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’s (ALK - Free Report) third-quarter 2021 earnings (excluding 6 cents from non-recurring items) of $1.47 per share surpassed the Zacks Consensus Estimate of $1.29. In the year-ago period, the company incurred a loss of $3.23. Results reflect the recovery in air-travel demand.
Operating revenues of $1,953 million outperformed the Zacks Consensus Estimate of $1,932 million. The top line surged more than 100% year over year with passenger revenues, accounting for 90.8% of the top line, soaring over 200%, thanks to improvement in air-travel demand from the pandemic-led lows. Passenger revenues totaled $1,774 million in the reported quarter. On a year-over-year basis, cargo and other revenues surged 31% to $59 million. Mileage plan other revenues accounted for the balance.
With air-travel demand continuing to be below the pre-pandemic levels, the top line declined 18% from the third quarter of 2019 with passenger revenues falling 20%.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Total revenue per available seat mile (RASM: a key measure of unit revenues) jumped 52.1% year over year to 13.54 cents in the reported quarter. Yield inched up 2.1% to 15.3 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) soared more than 200% to 11.59 billion. To cater to this increased demand, capacity (measured in average seat miles) expanded 83.3% to 14.43 billion. Consolidated load factor (percentage of seats filled by passengers) increased 31.8 percentage points to 80.3% in the third quarter.
In the third quarter, total operating expenses (on a reported basis) escalated 33% year over year to $1,695 million with aircraft fuel expenses, including hedging gains and losses, skyrocketing more than 200%. Economic fuel price per gallon climbed 55.3% to $2.05, due to spike in oil prices. However, consolidated operating costs per available seat mile (CASM: excluding fuel and special items) declined 39.1% to 8.45 cents.
Liquidity
As of Sep 30, 2021, Alaska Air, carrying a Zacks Rank #4 (Sell), had $3,195 million in cash and marketable securities compared with $3,346 million at the end of 2020.
The company exited the third quarter with long-term debt (net of current portion) of $2,225 million compared with $2,357 million at the end of December 2020. Inclusive of operating leases, debt-to-capitalization ratio was 51% compared with 61% at the end of December 2020.
Q4 Outlook
For the fourth quarter, Alaska Air expects capacity to decline approximately 13-16% from the comparable period in 2019. Revenue passengers are anticipated to fall 16-19% from the 2019 level. Passenger load factor is estimated in the range of 77-80%. Total revenues are forecast to drop around 16-19% from the 2019 level. CASM, excluding fuel and special items, is predicted to rise 7-9% from the fourth quarter of 2019. The company estimates economic fuel cost per gallon in the band of $2.2-$2.30.
Sectorial Snapshot
Within the broader Transportation sector, Delta Air Lines (DAL - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and Kansas City Southern recently reported third-quarter 2021 results.
Delta, carrying a Zacks Rank #4 (Sell), reported third-quarter earnings (excluding $1.59 from non-recurring items) of 30 cents per share, outpacing the Zacks Consensus Estimate of 15 cents. Revenues of $9,154 million also beat Zacks Consensus Estimate of $8,370.6 million.
J.B. Hunt, carrying a Zacks Rank #2 (Buy), reported third-quarter earnings of $1.88 per share, surpassing the Zacks Consensus Estimate of $1.77. Total operating revenues of $3144.8 million outperformed the Zacks Consensus Estimate of $3002.1 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Kansas City Southern, carrying a Zacks Rank #5 (Strong Sell), reported third-quarter earnings (excluding 31 cents from non-recurring items) of $2.02 per share, missing the Zacks Consensus Estimate of $2.07. Quarterly revenues of $744 million, however, surpassed the Zacks Consensus Estimate of $725.9 million.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Alaska Air's (ALK) Q3 Earnings Beat, Revenues Surge Y/Y
Alaska Air Group’s (ALK - Free Report) third-quarter 2021 earnings (excluding 6 cents from non-recurring items) of $1.47 per share surpassed the Zacks Consensus Estimate of $1.29. In the year-ago period, the company incurred a loss of $3.23. Results reflect the recovery in air-travel demand.
Operating revenues of $1,953 million outperformed the Zacks Consensus Estimate of $1,932 million. The top line surged more than 100% year over year with passenger revenues, accounting for 90.8% of the top line, soaring over 200%, thanks to improvement in air-travel demand from the pandemic-led lows. Passenger revenues totaled $1,774 million in the reported quarter. On a year-over-year basis, cargo and other revenues surged 31% to $59 million. Mileage plan other revenues accounted for the balance.
With air-travel demand continuing to be below the pre-pandemic levels, the top line declined 18% from the third quarter of 2019 with passenger revenues falling 20%.
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 (RASM: a key measure of unit revenues) jumped 52.1% year over year to 13.54 cents in the reported quarter. Yield inched up 2.1% to 15.3 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) soared more than 200% to 11.59 billion. To cater to this increased demand, capacity (measured in average seat miles) expanded 83.3% to 14.43 billion. Consolidated load factor (percentage of seats filled by passengers) increased 31.8 percentage points to 80.3% in the third quarter.
In the third quarter, total operating expenses (on a reported basis) escalated 33% year over year to $1,695 million with aircraft fuel expenses, including hedging gains and losses, skyrocketing more than 200%. Economic fuel price per gallon climbed 55.3% to $2.05, due to spike in oil prices. However, consolidated operating costs per available seat mile (CASM: excluding fuel and special items) declined 39.1% to 8.45 cents.
Liquidity
As of Sep 30, 2021, Alaska Air, carrying a Zacks Rank #4 (Sell), had $3,195 million in cash and marketable securities compared with $3,346 million at the end of 2020.
The company exited the third quarter with long-term debt (net of current portion) of $2,225 million compared with $2,357 million at the end of December 2020. Inclusive of operating leases, debt-to-capitalization ratio was 51% compared with 61% at the end of December 2020.
Q4 Outlook
For the fourth quarter, Alaska Air expects capacity to decline approximately 13-16% from the comparable period in 2019. Revenue passengers are anticipated to fall 16-19% from the 2019 level. Passenger load factor is estimated in the range of 77-80%. Total revenues are forecast to drop around 16-19% from the 2019 level. CASM, excluding fuel and special items, is predicted to rise 7-9% from the fourth quarter of 2019. The company estimates economic fuel cost per gallon in the band of $2.2-$2.30.
Sectorial Snapshot
Within the broader Transportation sector, Delta Air Lines (DAL - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and Kansas City Southern recently reported third-quarter 2021 results.
Delta, carrying a Zacks Rank #4 (Sell), reported third-quarter earnings (excluding $1.59 from non-recurring items) of 30 cents per share, outpacing the Zacks Consensus Estimate of 15 cents. Revenues of $9,154 million also beat Zacks Consensus Estimate of $8,370.6 million.
J.B. Hunt, carrying a Zacks Rank #2 (Buy), reported third-quarter earnings of $1.88 per share, surpassing the Zacks Consensus Estimate of $1.77. Total operating revenues of $3144.8 million outperformed the Zacks Consensus Estimate of $3002.1 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Kansas City Southern, carrying a Zacks Rank #5 (Strong Sell), reported third-quarter earnings (excluding 31 cents from non-recurring items) of $2.02 per share, missing the Zacks Consensus Estimate of $2.07. Quarterly revenues of $744 million, however, surpassed the Zacks Consensus Estimate of $725.9 million.