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Alaska Air (ALK) Expects Q1 Loss Due to 737-9 MAX Grounding
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Alaska Air Group, Inc. (ALK - Free Report) provided unfavorable guidance for the first quarter of 2024. Notably, regulatory issues at Boeing (BA - Free Report) have hurt Alaska Air’s results.
We note that Boeing has been under the scanner ever since Alaska Airlines’ Ontario, CA-bound flight (1282) on Jan 5, 2024, saw a panel and window being blown out of the Boeing 737 MAX 9 jet shortly after takeoff from Portland, OR. Alaska Airlines is a wholly-owned subsidiary of Alaska Air Group.
Owing to issues of Flight 1282 and the Boeing 737-9 MAX grounding, ALK’s profitability was unfavorably affected by at least $150 million. So far, Boeing has partially compensated ALK, which will be accounted for in earnings in the first quarter.
Notably, ALK now anticipates adjusted loss in the range of 55-45 cents per share for the first quarter of 2024. The earlier expectation was adjusted earnings in the range of $3- $5 per share.
ALK expects its first-quarter available seat miles (ASMs or capacity) to decline 2.5% from the year-ago period. Economic fuel cost per gallon is anticipated to be around $3.10.
Full-year 2024 capacity expectations are still in flux owing to uncertainty related to the timing of aircraft deliveries as a result of increased Federal Aviation Administration and Department of Justice scrutiny on Boeing and its operations.
Zacks Rank and Stocks to Consider
Currently, Alaska Air carries a Zacks Rank #3 (Hold).
GATX has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in three of the last four quarters (missing the mark in the remaining one). The average beat is 16.47%.
The Zacks Consensus Estimate for 2024 earnings has been revised 8.9% upward over the past 90 days. GATX has an expected earnings growth rate of 6.51% for 2024. Shares of GATX have gained 26% in the past year.
SkyWest's fleet-modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s 2024 earnings has improved 27.3% over the past 90 days. Shares of SKYW have surged 242.3% in the past year.
SKYW has an expected earnings growth rate of more than 100% for 2024. SKYW delivered a trailing four-quarter earnings surprise of 128.02%, on average.
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Alaska Air (ALK) Expects Q1 Loss Due to 737-9 MAX Grounding
Alaska Air Group, Inc. (ALK - Free Report) provided unfavorable guidance for the first quarter of 2024. Notably, regulatory issues at Boeing (BA - Free Report) have hurt Alaska Air’s results.
We note that Boeing has been under the scanner ever since Alaska Airlines’ Ontario, CA-bound flight (1282) on Jan 5, 2024, saw a panel and window being blown out of the Boeing 737 MAX 9 jet shortly after takeoff from Portland, OR. Alaska Airlines is a wholly-owned subsidiary of Alaska Air Group.
Owing to issues of Flight 1282 and the Boeing 737-9 MAX grounding, ALK’s profitability was unfavorably affected by at least $150 million. So far, Boeing has partially compensated ALK, which will be accounted for in earnings in the first quarter.
Notably, ALK now anticipates adjusted loss in the range of 55-45 cents per share for the first quarter of 2024. The earlier expectation was adjusted earnings in the range of $3- $5 per share.
ALK expects its first-quarter available seat miles (ASMs or capacity) to decline 2.5% from the year-ago period. Economic fuel cost per gallon is anticipated to be around $3.10.
Full-year 2024 capacity expectations are still in flux owing to uncertainty related to the timing of aircraft deliveries as a result of increased Federal Aviation Administration and Department of Justice scrutiny on Boeing and its operations.
Zacks Rank and Stocks to Consider
Currently, Alaska Air carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Transportation sector are GATX Corporation (GATX - Free Report) and SkyWest, Inc. (SKYW - Free Report) . Each stock presently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
GATX has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in three of the last four quarters (missing the mark in the remaining one). The average beat is 16.47%.
The Zacks Consensus Estimate for 2024 earnings has been revised 8.9% upward over the past 90 days. GATX has an expected earnings growth rate of 6.51% for 2024. Shares of GATX have gained 26% in the past year.
SkyWest's fleet-modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s 2024 earnings has improved 27.3% over the past 90 days. Shares of SKYW have surged 242.3% in the past year.
SKYW has an expected earnings growth rate of more than 100% for 2024. SKYW delivered a trailing four-quarter earnings surprise of 128.02%, on average.