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Alaska Air (ALK) Q2 Earnings & Revenues Top Estimates, Up Y/Y
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Alaska Air Group, Inc. (ALK - Free Report) reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.
Quarterly earnings of $2.19 per share (excluding $1.10 from non-recurring items) beat the Zacks Consensus Estimate of $1.94. The bottom line surged more than 100% year over year.
Operating revenues of $2,658 million outperformed the Zacks Consensus Estimate of $2,590.3 million. The top line surged 74% year over year with passenger revenues accounting for 90.9% of the top line and soaring 79% owing to continued recovery in air-travel demand. Passenger revenues totaled $2,418 million in the reported quarter. On a year-over-year basis, cargo and other revenues rose 14% to $65 million. Mileage plan other revenues grew 48% to $175 million.
Total revenue per available seat mile (RASM: a key measure of unit revenues) jumped 49.6% year over year to 17.03 cents. Yield increased 34.4% to 17.59 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) soared 33% to 13.75 billion. To cater to this increased demand, capacity (measured in average seat miles) expanded 16.4% to 15.61 billion. Consolidated load factor (percentage of seats filled by passengers) increased 11.1 percentage points to 88.1% in the second quarter of 2022.
In the second quarter, total operating expenses (on a reported basis) escalated more than 100% year over year to $2,471 million, with aircraft fuel expenses, including hedging gains and losses, skyrocketing more than 100%. Economic fuel price per gallon climbed 97.9% to $3.76 due to a spike in oil prices, thanks to the Russia-Ukraine war. Consolidated operating costs per available seat mile (CASM: excluding fuel and special items) grew7.8% year over year to 9.92 cents.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
As of Jun 30, 2022, Alaska Airhad $3.43 billion of cash and marketable securities compared with $2.89 billion at the end of March 2022.
ALK exited the second quarter with long-term debt (net of current portion) of $1.96 billion compared with $2.08 billion at the end of March 2022. Debt-to-capitalization ratio was 50%,flat sequentially.
Q3 & Full-Year Outlook
Alaska Air expects total revenues to increase 16-19% from the second-quarter 2019 actuals. The company expects capacity to decline 5-8% in the third quarter from the comparable period in 2019. Revenues from passengers are estimated to fall 8-10% in the ongoing quarter from the 2019 level. Passenger load factor is expected to be in the range of 85-88%. CASM, excluding fuel and special items, is predicted to climb 16-19% in the current quarter from the 2019 level. Economic fuel cost per gallon is estimated to be in the band of $3.79-$3.89 in the third quarter. Adjusted tax rate is expected to be 24-25% in the third quarter.
Due to rising oil prices, among other factors, Alaska Air has reduced capacity expectations for the full year. The company now estimates capacity to decline up to 8-9% compared with the 2019 level against the previous expectation of decrease of 3%. Due to the anticipated reduction in capacity, ALK expects CASM, excluding fuel and special items, to increase 15-17% in 2022 from the 2019 level compared with the previous forecast of a rise of 6-8%. The company continues to expect 2022 adjusted pre-tax margin to be 6-9%.
Delta AirLines’ (DAL - Free Report) second-quarter 2022 earnings (excluding 29 cents from non-recurring items) of $1.44 per share fell short of the Zacks Consensus Estimate of $1.71. Escalated operating expenses induced the earnings miss. Multiple flight cancellations in May and June also hurt results. The earnings miss disappointed investors, resulting in the stock shedding value in early trading. In the year-ago quarter, Delta incurred a loss of $1.07 per share when air-travel demand was not as buoyant as in the current scenario.
DAL’s revenues came in at $13,824 million, which not only beat the Zacks Consensus Estimate of $13,608.9 million but also soared 94% from the year-ago quarter’s figure as air-travel demand rebounded from the pandemic lows. The uptick in air-travel demand in the United States can be gauged from the fact that 75.9% of second-quarter 2022 passenger revenues came from the domestic markets.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported better-than-expected second-quarter 2022 results, wherein both the earnings and revenues outperformed the Zacks Consensus Estimate.
JBHT’s quarterly earnings of $2.42 per share surpassed the Zacks Consensus Estimate of $1.61 and improved 50.3% year over year.
JBHT’s total operating revenues of $3,837.53 million also outperformed the Zacks Consensus Estimate of $2,908.37 million. The top line jumped 32% year over year on the back of strength across all segments. JBHT’s total operating revenues, excluding fuel surcharges, rose 21.2% year over year.
CSX Corporation (CSX - Free Report) ) reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.
CSX’s quarterly earnings of 50 cents per share (excluding 4 cents from non-recurring items) beat the Zacks Consensus Estimate of 47 cents and improved 25% year over year.
CSX’s total revenues of $3,815 million outperformed the Zacks Consensus Estimate of $2,990 million. The top line increased 28% year over year on the back of higher revenues in almost all markets, driven by pricing gains, fuel surcharge, and contribution from the acquisition of Quality Carriers. CSX’s overall revenues per unit increased 27%.
