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Alaska Air (ALK) Q2 Earnings Beat Estimates, Rise Y/Y
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Alaska Air Group, Inc.(ALK - Free Report) reported second-quarter 2016 earnings per share of $2.12, which surpassed the Zacks Consensus Estimate of $2.08 and also increased 20% year over year. The commendable performance can be attributed to lower fuel costs.
Quarterly revenues also increased 4% year over year and were roughly in line with the Zacks Consensus Estimate of $1.5 billion. Passenger revenues accounted for bulk of the top line. On a year-over-year basis, passenger revenues improved 3%.
Operating Statistics
Airline traffic, measured in revenue passenger miles, rose 11.2% year over year to 9,397 million in the second quarter of 2016. Capacity or available seat miles increased 11.2% to 11,062 million. Load factor (percentage of seats filled by passengers) was 84.9%, flat year over year. Meanwhile, passenger revenue per available seat mile decreased 7.7% year over year to 11.42 cents.
Operating Expenses & Income
In the quarter under review, operating income surged 12% to $418 million from the prior-year quarter. Total operating expenses inched up 1% year over year to $1,076 million. Fuel price (economic) stood at $1.53 per gallon, down from $2.12 in the year-ago quarter. Meanwhile, consolidated unit cost or cost per available seat mile, excluding fuel and special items, fell 3.7% year over year to 7.78 cents.
Liquidity
At the end of the second quarter of 2016, Alaska Air Group had $1.6 billion in cash and marketable securities compared with $1,328 million at the end of fiscal 2015. During the quarter under review, the company had long-term debt of $509 million compared with $569 million at the end of 2015. At the end of the reported quarter, the adjusted debt-to-capitalization ratio was 25% versus 27% at 2015-end.
Alaska Air Group officially announced the Virgin America Inc. acquisition on Apr 4 this year. The transaction is expected to close by year-end and the new subsidiary will be headed by Peter Hunt, current Virgin America Senior Vice-president and Chief Financial Officer. The company recorded $14 million under social items related to merger costs.
Zacks Rank and Key Picks
Alaska Air Group currently carries a Zacks Rank #5 (Strong Sell). Better-ranked airline stocks include Cathay Pacific Airways Ltd. (CPCAY - Free Report) with a Zacks Rank #1 (Strong Buy) and ANA Holdings Inc. (ALNPY - Free Report) with a Zacks Rank #2 (Buy).
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Alaska Air (ALK) Q2 Earnings Beat Estimates, Rise Y/Y
Alaska Air Group, Inc.(ALK - Free Report) reported second-quarter 2016 earnings per share of $2.12, which surpassed the Zacks Consensus Estimate of $2.08 and also increased 20% year over year. The commendable performance can be attributed to lower fuel costs.
Quarterly revenues also increased 4% year over year and were roughly in line with the Zacks Consensus Estimate of $1.5 billion. Passenger revenues accounted for bulk of the top line. On a year-over-year basis, passenger revenues improved 3%.
Operating Statistics
Airline traffic, measured in revenue passenger miles, rose 11.2% year over year to 9,397 million in the second quarter of 2016. Capacity or available seat miles increased 11.2% to 11,062 million. Load factor (percentage of seats filled by passengers) was 84.9%, flat year over year. Meanwhile, passenger revenue per available seat mile decreased 7.7% year over year to 11.42 cents.
Operating Expenses & Income
In the quarter under review, operating income surged 12% to $418 million from the prior-year quarter. Total operating expenses inched up 1% year over year to $1,076 million. Fuel price (economic) stood at $1.53 per gallon, down from $2.12 in the year-ago quarter. Meanwhile, consolidated unit cost or cost per available seat mile, excluding fuel and special items, fell 3.7% year over year to 7.78 cents.
Liquidity
At the end of the second quarter of 2016, Alaska Air Group had $1.6 billion in cash and marketable securities compared with $1,328 million at the end of fiscal 2015. During the quarter under review, the company had long-term debt of $509 million compared with $569 million at the end of 2015. At the end of the reported quarter, the adjusted debt-to-capitalization ratio was 25% versus 27% at 2015-end.
ALASKA AIR GRP Price, Consensus and EPS Surprise
ALASKA AIR GRP Price, Consensus and EPS Surprise | ALASKA AIR GRP Quote
Virgin America Update
Alaska Air Group officially announced the Virgin America Inc. acquisition on Apr 4 this year. The transaction is expected to close by year-end and the new subsidiary will be headed by Peter Hunt, current Virgin America Senior Vice-president and Chief Financial Officer. The company recorded $14 million under social items related to merger costs.
Zacks Rank and Key Picks
Alaska Air Group currently carries a Zacks Rank #5 (Strong Sell). Better-ranked airline stocks include Cathay Pacific Airways Ltd. (CPCAY - Free Report) with a Zacks Rank #1 (Strong Buy) and ANA Holdings Inc. (ALNPY - Free Report) with a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>