter financial figures on Oct 30.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Alaska Air Group (ALK) Q3 Earnings: What's in the Offing?
Alaska Air Group, Inc. (ALK - Free Report) is scheduled to unveil its third-quarter 2018 results on Oct 25, before the market opens.
In the second quarter of 2018, the carrier delivered a positive earnings surprise of 1.8%. Results were aided by low fuel costs. Quarterly earnings, however, declined on a year-over-year basis mainly due to high fuel costs. Meanwhile, revenues increased year over year backed by strong demand for air travel.
The company also has an impressive history with respect to earnings per share. It surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average beat of 7.2%.
Given this backdrop, lets delve deep to unearth the factors likely to impact the carrier’s third-quarter 2018 results.
High fuel costs are expected to limit bottom-line growth in the third quarter of 2018, as has been the case over the past few quarters. Fuel price per gallon for the soon-to-be-reported quarter is expected to be $2.32 per gallon, reflecting an increase of 28.9% year over year. The Zacks Consensus Estimate for the metric is pegged at $2.26 per gallon, mirroring a 25.6% year-over-year increase.
Non-fuel unit costs are envisioned between 8.36 cents and 8.41 cents, up 4.1%. Apart from high costs, the lack of capacity discipline is hurting the stock significantly.
Nevertheless, strong demand for air travel is expected to boost Alaska Air Group’s top line in the soon-to-be-reported quarter. Revenue per available seat miles (a key measure of unit revenues) is projected to either remain flat or decline up to 2% on a year-over-year basis.
Alaska Air Group, Inc. Price and EPS Surprise
Alaska Air Group, Inc. Price and EPS Surprise | Alaska Air Group, Inc. Quote
What Does Our Model Say?
Our proven model too does not show conclusively that Alaska Air Group will beat earnings estimate in third-quarter 2018. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. However, that is not the case as highlighted below.
Earnings ESP: Alaska Air Group has an Earnings ESP of 0.00% as both the Most Accurate Estimate is in line with the Zacks Consensus Estimate of $1.80 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Alaska Air Group carries a Zacks Rank #3. However, that alone is not enough to secure an earnings beat.
Note that we caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing a negative estimate revision.
Stocks to Consider
Investors interested in the broader Transportation sector may consider Union Pacific Corporation (UNP - Free Report) , Old Dominion Freight Line, Inc. (ODFL - Free Report) and C.H. Robinson Worldwide, Inc. (CHRW - Free Report) as these stocks possess the right combination of elements to come up with an earnings beat in their next releases.
Union Pacific has an Earnings ESP of +0.57% and a Zacks Rank #2. The company will report third-quarter earnings on Oct 25. You can see the complete list of today’s Zacks #1 Rank stocks here.
Old Dominion Freight Line has an Earnings ESP of +0.69% and a Zacks Rank #2. The company will release third-quarter 2018 results on Oct 25.
C.H. Robinson has an Earnings ESP of +0.56% and a Zacks Rank of 2. The company will announce third-quarter financial figures on Oct 30.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>