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Alaska Air (ALK) Q1 Loss Narrower than Expected, Revenues Beat

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Alaska Air Group (ALK - Free Report) , the parent company of Alaska Airlines, incurred a loss (excluding $2.46 from non-recurring items) of $3.51 per share, narrower than the Zacks Consensus Estimate of a loss of $3.71. In the year-ago quarter, the company incurred a loss of 82 cents. Results were hurt by significant decline in passenger revenues as coronavirus keeps air-travel demand suppressed.

Revenues at Alaska Air came in at $797 million, surpassing the Zacks Consensus Estimate of $787.1 million. The top line, however, declined 51.3% year over year. Passenger revenues — contributing 82.7% to the top line — were down 56% year over year to $659 million due to weak travel demand.

Other Details

Consolidated traffic, measured in revenue passenger miles, fell 49.4% year over year in the reported quarter. Consolidated capacity (measured in available seat miles) dropped 32.1%. Load factor (percentage of seats occupied by passengers) deteriorated 17.7 points to 51.9% as traffic plunged more than the amount of capacity contraction.

Total revenue per available seat mile (RASM: a key measure of unit revenues) slumped 28.3% year over year to 7.67 cents in the reported quarter. Meanwhile, yield declined 12.1% to 12.22 cents.

In the first quarter, total operating expenses (on a reported basis) dropped 51% year over year to $958 million. Consolidated fuel price (economic) was $1.79 per gallon, down 7.3% year over year. With most of the fleet remaining grounded/under-utilized, fuel gallons consumed were down 35.1% year over year. Consolidated cost per available seat mile excluding fuel and special items (non-fuel unit costs) increased 18.5% to 10.93 cents, mainly due to capacity cuts.

Alaska Air Group, Inc. Price, Consensus and EPS Surprise

Alaska Air Group, Inc. Price, Consensus and EPS Surprise

Alaska Air Group, Inc. price-consensus-eps-surprise-chart | Alaska Air Group, Inc. Quote

Liquidity

As of Mar 31, 2021, the company had $3.55 billion in cash and marketable securities compared with $3.35 billion at the end of 2020.

This Zacks Rank #3 (Hold) company exited the first quarter with long-term debt of $2.32 billion compared with $2.36 billion at December 2020-end. Inclusive of operating leases, debt-to-capitalization ratio was 62% compared with 61% at the end of December 2020. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

During the quarter, the company received $546 million in the form of grants and loans under the Payroll Support Program Extension. The airline expects to receive additional funding of $80 million in late April.

Sectorial Snapshot

Let’s take a look at some of the other recently released earnings reports from companies within the Zacks Transportation sector.

Delta Air Lines (DAL - Free Report) , carrying a Zacks Rank #4 (Sell), incurred a loss (excluding $1.70 from non-recurring items) of $3.55 per share, wider than the Zacks Consensus Estimate of a loss of $3.08. Meanwhile, total revenues of $4,150 million topped the Zacks Consensus Estimate of $3,821.3 million.

J.B. Hunt Transport Services (JBHT - Free Report) , a Zacks #3-Ranked player, reported earnings of $1.37 per share, beating the Zacks Consensus Estimate of $1.18. Total operating revenues of $2,618.1 million also surpassed the Zacks Consensus Estimate of $2,486.9 million.

Kansas City Southern (KSU - Free Report) , carrying a Zacks Rank of 3, reported earnings (excluding 23 cents from non-recurring items) of $1.91 per share, missing the Zacks Consensus Estimate of $2. Moreover, quarterly revenues of $706 million lagged the Zacks Consensus Estimate of $714.3 million.

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