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Alaska Air (ALK) Posts Q2 Loss, Revenues Decline 82% Y/Y
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Alaska Air Group (ALK - Free Report) incurred a loss of $3.54 per share (excluding $1.81 from non-recurring items) in the second quarter of 2020, wider than the Zacks Consensus Estimate of a loss of $3.39. In the year-ago quarter, the company reported earnings of $2.17. Amid coronavirus concerns, significantly low air travel demand weighed on the company’s performance.
Revenues came in at $421 million, surpassing the Zacks Consensus Estimate of $307.7 million. The top line declined 82% year over year. Passenger revenues — contributing 73.4% to the top line — were down 85% on a year-over-year basis due to weak travel demand.
Operating Statistics
Consolidated traffic, measured in revenue passenger miles, declined 88.7% year over year in the reported quarter. Capacity (measured in available seat miles) dropped 74.6%. Load factor (percentage of seats occupied by passengers) deteriorated 4780 basis points to 38.4% as traffic declined more than the amount of capacity contraction.
Total revenue per available seat mile (“RASM”: a key measure of unit revenues) fell 27.5% year over year to 9.77 cents in the quarter under discussion. Meanwhile, yield increased 29.5% to 18.68 cents.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
In the second quarter, total operating expenses (on a reported basis) dropped 63% year over year to $709 million. Fuel price (economic) was $1.2 per gallon, down 47.1% year over year.
The company reported operating loss of $288 million in the second quarter against operating income of $364 million in the year-ago quarter. Consolidated cost per available seat mile — excluding fuel and special items — surged more than 100% to 21.87 cents.
Liquidity
At the end of the second quarter, this Seattle, WA-based company had $2,803 million in cash and marketable securities compared with $1,521 million at the end of 2019.
This Zacks Rank #3 (Hold) company exited the quarter with long-term debt of $1,549 million compared with $1,264 million at the end of 2019. Adjusted debt-to-capitalization ratio was 51% compared with 41% at the end of December 2019. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sectorial Snapshot
Within the broader Transportation sector, Delta Air Lines (DAL - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and Kansas City Southern recently reported second-quarter earnings numbers.
Delta, carrying a Zacks Rank #4 (Sell), incurred a loss (excluding $4.58 from non-recurring items) of $4.43 per share in the June quarter, wider than the Zacks Consensus Estimate of a loss of $3.97. Total revenues in the quarter came in at $1,468 million, surpassing the Zacks Consensus Estimate of $1,400.8 million.
J.B. Hunt, carrying a Zacks Rank #3, reported second-quarter earnings of $1.14 per share, which surpassed the Zacks Consensus Estimate by 31 cents. Total revenues of $2,145.6 million also beat the Zacks Consensus Estimate of $2,060.9 million.
Kansas City Southern’s second-quarter earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. This Zacks Rank #3 company’s total revenues of $547.9 million lagged the Zacks Consensus Estimate of $550.2 million.
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Alaska Air (ALK) Posts Q2 Loss, Revenues Decline 82% Y/Y
Alaska Air Group (ALK - Free Report) incurred a loss of $3.54 per share (excluding $1.81 from non-recurring items) in the second quarter of 2020, wider than the Zacks Consensus Estimate of a loss of $3.39. In the year-ago quarter, the company reported earnings of $2.17. Amid coronavirus concerns, significantly low air travel demand weighed on the company’s performance.
Revenues came in at $421 million, surpassing the Zacks Consensus Estimate of $307.7 million. The top line declined 82% year over year. Passenger revenues — contributing 73.4% to the top line — were down 85% on a year-over-year basis due to weak travel demand.
Operating Statistics
Consolidated traffic, measured in revenue passenger miles, declined 88.7% year over year in the reported quarter. Capacity (measured in available seat miles) dropped 74.6%. Load factor (percentage of seats occupied by passengers) deteriorated 4780 basis points to 38.4% as traffic declined more than the amount of capacity contraction.
Total revenue per available seat mile (“RASM”: a key measure of unit revenues) fell 27.5% year over year to 9.77 cents in the quarter under discussion. Meanwhile, yield increased 29.5% to 18.68 cents.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Alaska Air Group, Inc. price-consensus-eps-surprise-chart | Alaska Air Group, Inc. Quote
Operating Expenses & Income
In the second quarter, total operating expenses (on a reported basis) dropped 63% year over year to $709 million. Fuel price (economic) was $1.2 per gallon, down 47.1% year over year.
The company reported operating loss of $288 million in the second quarter against operating income of $364 million in the year-ago quarter. Consolidated cost per available seat mile — excluding fuel and special items — surged more than 100% to 21.87 cents.
Liquidity
At the end of the second quarter, this Seattle, WA-based company had $2,803 million in cash and marketable securities compared with $1,521 million at the end of 2019.
This Zacks Rank #3 (Hold) company exited the quarter with long-term debt of $1,549 million compared with $1,264 million at the end of 2019. Adjusted debt-to-capitalization ratio was 51% compared with 41% at the end of December 2019. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sectorial Snapshot
Within the broader Transportation sector, Delta Air Lines (DAL - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and Kansas City Southern recently reported second-quarter earnings numbers.
Delta, carrying a Zacks Rank #4 (Sell), incurred a loss (excluding $4.58 from non-recurring items) of $4.43 per share in the June quarter, wider than the Zacks Consensus Estimate of a loss of $3.97. Total revenues in the quarter came in at $1,468 million, surpassing the Zacks Consensus Estimate of $1,400.8 million.
J.B. Hunt, carrying a Zacks Rank #3, reported second-quarter earnings of $1.14 per share, which surpassed the Zacks Consensus Estimate by 31 cents. Total revenues of $2,145.6 million also beat the Zacks Consensus Estimate of $2,060.9 million.
Kansas City Southern’s second-quarter earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. This Zacks Rank #3 company’s total revenues of $547.9 million lagged the Zacks Consensus Estimate of $550.2 million.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>