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Alaska Air Group (ALK) Q4 Earnings In Line, Decline Y/Y
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Alaska Air Group, Inc. (ALK - Free Report) reported fourth-quarter 2017 earnings (excluding $2.14 from non-recurring items) of 83 cents, meeting the Zacks Consensus Estimate. The bottom line plunged 46.79% on a year-over-year basis.
Revenues came in at $1,962 million, marginally above the Zacks Consensus Estimate of $1,961.8 million. The top line also improved 28.7% on a year-over-year basis. Passenger revenues, accounting for a bulk of the top line (86.8%), surged 32.2% on a year-over-year basis.
Operating Statistics
Airline traffic, measured in revenue passenger miles, rose 37.6% year over year to 13,265 million in the reported quarter. Capacity or available seat miles expanded 39.4% to 15,901 million. Load factor (percentage of seat occupancy) contracted 110 basis points to 83.4% on capacity expansion outpacing traffic growth.
Passenger revenue per available seat mile (PRASM: a key measure of unit revenues) decreased 5.1% year over year to 10.71 cents. Total revenue per available seat mile (RASM) also declined 7.6% to 12.34 cents in the quarter under review while yield fell 3.9% to 12.84 cents.
Operating Expenses & Income
In the quarter under discussion, total operating expenses soared 40% year over year to $1,800 million. Operating income reduced 33% to $162 million from the prior-year quarter. Fuel price (economic) was $2 per gallon, up 19%. Consolidated unit cost or cost per available seat mile — excluding fuel and special items — nudged up 2.2% to 8.64 cents.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
At the end of the reported quarter, this Zacks Rank #3 (Hold) company had $1,621 million in cash and marketable securities compared with $1,580 million at the end of the comparable period in 2016. You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alaska Air Group exited the quarter with long-term debt of $2,262 million compared with $2,645 million at the end of 2016. At the reported quarter-end, adjusted debt-to-capitalization ratio was 51% compared with 59% at the end of comparable quarter in 2016. Moreover, the carrier has announced a dividend hike of 7% to 32 cents per share from the previous count of 30 cents.
Q1 & 2018 Forecast
For the first quarter of 2018, the carrier expects cost per available seat mile (CASM) excluding fuel and special items to rise approximately 6% year over year. While the same for 2018 is predicted to increase around 2.5%. Economic fuel cost per gallon is anticipated to grow 21% in the first quarter of 2018. While capacity is anticipated to expand around 8% in the first quarter. For the full year, the metric is likely to climb 7.5% whereas effective tax rate in 2018 is estimated to be approximately 24.5%.
Upcoming Releases
Investors interested in the broader Transportation sector keenly await fourth-quarter 2017 earnings reports from key players like Hawaiian Holdings, Inc. (HA - Free Report) , Allegiant Travel Company (ALGT - Free Report) and Union Spirit Airlines, Inc. (SAVE - Free Report) . While Hawaiian Holdings is scheduled to report fourth-quarter earnings on Jan 29, Allegiant and Spirit Airlines are slated to announce the same on Jan 31 and Feb 6, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Alaska Air Group (ALK) Q4 Earnings In Line, Decline Y/Y
Alaska Air Group, Inc. (ALK - Free Report) reported fourth-quarter 2017 earnings (excluding $2.14 from non-recurring items) of 83 cents, meeting the Zacks Consensus Estimate. The bottom line plunged 46.79% on a year-over-year basis.
Revenues came in at $1,962 million, marginally above the Zacks Consensus Estimate of $1,961.8 million. The top line also improved 28.7% on a year-over-year basis. Passenger revenues, accounting for a bulk of the top line (86.8%), surged 32.2% on a year-over-year basis.
Operating Statistics
Airline traffic, measured in revenue passenger miles, rose 37.6% year over year to 13,265 million in the reported quarter. Capacity or available seat miles expanded 39.4% to 15,901 million. Load factor (percentage of seat occupancy) contracted 110 basis points to 83.4% on capacity expansion outpacing traffic growth.
Passenger revenue per available seat mile (PRASM: a key measure of unit revenues) decreased 5.1% year over year to 10.71 cents. Total revenue per available seat mile (RASM) also declined 7.6% to 12.34 cents in the quarter under review while yield fell 3.9% to 12.84 cents.
Operating Expenses & Income
In the quarter under discussion, total operating expenses soared 40% year over year to $1,800 million. Operating income reduced 33% to $162 million from the prior-year quarter. Fuel price (economic) was $2 per gallon, up 19%. Consolidated unit cost or cost per available seat mile — excluding fuel and special items — nudged up 2.2% to 8.64 cents.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Alaska Air Group, Inc. Price, Consensus and EPS Surprise | Alaska Air Group, Inc. Quote
Liquidity
At the end of the reported quarter, this Zacks Rank #3 (Hold) company had $1,621 million in cash and marketable securities compared with $1,580 million at the end of the comparable period in 2016. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alaska Air Group exited the quarter with long-term debt of $2,262 million compared with $2,645 million at the end of 2016. At the reported quarter-end, adjusted debt-to-capitalization ratio was 51% compared with 59% at the end of comparable quarter in 2016. Moreover, the carrier has announced a dividend hike of 7% to 32 cents per share from the previous count of 30 cents.
Q1 & 2018 Forecast
For the first quarter of 2018, the carrier expects cost per available seat mile (CASM) excluding fuel and special items to rise approximately 6% year over year. While the same for 2018 is predicted to increase around 2.5%. Economic fuel cost per gallon is anticipated to grow 21% in the first quarter of 2018. While capacity is anticipated to expand around 8% in the first quarter. For the full year, the metric is likely to climb 7.5% whereas effective tax rate in 2018 is estimated to be approximately 24.5%.
Upcoming Releases
Investors interested in the broader Transportation sector keenly await fourth-quarter 2017 earnings reports from key players like Hawaiian Holdings, Inc. (HA - Free Report) , Allegiant Travel Company (ALGT - Free Report) and Union Spirit Airlines, Inc. (SAVE - Free Report) . While Hawaiian Holdings is scheduled to report fourth-quarter earnings on Jan 29, Allegiant and Spirit Airlines are slated to announce the same on Jan 31 and Feb 6, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>