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Alaska Air (ALK) Q2 Earnings & Revenues Beat Estimates, Up Y/Y
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Alaska Air Group, Inc. (ALK - Free Report) reported second-quarter 2023earnings per share (EPS) of $3.00, which outpaced the Zacks Consensus Estimate of $2.70 and improved 37% year over year.
Operating revenues of $2,838 million beat the Zacks Consensus Estimate of $2,780.5 million. The top line jumped 7% year over year, with passenger revenues accounting for 91.5% of the top line and increasing 7% due to continued recovery in air-travel demand.
Passenger revenues totaled $2,598 million in the reported quarter. On a year-over-year basis, cargo and other revenues of $70 million grew 8% year over year. Mileage plan other revenues fell 3% to $170 million.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Total revenue per available seat mile (a key measure of unit revenues) fell 3% year over year to 16.54 cents. Yield decreased 1% to 17.40 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) rose 9% to 14.93 billion. To cater to this increased demand, capacity (measured in average seat miles) expanded 10% to 17.16 billion. Consolidated load factor (percentage of seats filled by passengers) decreased 1.1 percentage points to 87% in the second quarter of 2023.
In the second quarter, total operating expenses (on a reported basis) escalated 1% year over year to $2,501 million.
Economic fuel price per gallon fell 27% to $2.76. Consolidated operating costs per available seat mile (excluding fuel and special items) grew 2% year over year to 10.15 cents. Our estimate indicates year-over-year growth of 1.5% to 10.06 cents.
Liquidity
As of Jun 30, 2023, Alaska Air had $2,442 million of cash and marketable securities compared with $2,429 million at the end of March 2023.
ALK exited the second quarter of 2023 with long-term debt (net of current portion) of $1,889 million compared with $1,795 million at March 2023-end. Debt-to-capitalization ratio was 48%, flat sequentially.
ALK generated $610 million in cash from operating activities in the second quarter.
ALK resumed the share repurchase program by purchasing 413,554 shares for $18 million in the first quarter of 2023. In the second quarter of 2023, ALK repurchased 871,987 shares for almost $39 million.
Outlook
For the third quarter of 2023, Alaska Air expects capacity to improve 10-13% from the year-ago reported figure. Cost per available seat mile, excluding fuel and special items, is expected to decline 0-2% year over year. Total revenues are anticipated to grow 0-3% year over year. ALK forecasts the economic fuel cost per gallon in the band of $2.70-$2.80. Adjusted pre-tax margin is anticipated to be between 14% and 16%.
For 2023, ALK continues to expect EPS between $5.50 and $7.50. The Zacks Consensus Estimate of $6.56 lies within the guidance.
The adjusted pre-tax margin is anticipated to be between 9% and 12%. The company continues to expect share repurchases of at least $100 million in 2023.
For 2023, Alaska Air expects capacity to improve 11-13% from the year-ago reported figure. Cost per available seat mile, excluding fuel and special items, is expected to decline 1-3% year over year. Total revenues are anticipated to grow 8-10% year over year.
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) second-quarter 2023 EPS of $1.81 missed the Zacks Consensus Estimate of $1.97 and declined 25.2% year over year.
JBHT’s total operating revenues of $3,132.6 million also lagged the Zacks Consensus Estimate of $3,347.5 million and fell 18.4% year over year. The downfall was due to a decline in revenue per load of 24% in Integrated Capacity Solutions, 13% in Intermodal, 21% in Truckload and a 4% decline in productivity in Dedicated Capacity Solutions on the back of changes in customer rate, freight mix and lower fuel surcharge revenue.
Total operating revenues, excluding fuel surcharges, decreased 14% year over year.
Delta Air Lines (DAL - Free Report) reported better-than-expected revenues and EPS, driven by strong air-travel demand. DAL’s second-quarter 2023 EPS (excluding 16 cents from non-recurring items) of $2.68 comfortably beat the Zacks Consensus Estimate of $2.42. DAL reported EPS of $1.44 a year ago, dull compared to the current scenario, as air-travel demand was not so buoyant then.
DAL’s total revenues of $15,578 million beat the Zacks Consensus Estimate of $14,991.6 million. Total revenues increased 12.69% on a year-over-year basis, driven by higher air-travel demand.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2023 EPS of $5.03, which outpaced the Zacks Consensus Estimate of $3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues increased 17.1% year over year due to upbeat air-travel demand. The year-over-year increase in the top line was driven by a 20.1% rise in passenger revenues (accounting for 91.7% of the top line) to $13,002 million. Nearly 42 million passengers traveled on UAL flights in the second quarter.
