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Alaska Air (ALK) Q4 Earnings Surpass Estimates, Rise Y/Y
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Alaska Air Group, Inc. (ALK - Free Report) reported mixed fourth-quarter 2022 results, wherein earnings outperformed the Zacks Consensus Estimate but revenues missed the same.
Quarterly earnings of 92 cents per share beat the Zacks Consensus Estimate of 90 cents. The bottom line surged more than 100% year over year.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Operating revenues of $2,479 million missed the Zacks Consensus Estimate of $2,504.4 million. The top line jumped 31% year over year, with passenger revenues accounting for 91.3% of the top line and increasing 32% owing to continued recovery in air-travel demand.
Passenger revenues totaled $2,264 million in the reported quarter. On a year-over-year basis, cargo and other revenues rose 5% to $58 million. Mileage plan other revenues grew 22% to $157 million.
Total revenue per available seat mile (a key measure of unit revenues) jumped 23.4% year over year to 16.49 cents. Yield increased 15.9% to 17.61 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) rose 14% to 12.85 billion. To cater to this increased demand, capacity (measured in average seat miles) expanded 5.8% to 15.03 billion. Consolidated load factor (percentage of seats filled by passengers) increased 6.1 percentage points to 85.5% in the fourth quarter of 2022.
In the fourth quarter, total operating expenses (on a reported basis) escalated 32% year over year to $2,456 million, with aircraft fuel expenses, including hedging gains and losses, skyrocketing 57%.
Economic fuel price per gallon climbed 57.1% to $3.55. Consolidated operating costs per available seat mile (excluding fuel and special items) grew 10.1% year over year to 11.14 cents.
Liquidity
As of Dec 31, 2022, Alaska Air had $2.42 billion of cash and marketable securities compared with $3.15 billion at the end of September 2022.
ALK exited the fourth quarter with long-term debt (net of current portion) of $1.88 billion compared with $1.89 billion at the end of September 2022. Debt-to-capitalization ratio was 49%, flat sequentially.
ALK generated $9 million cash from operating activities in the fourth quarter.
Outlook
Alaska Air announced plans to resume share repurchases in early 2023. Repurchases are anticipated to lie between $75 million and $100 million in 2023.
United Airlines’ (UAL - Free Report) fourth-quarter 2022 earnings of $2.46 per share beat the Zacks Consensus Estimate of $2.07. In the year-ago quarter, UAL incurred a loss of $1.60 per share when air-travel demand was not as buoyant as in the current scenario. The fourth quarter of 2022 was the third consecutive profitable quarter at UAL since the onset of the pandemic.
Operating revenues of $12,400 million beat the Zacks Consensus Estimate of $12,230 million. UAL’s revenues increased 51.37% year over year owing to upbeat air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.9% from fourth-quarter 2019 (pre-coronavirus) levels.
Delta Air Lines’ (DAL - Free Report) fourth-quarter 2022 earnings (excluding 19 cents from non-recurring items) of $1.48 per share beat the Zacks Consensus Estimate of $1.29 per share. DAL reported earnings of 22 cents per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $13,435 million, which also surpassed the Zacks Consensus Estimate of $13,030.3 million. Driven by the high air-travel demand, total revenues increased more than 41.87% on a year-over-year basis.
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) fourth-quarter 2022 earnings of $1.92 per share missed the Zacks Consensus Estimate of $2.45 and declined 16% year over year.
JBHT’s total operating revenues of $3,649.62 million also lagged the Zacks Consensus Estimate of $3,796.8 million. The top line jumped 4.4% year over year. Total operating revenues, excluding fuel surcharges, fell 2.9% year over year.
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Alaska Air (ALK) Q4 Earnings Surpass Estimates, Rise Y/Y
Alaska Air Group, Inc. (ALK - Free Report) reported mixed fourth-quarter 2022 results, wherein earnings outperformed the Zacks Consensus Estimate but revenues missed the same.
Quarterly earnings of 92 cents per share beat the Zacks Consensus Estimate of 90 cents. The bottom line surged more than 100% year over year.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Alaska Air Group, Inc. price-consensus-eps-surprise-chart | Alaska Air Group, Inc. Quote
Operating revenues of $2,479 million missed the Zacks Consensus Estimate of $2,504.4 million. The top line jumped 31% year over year, with passenger revenues accounting for 91.3% of the top line and increasing 32% owing to continued recovery in air-travel demand.
Passenger revenues totaled $2,264 million in the reported quarter. On a year-over-year basis, cargo and other revenues rose 5% to $58 million. Mileage plan other revenues grew 22% to $157 million.
Total revenue per available seat mile (a key measure of unit revenues) jumped 23.4% year over year to 16.49 cents. Yield increased 15.9% to 17.61 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) rose 14% to 12.85 billion. To cater to this increased demand, capacity (measured in average seat miles) expanded 5.8% to 15.03 billion. Consolidated load factor (percentage of seats filled by passengers) increased 6.1 percentage points to 85.5% in the fourth quarter of 2022.
In the fourth quarter, total operating expenses (on a reported basis) escalated 32% year over year to $2,456 million, with aircraft fuel expenses, including hedging gains and losses, skyrocketing 57%.
Economic fuel price per gallon climbed 57.1% to $3.55. Consolidated operating costs per available seat mile (excluding fuel and special items) grew 10.1% year over year to 11.14 cents.
Liquidity
As of Dec 31, 2022, Alaska Air had $2.42 billion of cash and marketable securities compared with $3.15 billion at the end of September 2022.
ALK exited the fourth quarter with long-term debt (net of current portion) of $1.88 billion compared with $1.89 billion at the end of September 2022. Debt-to-capitalization ratio was 49%, flat sequentially.
ALK generated $9 million cash from operating activities in the fourth quarter.
Outlook
Alaska Air announced plans to resume share repurchases in early 2023. Repurchases are anticipated to lie between $75 million and $100 million in 2023.
Currently, Alaska Air carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Transportation Companies
United Airlines’ (UAL - Free Report) fourth-quarter 2022 earnings of $2.46 per share beat the Zacks Consensus Estimate of $2.07. In the year-ago quarter, UAL incurred a loss of $1.60 per share when air-travel demand was not as buoyant as in the current scenario. The fourth quarter of 2022 was the third consecutive profitable quarter at UAL since the onset of the pandemic.
Operating revenues of $12,400 million beat the Zacks Consensus Estimate of $12,230 million. UAL’s revenues increased 51.37% year over year owing to upbeat air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.9% from fourth-quarter 2019 (pre-coronavirus) levels.
Delta Air Lines’ (DAL - Free Report) fourth-quarter 2022 earnings (excluding 19 cents from non-recurring items) of $1.48 per share beat the Zacks Consensus Estimate of $1.29 per share. DAL reported earnings of 22 cents per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $13,435 million, which also surpassed the Zacks Consensus Estimate of $13,030.3 million. Driven by the high air-travel demand, total revenues increased more than 41.87% on a year-over-year basis.
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) fourth-quarter 2022 earnings of $1.92 per share missed the Zacks Consensus Estimate of $2.45 and declined 16% year over year.
JBHT’s total operating revenues of $3,649.62 million also lagged the Zacks Consensus Estimate of $3,796.8 million. The top line jumped 4.4% year over year. Total operating revenues, excluding fuel surcharges, fell 2.9% year over year.