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What's in the Cards for Alaska Air (ALK) in Q2 Earnings?
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Alaska Air Group (ALK - Free Report) is scheduled to release second-quarter 2021 results on Jul 22.
The Zacks Consensus Estimate for second-quarter loss has narrowed by 8.3% in the past 60 days. The company has an average record with respect to earnings surprise history, having outperformed the Zacks Consensus Estimate in only two of the last four reported quarters while missing the same in the other two.
Let’s see how things are shaping up for Alaska Air this earnings season.
With improved air-travel demand, passenger revenues (accounting for bulk of the top line) are expected to have increased sequentially as well as year over year. The Zacks Consensus Estimate for passenger revenues in the second quarter indicates a more than 100% increase from the sequential quarter’s reported figure and over 300% surge from the year-ago period’s reported figure. The anticipated increase in passenger revenues is expected to get reflected in the company’s top line.
Since air-travel demand continues to be below the pre-pandemic levels, the company anticipates second-quarter 2021 revenues to decline 33-35% from the same period in 2019. In response to this weakness in travel demand, the airline has reduced its capacity. It expects capacity, measured in available seat miles (ASMs), to de down approximately 20% from the comparable period in 2019.
The reduction in capacity has been pushing up non-fuel unit costs, which in turn might have hurt the bottom line. Alaska Air estimates cost per ASM, excluding fuel and special items, to increase around 12-14% from the 2019 level.
With fuel expenses comprising a major chunk of airline expenditures, uptick in fuel prices might have further limited the bottom line. The company expects economic fuel cost per gallon to have been in the range of $1.91 - $1.93 in the second quarter, higher than $1.79 and $1.2 reported in the sequential quarter and the year-ago period, respectively. The Zacks Consensus Estimate for the same is pegged at $1.97.
What Does the Zacks Model Say?
The proven Zacks model predicts an earnings beat for Alaska Air this time around. This is because the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Alaska Air has an Earnings ESP of +23.77% as the Most Accurate Estimate is pegged at a loss of 51 cents, narrower than the Zacks Consensus Estimate of a loss of 66 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Alaska Air carries a Zacks Rank #3.
Highlights of Q1 Earnings
In the last-reported quarter, the company 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. Revenues of $797 million surpassed the Zacks Consensus Estimate of $787.1 million. The top line, however, declined 51.3% year over year with passenger revenues sliding 56% due to weak travel demand.
Other Stocks to Consider
Investors interested in the broader Transportation sector may also consider United Airlines (UAL - Free Report) , Southwest Airlines (LUV - Free Report) and Herc Holdings (HRI - Free Report) , as these stocks possess the right combination of elements to beat on earnings this reporting cycle as well.
United Airlines has an Earnings ESP of +5.61% and a Zacks Rank #3. The company will release second-quarter 2021 results on Jul 20.
Southwest Airlines has an Earnings ESP of +11.32% and is a Zacks #3 Ranked player. The company will release second-quarter 2021 results on Jul 22.
Herc Holdings has an Earnings ESP of +1.85% and carries a Zacks Rank #2 at present. The company will release second-quarter 2021 results on Jul 22.
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What's in the Cards for Alaska Air (ALK) in Q2 Earnings?
Alaska Air Group (ALK - Free Report) is scheduled to release second-quarter 2021 results on Jul 22.
The Zacks Consensus Estimate for second-quarter loss has narrowed by 8.3% in the past 60 days. The company has an average record with respect to earnings surprise history, having outperformed the Zacks Consensus Estimate in only two of the last four reported quarters while missing the same in the other two.
Let’s see how things are shaping up for Alaska Air this earnings season.
Alaska Air Group, Inc. Price and EPS Surprise
Alaska Air Group, Inc. price-eps-surprise | Alaska Air Group, Inc. Quote
Factor to Note
With improved air-travel demand, passenger revenues (accounting for bulk of the top line) are expected to have increased sequentially as well as year over year. The Zacks Consensus Estimate for passenger revenues in the second quarter indicates a more than 100% increase from the sequential quarter’s reported figure and over 300% surge from the year-ago period’s reported figure. The anticipated increase in passenger revenues is expected to get reflected in the company’s top line.
Since air-travel demand continues to be below the pre-pandemic levels, the company anticipates second-quarter 2021 revenues to decline 33-35% from the same period in 2019. In response to this weakness in travel demand, the airline has reduced its capacity. It expects capacity, measured in available seat miles (ASMs), to de down approximately 20% from the comparable period in 2019.
The reduction in capacity has been pushing up non-fuel unit costs, which in turn might have hurt the bottom line. Alaska Air estimates cost per ASM, excluding fuel and special items, to increase around 12-14% from the 2019 level.
With fuel expenses comprising a major chunk of airline expenditures, uptick in fuel prices might have further limited the bottom line. The company expects economic fuel cost per gallon to have been in the range of $1.91 - $1.93 in the second quarter, higher than $1.79 and $1.2 reported in the sequential quarter and the year-ago period, respectively. The Zacks Consensus Estimate for the same is pegged at $1.97.
What Does the Zacks Model Say?
The proven Zacks model predicts an earnings beat for Alaska Air this time around. This is because the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Alaska Air has an Earnings ESP of +23.77% as the Most Accurate Estimate is pegged at a loss of 51 cents, narrower than the Zacks Consensus Estimate of a loss of 66 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Alaska Air carries a Zacks Rank #3.
Highlights of Q1 Earnings
In the last-reported quarter, the company 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. Revenues of $797 million surpassed the Zacks Consensus Estimate of $787.1 million. The top line, however, declined 51.3% year over year with passenger revenues sliding 56% due to weak travel demand.
Other Stocks to Consider
Investors interested in the broader Transportation sector may also consider United Airlines (UAL - Free Report) , Southwest Airlines (LUV - Free Report) and Herc Holdings (HRI - Free Report) , as these stocks possess the right combination of elements to beat on earnings this reporting cycle as well.
United Airlines has an Earnings ESP of +5.61% and a Zacks Rank #3. The company will release second-quarter 2021 results on Jul 20.
Southwest Airlines has an Earnings ESP of +11.32% and is a Zacks #3 Ranked player. The company will release second-quarter 2021 results on Jul 22.
Herc Holdings has an Earnings ESP of +1.85% and carries a Zacks Rank #2 at present. The company will release second-quarter 2021 results on Jul 22.