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Alaska Air (ALK) Q2 Earnings & Revenues Beat Estimates, Up Y/Y
Alaska Air Group, Inc. (ALK - Free Report) reported second-quarter 2023 earnings per share (EPS) of $3.00, which outpaced the Zacks Consensus Estimate of $2.70 and improved 37% year over year.
Operating revenues of $2,838 million beat the Zacks Consensus Estimate of $2,780.5 million. The top line jumped 7% year over year, with passenger revenues accounting for 91.5% of the top line and increasing 7% due to continued recovery in air-travel demand.
Passenger revenues totaled $2,598 million in the reported quarter. On a year-over-year basis, cargo and other revenues of $70 million grew 8% year over year. Mileage plan other revenues fell 3% to $170 million.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Alaska Air Group, Inc. price-consensus-eps-surprise-chart | Alaska Air Group, Inc. Quote
Total revenue per available seat mile (a key measure of unit revenues) fell 3% year over year to 16.54 cents. Yield decreased 1% to 17.40 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) rose 9% to 14.93 billion. To cater to this increased demand, capacity (measured in average seat miles) expanded 10% to 17.16 billion. Consolidated load factor (percentage of seats filled by passengers) decreased 1.1 percentage points to 87% in the second quarter of 2023.
In the second quarter, total operating expenses (on a reported basis) escalated 1% year over year to $2,501 million.
Economic fuel price per gallon fell 27% to $2.76. Consolidated operating costs per available seat mile (excluding fuel and special items) grew 2% year over year to 10.15 cents. Our estimate indicates year-over-year growth of 1.5% to 10.06 cents.
Liquidity
As of Jun 30, 2023, Alaska Air had $2,442 million of cash and marketable securities compared with $2,429 million at the end of March 2023.
ALK exited the second quarter of 2023 with long-term debt (net of current portion) of $1,889 million compared with $1,795 million at March 2023-end. Debt-to-capitalization ratio was 48%, flat sequentially.
ALK generated $610 million in cash from operating activities in the second quarter.
ALK resumed the share repurchase program by purchasing 413,554 shares for $18 million in the first quarter of 2023. In the second quarter of 2023, ALK repurchased 871,987 shares for almost $39 million.
Outlook
For the third quarter of 2023, Alaska Air expects capacity to improve 10-13% from the year-ago reported figure. Cost per available seat mile, excluding fuel and special items, is expected to decline 0-2% year over year. Total revenues are anticipated to grow 0-3% year over year. ALK forecasts the economic fuel cost per gallon in the band of $2.70-$2.80. Adjusted pre-tax margin is anticipated to be between 14% and 16%.
For 2023, ALK continues to expect EPS between $5.50 and $7.50. The Zacks Consensus Estimate of $6.56 lies within the guidance.
The adjusted pre-tax margin is anticipated to be between 9% and 12%. The company continues to expect share repurchases of at least $100 million in 2023.
For 2023, Alaska Air expects capacity to improve 11-13% from the year-ago reported figure. Cost per available seat mile, excluding fuel and special items, is expected to decline 1-3% year over year. Total revenues are anticipated to grow 8-10% year over year.
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.
Performances of Other Transportation Companies
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) second-quarter 2023 EPS of $1.81 missed the Zacks Consensus Estimate of $1.97 and declined 25.2% year over year.
JBHT’s total operating revenues of $3,132.6 million also lagged the Zacks Consensus Estimate of $3,347.5 million and fell 18.4% year over year. The downfall was due to a decline in revenue per load of 24% in Integrated Capacity Solutions, 13% in Intermodal, 21% in Truckload and a 4% decline in productivity in Dedicated Capacity Solutions on the back of changes in customer rate, freight mix and lower fuel surcharge revenue.
Total operating revenues, excluding fuel surcharges, decreased 14% year over year.
Delta Air Lines (DAL - Free Report) reported better-than-expected revenues and EPS, driven by strong air-travel demand. DAL’s second-quarter 2023 EPS (excluding 16 cents from non-recurring items) of $2.68 comfortably beat the Zacks Consensus Estimate of $2.42. DAL reported EPS of $1.44 a year ago, dull compared to the current scenario, as air-travel demand was not so buoyant then.
DAL’s total revenues of $15,578 million beat the Zacks Consensus Estimate of $14,991.6 million. Total revenues increased 12.69% on a year-over-year basis, driven by higher air-travel demand.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2023 EPS of $5.03, which outpaced the Zacks Consensus Estimate of $3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues increased 17.1% year over year due to upbeat air-travel demand. The year-over-year increase in the top line was driven by a 20.1% rise in passenger revenues (accounting for 91.7% of the top line) to $13,002 million. Nearly 42 million passengers traveled on UAL flights in the second quarter.