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Alaska Air (ALK) Q2 Earnings & Revenues Top Estimates, Up Y/Y
Alaska Air Group, Inc. (ALK - Free Report) reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.
Quarterly earnings of $2.19 per share (excluding $1.10 from non-recurring items) beat the Zacks Consensus Estimate of $1.94. The bottom line surged more than 100% year over year.
Operating revenues of $2,658 million outperformed the Zacks Consensus Estimate of $2,590.3 million. The top line surged 74% year over year with passenger revenues accounting for 90.9% of the top line and soaring 79% owing to continued recovery in air-travel demand. Passenger revenues totaled $2,418 million in the reported quarter. On a year-over-year basis, cargo and other revenues rose 14% to $65 million. Mileage plan other revenues grew 48% to $175 million.
Total revenue per available seat mile (RASM: a key measure of unit revenues) jumped 49.6% year over year to 17.03 cents. Yield increased 34.4% to 17.59 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) soared 33% to 13.75 billion. To cater to this increased demand, capacity (measured in average seat miles) expanded 16.4% to 15.61 billion. Consolidated load factor (percentage of seats filled by passengers) increased 11.1 percentage points to 88.1% in the second quarter of 2022.
In the second quarter, total operating expenses (on a reported basis) escalated more than 100% year over year to $2,471 million, with aircraft fuel expenses, including hedging gains and losses, skyrocketing more than 100%. Economic fuel price per gallon climbed 97.9% to $3.76 due to a spike in oil prices, thanks to the Russia-Ukraine war. Consolidated operating costs per available seat mile (CASM: excluding fuel and special items) grew7.8% year over year to 9.92 cents.
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 Jun 30, 2022, Alaska Airhad $3.43 billion of cash and marketable securities compared with $2.89 billion at the end of March 2022.
ALK exited the second quarter with long-term debt (net of current portion) of $1.96 billion compared with $2.08 billion at the end of March 2022. Debt-to-capitalization ratio was 50%,flat sequentially.
Q3 & Full-Year Outlook
Alaska Air expects total revenues to increase 16-19% from the second-quarter 2019 actuals. The company expects capacity to decline 5-8% in the third quarter from the comparable period in 2019. Revenues from passengers are estimated to fall 8-10% in the ongoing quarter from the 2019 level. Passenger load factor is expected to be in the range of 85-88%. CASM, excluding fuel and special items, is predicted to climb 16-19% in the current quarter from the 2019 level. Economic fuel cost per gallon is estimated to be in the band of $3.79-$3.89 in the third quarter. Adjusted tax rate is expected to be 24-25% in the third quarter.
Due to rising oil prices, among other factors, Alaska Air has reduced capacity expectations for the full year. The company now estimates capacity to decline up to 8-9% compared with the 2019 level against the previous expectation of decrease of 3%. Due to the anticipated reduction in capacity, ALK expects CASM, excluding fuel and special items, to increase 15-17% in 2022 from the 2019 level compared with the previous forecast of a rise of 6-8%. The company continues to expect 2022 adjusted pre-tax margin to be 6-9%.
Currently, Alaska Air carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Transportation Companies
Delta AirLines’ (DAL - Free Report) second-quarter 2022 earnings (excluding 29 cents from non-recurring items) of $1.44 per share fell short of the Zacks Consensus Estimate of $1.71. Escalated operating expenses induced the earnings miss. Multiple flight cancellations in May and June also hurt results. The earnings miss disappointed investors, resulting in the stock shedding value in early trading. In the year-ago quarter, Delta incurred a loss of $1.07 per share when air-travel demand was not as buoyant as in the current scenario.
DAL’s revenues came in at $13,824 million, which not only beat the Zacks Consensus Estimate of $13,608.9 million but also soared 94% from the year-ago quarter’s figure as air-travel demand rebounded from the pandemic lows. The uptick in air-travel demand in the United States can be gauged from the fact that 75.9% of second-quarter 2022 passenger revenues came from the domestic markets.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported better-than-expected second-quarter 2022 results, wherein both the earnings and revenues outperformed the Zacks Consensus Estimate.
JBHT’s quarterly earnings of $2.42 per share surpassed the Zacks Consensus Estimate of $1.61 and improved 50.3% year over year.
JBHT’s total operating revenues of $3,837.53 million also outperformed the Zacks Consensus Estimate of $2,908.37 million. The top line jumped 32% year over year on the back of strength across all segments. JBHT’s total operating revenues, excluding fuel surcharges, rose 21.2% year over year.
CSX Corporation (CSX - Free Report) ) reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.
CSX’s quarterly earnings of 50 cents per share (excluding 4 cents from non-recurring items) beat the Zacks Consensus Estimate of 47 cents and improved 25% year over year.
CSX’s total revenues of $3,815 million outperformed the Zacks Consensus Estimate of $2,990 million. The top line increased 28% year over year on the back of higher revenues in almost all markets, driven by pricing gains, fuel surcharge, and contribution from the acquisition of Quality Carriers. CSX’s overall revenues per unit increased 27%.