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Alaska Air Group, Inc.

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Shares of Alaska Air Group have outperformed its industry over the past month. Ushering in further good news, the company reported better-than-expected earnings per share and revenues in the first quarter of 2018. Results were aided by the strong growth in passenger revenues. Apart from the outperformance in the quarter, the company's efforts to reward shareholders through dividends and buybacks. The company's efforts to expand its presence also raise optimism in the stock. However, high costs are limiting bottom line growth. In the first quarter of 2018, earnings declined year over year owing to high labor and fuel costs. High costs are likely to hurt the bottom line in the second quarter as well. The company's below-par performance with respect to unit revenues also concerns us.

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