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Alaska Air Group’s (ALK - Free Report) fourth-quarter 2021 earnings (excluding 10 cents from non-recurring items) of 24 cents per share surpassed the Zacks Consensus Estimate of 17 cents. In the year-ago period, ALK incurred a loss of $2.55. Strong holiday travel demand and favorable pricing aided the December quarter’s results.
Operating revenues of $1,899 million outperformed the Zacks Consensus Estimate of $1,841.8 million. The top line surged more than 100% year over year with passenger revenues, accounting for 90.3% of the top line, soaring more than 100% owing to an improvement in air-travel demand from the pandemic-led lows. Passenger revenues totaled $1,715 million in the reported quarter. On a year-over-year basis, cargo and other revenues rose 28% to $55 million. Mileage plan other revenues accounted for the balance.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Total revenue per available seat mile (RASM: a key measure of unit revenues) jumped 59.2% year over year to 13.36 cents in the reported quarter. Yield inched up 0.9% to 15.2 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) soared more than 150% to 11.28 billion. To cater to this increased demand, capacity (measured in average seat miles) expanded 47.5% to 14.21 billion. Consolidated load factor (percentage of seats filled by passengers) increased 34.1 percentage points to 79.4% in the final quarter of 2021.
In the fourth quarter, total operating expenses (on a reported basis) escalated 33% year over year to $1,860 million with aircraft fuel expenses, including hedging gains and losses, skyrocketing more than 100%. Economic fuel price per gallon climbed 62.6% to $2.26 due to a spike in oil prices. However, consolidated operating costs per available seat mile (CASM: excluding fuel and special items) declined 10.8% to 10.12 cents.
With air-travel demand continuing to be below the pre-pandemic levels, the top line declined 15% from the fourth-quarter 2019 reading with passenger revenues falling 17%.
Liquidity
As of Dec 31, 2021, Alaska Air, carrying a Zacks Rank #5 (Strong Sell), had $3,116 million of cash and marketable securities compared with $3,346 million at the end of 2020.
ALK exited the fourth quarter with long-term debt (net of current portion) of $2,173 million compared with $2,357 million at the end of December 2020. Inclusive of operating leases, debt-to-capitalization ratio was 49% compared with 61% at the end of December 2020. This was the lowest level for the ratio since the first-quarter 2020 level.
Q122 Outlook
Due to the omicron-induced turbulence, Alaska Air trimmed its flight schedule for the current quarter. While providing outlook for first-quarter 2022, management stated that all comparisons are made with respect to the first quarter of 2019. ALK expects capacity for the March quarter to decline in the band of 10-13%. Revenue passengers are anticipated to fall 19-21%. Passenger load factor is estimated in the range of 71-74%. Total revenues are forecast to drop in the 14-17% range. CASM, excluding fuel and special items, is predicted to rise 15-18%. The unfavorable guidance includes a 7-point headwind due to the trimming of capacity. Alaska Air estimates economic fuel cost per gallon in the band of $2.45-$2.50.
J.B. Hunt Transport Services reported fourth-quarter 2021 earnings of $2.28 per share, surpassing the Zacks Consensus Estimate of $1.99. The bottom line surged 58.3% year over year on the back of higher revenues across all segments.
JBHT’s operating revenues of $3,497 million also outperformed the Zacks Consensus Estimate of $3,287.8 million. The top line jumped 27.7% year over year. Total operating revenues, excluding fuel surcharges, rose 21.7% year over year.
United Airlines incurred a loss (excluding 39 cents from non-recurring items) of $1.60 per share in the fourth quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $2.23. The amount of loss narrowed by 77.1% year over year.
UAL’s operating revenues of $8,192 million also outperformed the Zacks Consensus Estimate of $7,930.9 million. The top line surged more than 100% year over year, with passenger revenues, which accounted for 84% of the top line, soaring 185.4% to $6,878 million.
Delta reported fourth-quarter 2021 earnings (excluding 86 cents from non-recurring items) of 22 cents per share, outpacing the Zacks Consensus Estimate of 15 cents. Earnings came against the year-ago quarter’s loss of $2.53 per share. Strong holiday travel demand and favorable pricing aided the December-quarter results.
DAL’s revenues came in at $9,470 million, beating the Zacks Consensus Estimate of $9,232.1 million and also skyrocketing more than 100% from the year-ago figure as people resorted to air travel during the holidays.
