We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Alaska Air Group (ALK) Q3 Earnings & Revenues Beat, Up Y/Y
Read MoreHide Full Article
Alaska Air Group, Inc. (ALK - Free Report) reported better-than-expected earnings and revenues in the third quarter of 2019. Following the release, shares of the company inched up 1.3% during after-hours trading on Oct 24.
The carrier’s third-quarteradjusted earnings per share (excluding 3 cents from non-recurring items) of $2.63 beat the Zacks Consensus Estimate of $2.62. Moreover, the bottom line surged 37.7% year over year on higher revenues and 77% drop in merger-related costs.
Revenues came in at $2,389 million, above the Zacks Consensus Estimate of $2,381 million. The top line also rose 8% year over year. Passenger revenues — contributing 92.5% to the top line — were up 8% on a year-over-year basis.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Airline traffic, measured in revenue passenger miles, rose 4.4% year over year in the reported quarter. Capacity or available seat miles expanded 3.4%. Load factor (percentage of seats occupied by passengers) improved 90 basis points to 85.8% as traffic growth outpaced capacity expansion in the quarter under review.
Total revenue per available seat mile (RASM: a key measure of unit revenues) increased 4.5% year over year to 13.64 cents in the quarter under discussion. Meanwhile, yield climbed 3.6% to 14.71 cents.
Operating Expenses & Income
In the quarter under review, total operating expenses were up 3% year over year to $1,967 million. Operating income surged 42% from the prior-year quarter’s level to $422 million. Fuel price (economic) was $2.13 per gallon, down 8.6% year over year. Consolidated cost per available seat mile — excluding fuel and special items — rose 3.4% to 8.43 cents.
Alaska Air exited the quarter with long-term debt of $1,444million compared with $1,617 million at the end of 2018. Adjusted debt-to-capitalization ratio was 42% compared with 47% in December 2018. The carrier repurchased 874,019 shares worth approximately $53 million in the first nine months of 2019.
Q4 Outlook
The company envisions capacity to rise approximately 3.8% year over year in the fourth quarter (compared with the previous expectation of 4% rise). Additionally, RASM is estimated to rise in the range of 1-4%. Non-fuel unit costs (excluding special items) are projected to inch up nearly 0.5% year over year (against the previous expectation of 1.2% decline). Meanwhile, economic fuel cost is projected to decline 8.1% year over year to $2.16 in the current quarter.
2019 Outlook
The company’s full-year forecast for capacity and non-fuel unit costs remains intact. While capacity is estimated to expand approximately 2.1%, non-fuel unit costs (excluding special items) are expected to rise nearly 2.2%.
Meanwhile, capital expenditures are now anticipated to be $700 million in the current year compared with prior projection of $725 million. Additionally, effective tax rate is predicted to be approximately 24%, lower than 26% anticipated previously.
Upcoming Releases
Investors interested in the broader Transportation sector are awaiting third-quarter 2019 earnings reports from key players like Expeditors International of Washington, Inc (EXPD - Free Report) , Air Lease Corporation (AL - Free Report) and Hertz Global Holdings, Inc (HTZ - Free Report) .
Hertz will release third-quarter earnings numbers on Nov 4. Expeditors and Air Lease will announce the same on Nov 5 and Nov 7, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Alaska Air Group (ALK) Q3 Earnings & Revenues Beat, Up Y/Y
Alaska Air Group, Inc. (ALK - Free Report) reported better-than-expected earnings and revenues in the third quarter of 2019. Following the release, shares of the company inched up 1.3% during after-hours trading on Oct 24.
The carrier’s third-quarteradjusted earnings per share (excluding 3 cents from non-recurring items) of $2.63 beat the Zacks Consensus Estimate of $2.62. Moreover, the bottom line surged 37.7% year over year on higher revenues and 77% drop in merger-related costs.
Revenues came in at $2,389 million, above the Zacks Consensus Estimate of $2,381 million. The top line also rose 8% year over year. Passenger revenues — contributing 92.5% to the top line — were up 8% on a year-over-year basis.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Alaska Air Group, Inc. price-consensus-eps-surprise-chart | Alaska Air Group, Inc. Quote
Operating Statistics
Airline traffic, measured in revenue passenger miles, rose 4.4% year over year in the reported quarter. Capacity or available seat miles expanded 3.4%. Load factor (percentage of seats occupied by passengers) improved 90 basis points to 85.8% as traffic growth outpaced capacity expansion in the quarter under review.
Total revenue per available seat mile (RASM: a key measure of unit revenues) increased 4.5% year over year to 13.64 cents in the quarter under discussion. Meanwhile, yield climbed 3.6% to 14.71 cents.
Operating Expenses & Income
In the quarter under review, total operating expenses were up 3% year over year to $1,967 million. Operating income surged 42% from the prior-year quarter’s level to $422 million. Fuel price (economic) was $2.13 per gallon, down 8.6% year over year. Consolidated cost per available seat mile — excluding fuel and special items — rose 3.4% to 8.43 cents.
Liquidity & Buybacks
At the end of the reported quarter, this Zacks Rank #2 (Buy) company had $1,619 million in cash and marketable securities compared with $1,236 million at the end of 2018. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alaska Air exited the quarter with long-term debt of $1,444million compared with $1,617 million at the end of 2018. Adjusted debt-to-capitalization ratio was 42% compared with 47% in December 2018. The carrier repurchased 874,019 shares worth approximately $53 million in the first nine months of 2019.
Q4 Outlook
The company envisions capacity to rise approximately 3.8% year over year in the fourth quarter (compared with the previous expectation of 4% rise). Additionally, RASM is estimated to rise in the range of 1-4%. Non-fuel unit costs (excluding special items) are projected to inch up nearly 0.5% year over year (against the previous expectation of 1.2% decline). Meanwhile, economic fuel cost is projected to decline 8.1% year over year to $2.16 in the current quarter.
2019 Outlook
The company’s full-year forecast for capacity and non-fuel unit costs remains intact. While capacity is estimated to expand approximately 2.1%, non-fuel unit costs (excluding special items) are expected to rise nearly 2.2%.
Meanwhile, capital expenditures are now anticipated to be $700 million in the current year compared with prior projection of $725 million. Additionally, effective tax rate is predicted to be approximately 24%, lower than 26% anticipated previously.
Upcoming Releases
Investors interested in the broader Transportation sector are awaiting third-quarter 2019 earnings reports from key players like Expeditors International of Washington, Inc (EXPD - Free Report) , Air Lease Corporation (AL - Free Report) and Hertz Global Holdings, Inc (HTZ - Free Report) .
Hertz will release third-quarter earnings numbers on Nov 4. Expeditors and Air Lease will announce the same on Nov 5 and Nov 7, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>