Alaska Air Group, Inc. (ALK - Free Report) delivered first-quarter 2019 adjusted earnings per share of 17 cents, beating the Zacks Consensus Estimate of 13 cents. Moreover, the bottom line improved on a year-over-year basis.
Revenues came in at $1,876 million, above the Zacks Consensus Estimate of $1,872.97 million. The top line also rose year over year. Passenger revenues, accounting for a bulk (91.5%) of the top line, were up 2% on a year-over-year basis.
Operating Statistics
Airline traffic, measured in revenue passenger miles, inched up 0.4% year over year in the reported quarter. Capacity or available seat miles expanded 0.2%. Load factor (percentage of seats occupied by passengers) improved 20 basis points to 80.3% as traffic growth outpaced capacity expansion in the reported quarter.
Total revenue per available seat mile (RASM: a key measure of unit revenues) increased 2.2% year over year to 12.10 cents in the quarter under discussion. Meanwhile, yield rose 1.5% to 13.78 cents.
Operating Expenses & Income
In the quarter under review, total operating expenses were up 3% year over year to $1,851 million. Operating income declined 14% from the prior-year quarter to $25 million. Fuel price (economic) was $2.13 per gallon, down 0.5%.
Consolidated cost per available seat mile — excluding fuel and special items — nudged up 2.8% to 9.06 cents.
Liquidity & Buybacks
At the end of the reported quarter, this Zacks Rank #4 (Sell) company had $1,436 million in cash and marketable securities compared with $1,236 million at the end of 2018.
Alaska Air Group exited the quarter with long-term debt of $1,664 million compared with $1,617 million at the end of 2018. Adjusted debt-to-capitalization ratio was 47%, flat compared to that in December 2018. The carrier repurchased 214,891 shares worth approximately $13 million during the first quarter of 2019.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q2 & 2019 Outlook
The company anticipates capacity to rise approximately 1% in the second quarter of 2019. Additionally, RASM is estimated to increase in the 2-5% range in the period. Non-fuel unit costs (excluding special items) are projected to increase approximately 5% year over year. Meanwhile, economic fuel cost is forecast to be flat year over year at $2.13 per gallon in the current quarter.
For the full year, capacity is estimated to expand approximately 2% while non-fuel unit costs (excluding special items) are expected to rise nearly 2.1%. Also, capital expenditures are anticipated to be $750 million in the ongoing year. Meanwhile, effective tax rate is predicted to be approximately 26% in the year.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting first-quarter earnings reports from key players, namely Expeditors International of Washington, Inc. (EXPD - Free Report) , C.H. Robinson Worldwide, Inc. (CHRW - Free Report) and Air Lease Corporation (AL - Free Report) . While C.H. Robinson will report first-quarter earnings on Apr 30, Expeditors and Air Lease will announce the same on May 7 and May 9, respectively.
Zacks' Top 10 Stocks for 2019
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Alaska Air Group, Inc. (ALK - Free Report) delivered first-quarter 2019 adjusted earnings per share of 17 cents, beating the Zacks Consensus Estimate of 13 cents. Moreover, the bottom line improved on a year-over-year basis.
Revenues came in at $1,876 million, above the Zacks Consensus Estimate of $1,872.97 million. The top line also rose year over year. Passenger revenues, accounting for a bulk (91.5%) of the top line, were up 2% on a year-over-year basis.
Operating Statistics
Airline traffic, measured in revenue passenger miles, inched up 0.4% year over year in the reported quarter. Capacity or available seat miles expanded 0.2%. Load factor (percentage of seats occupied by passengers) improved 20 basis points to 80.3% as traffic growth outpaced capacity expansion in the reported quarter.
Total revenue per available seat mile (RASM: a key measure of unit revenues) increased 2.2% year over year to 12.10 cents in the quarter under discussion. Meanwhile, yield rose 1.5% to 13.78 cents.
Operating Expenses & Income
In the quarter under review, total operating expenses were up 3% year over year to $1,851 million. Operating income declined 14% from the prior-year quarter to $25 million. Fuel price (economic) was $2.13 per gallon, down 0.5%.
Consolidated cost per available seat mile — excluding fuel and special items — nudged up 2.8% to 9.06 cents.
Liquidity & Buybacks
At the end of the reported quarter, this Zacks Rank #4 (Sell) company had $1,436 million in cash and marketable securities compared with $1,236 million at the end of 2018.
Alaska Air Group exited the quarter with long-term debt of $1,664 million compared with $1,617 million at the end of 2018. Adjusted debt-to-capitalization ratio was 47%, flat compared to that in December 2018. The carrier repurchased 214,891 shares worth approximately $13 million during the first quarter of 2019.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q2 & 2019 Outlook
The company anticipates capacity to rise approximately 1% in the second quarter of 2019. Additionally, RASM is estimated to increase in the 2-5% range in the period. Non-fuel unit costs (excluding special items) are projected to increase approximately 5% year over year. Meanwhile, economic fuel cost is forecast to be flat year over year at $2.13 per gallon in the current quarter.
For the full year, capacity is estimated to expand approximately 2% while non-fuel unit costs (excluding special items) are expected to rise nearly 2.1%. Also, capital expenditures are anticipated to be $750 million in the ongoing year. Meanwhile, effective tax rate is predicted to be approximately 26% in the year.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting first-quarter earnings reports from key players, namely Expeditors International of Washington, Inc. (EXPD - Free Report) , C.H. Robinson Worldwide, Inc. (CHRW - Free Report) and Air Lease Corporation (AL - Free Report) . While C.H. Robinson will report first-quarter earnings on Apr 30, Expeditors and Air Lease will announce the same on May 7 and May 9, respectively.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
See Latest Stocks Today >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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