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Alaska Air's (ALK) Q4 Earnings Beat, Revenues Surge Y/Y
Alaska Air Group’s (ALK - Free Report) fourth-quarter 2021 earnings (excluding 10 cents from non-recurring items) of 24 cents per share surpassed the Zacks Consensus Estimate of 17 cents. In the year-ago period, ALK incurred a loss of $2.55. Strong holiday travel demand and favorable pricing aided the December quarter’s results.
Operating revenues of $1,899 million outperformed the Zacks Consensus Estimate of $1,841.8 million. The top line surged more than 100% year over year with passenger revenues, accounting for 90.3% of the top line, soaring more than 100% owing to an improvement in air-travel demand from the pandemic-led lows. Passenger revenues totaled $1,715 million in the reported quarter. On a year-over-year basis, cargo and other revenues rose 28% to $55 million. Mileage plan other revenues accounted for the balance.
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 59.2% year over year to 13.36 cents in the reported quarter. Yield inched up 0.9% to 15.2 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) soared more than 150% to 11.28 billion. To cater to this increased demand, capacity (measured in average seat miles) expanded 47.5% to 14.21 billion. Consolidated load factor (percentage of seats filled by passengers) increased 34.1 percentage points to 79.4% in the final quarter of 2021.
In the fourth quarter, total operating expenses (on a reported basis) escalated 33% year over year to $1,860 million with aircraft fuel expenses, including hedging gains and losses, skyrocketing more than 100%. Economic fuel price per gallon climbed 62.6% to $2.26 due to a spike in oil prices. However, consolidated operating costs per available seat mile (CASM: excluding fuel and special items) declined 10.8% to 10.12 cents.
With air-travel demand continuing to be below the pre-pandemic levels, the top line declined 15% from the fourth-quarter 2019 reading with passenger revenues falling 17%.
Liquidity
As of Dec 31, 2021, Alaska Air, carrying a Zacks Rank #5 (Strong Sell), had $3,116 million of cash and marketable securities compared with $3,346 million at the end of 2020.
ALK exited the fourth quarter with long-term debt (net of current portion) of $2,173 million compared with $2,357 million at the end of December 2020. Inclusive of operating leases, debt-to-capitalization ratio was 49% compared with 61% at the end of December 2020. This was the lowest level for the ratio since the first-quarter 2020 level.
Q122 Outlook
Due to the omicron-induced turbulence, Alaska Air trimmed its flight schedule for the current quarter. While providing outlook for first-quarter 2022, management stated that all comparisons are made with respect to the first quarter of 2019. ALK expects capacity for the March quarter to decline in the band of 10-13%. Revenue passengers are anticipated to fall 19-21%. Passenger load factor is estimated in the range of 71-74%. Total revenues are forecast to drop in the 14-17% range. CASM, excluding fuel and special items, is predicted to rise 15-18%. The unfavorable guidance includes a 7-point headwind due to the trimming of capacity. Alaska Air estimates economic fuel cost per gallon in the band of $2.45-$2.50.
Sectorial Snapshots
Within the broader Transportation sector, J.B. Hunt Transport Services (JBHT - Free Report) , United Airlines (UAL - Free Report) and Delta Air Lines (DAL - Free Report) recently reported fourth-quarter 2021 results.
J.B. Hunt Transport Services reported fourth-quarter 2021 earnings of $2.28 per share, surpassing the Zacks Consensus Estimate of $1.99. The bottom line surged 58.3% year over year on the back of higher revenues across all segments.
JBHT’s operating revenues of $3,497 million also outperformed the Zacks Consensus Estimate of $3,287.8 million. The top line jumped 27.7% year over year. Total operating revenues, excluding fuel surcharges, rose 21.7% year over year.
United Airlines incurred a loss (excluding 39 cents from non-recurring items) of $1.60 per share in the fourth quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $2.23. The amount of loss narrowed by 77.1% year over year.
UAL’s operating revenues of $8,192 million also outperformed the Zacks Consensus Estimate of $7,930.9 million. The top line surged more than 100% year over year, with passenger revenues, which accounted for 84% of the top line, soaring 185.4% to $6,878 million.
Delta reported fourth-quarter 2021 earnings (excluding 86 cents from non-recurring items) of 22 cents per share, outpacing the Zacks Consensus Estimate of 15 cents. Earnings came against the year-ago quarter’s loss of $2.53 per share. Strong holiday travel demand and favorable pricing aided the December-quarter results.
DAL’s revenues came in at $9,470 million, beating the Zacks Consensus Estimate of $9,232.1 million and also skyrocketing more than 100% from the year-ago figure as people resorted to air travel during the holidays.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.