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Alaska Air Q3 Earnings & Revenues Surpass Estimates, Rise Y/Y
Alaska Air Group, Inc. (ALK) reported solid third-quarter 2024 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Quarterly earnings per share (EPS) of $2.25 outpaced the Zacks Consensus Estimate of $2.20 and improved 22.9% on a year-over-year basis. The reported figure met the higher end of the guided range of $2.15-$2.25.
Find the latest EPS estimates and surprises on ZacksEarnings Calendar.
Operating revenues of $3.07 billion beat the Zacks Consensus Estimate of $2.98 billion. The top line jumped 8% year over year, with passenger revenues accounting for 91.8% of the top line and increasing 8% owing to continued recovery in air-travel demand.
Passenger revenues totaled $2.82 billion in the reported quarter. On a year-over-year basis, cargo and other revenues of $80 million grew 29% year over year. Mileage plan other revenues grew 8% to $171 million.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Alaska Air Group, Inc. price-consensus-eps-surprise-chart | Alaska Air Group, Inc. Quote
Given that Hawaiian Airlines was acquired on Sept. 18, 2024, ALK’s quarterly results include almost 13 days of Hawaiian Airlines results.
Other Q3 Details
All comparisons have been presented on a year-over-year basis unless mentioned otherwise.
Revenue per available seat mile (RASM: a key measure of unit revenues) grew 1.3% to 15.48 cents. Yield decreased 0.2% to 16.62 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) grew 8% to 16.97 billion. To cater to this increased demand, capacity (measured in average seat miles) grew 6.8% to 19.84 billion. As traffic outpaced capacity expansion, the consolidated load factor (percentage of seat occupancy) grew 0.9 percentage points to 85.5%. Our estimate is pegged at 83.3%.
In the third quarter, total operating expenses (on a reported basis) grew 4% to $2.73 billion.
Economic fuel price per gallon fell 19.9% to $2.61. The reported figure lies within the guided range of $2.60 to $2.70.
Consolidated operating costs per available seat mile (excluding fuel and special items) grew 6.9% to 10.16 cents.
Liquidity
As of Sept. 30, 2024, Alaska Air had $1.01 billion of cash and marketable securities compared with $1.11 billion at the end of the prior quarter. ALK exited the third quarter of 2024 with long-term debt (net of current portion) of $4.15 billion compared with $2.31 billion at the end of the prior quarter. Debt-to-capitalization ratio was 45%.
ALK generated $318 million of cash from operating activities in the reported quarter. During the third quarter of 2024, ALK repurchased nearly 367,705 shares for $14 million.
Outlook
ALK’s fourth-quarter guidance is inclusive of Hawaiian Airlines. ALK anticipates fourth-quarter 2024 adjusted EPS between 20 cents and 40 cents. The Zacks Consensus Estimate is currently pegged at $1.06.
For the fourth quarter of 2024, Alaska Air anticipates the economic fuel cost per gallon to be $2.55 to $2.65. The company expects available seat miles (a measure of capacity) to increase 1.5% to 2.5% in the fourth quarter of 2024 from the fourth quarter of 2023 actuals. CASM is expected to increase in high single digits. RASM is expected to increase in the mid-single digits.
For 2024, EPS is anticipated to remain above the midpoint of the prior guidance of $3.50 to $4.50 per share (including Hawaiian's results).The Zacks Consensus Estimate of $4.24 lies within the guidance.
Capital expenditures are still expected to be between $1.2 billion and $1.3 billion for 2024.
ALK’s Zacks Rank and Price Performance
Currently, ALK carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Over the past three months, shares of ALK have gained 38.7%, outperforming the industry’s growth of 15.4%.
Three-Month Price Comparison
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Performances of Other Transportation Companies
Delta Air Lines (DAL) reported third-quarter 2024 earnings (excluding 47 cents from non-recurring items) of $1.50 per share, which fell short of the Zacks Consensus Estimate of $1.56. Earnings decreased 26.11% on a year-over-year basis, mainly due to high labor costs.
DAL’s revenues of $15.68 billion surpassed the Zacks Consensus Estimate of $15.37 billion and increased 1.2% on a year-over-year basis, driven by strong air travel demand. Adjusted operating revenues (excluding third-party refinery sales) totaled $14.59 billion, flat year over year.
J.B. Hunt Transport Services, Inc. (JBHT)third-quarter 2024 earnings of $1.49 per share outpaced the Zacks Consensus Estimate of $1.42 but declined 17.2% year over year.
JBHT’s total operating revenues of $3.07 billionsurpassed the Zacks Consensus Estimate of $3.04 billion but fell 3% year over year. The downfall was owing to a 5% and 6% decrease in gross revenue per load in Intermodal (JBI) and Truckload (JBT), respectively, a decline in load volume of 10% and 6% in Integrated Capacity Solutions (ICS) and Dedicated Contract Services (DCS), respectively, and 6% fewer stops in Final Mile Services (FMS). These were partially offset by JBI load growth of 5%, which included growth in both the transcontinental and eastern networks and a 3% increase in revenue per load in ICS. JBHT’s total operating revenue, excluding fuel surcharge revenue, decreased less than 1% from the year-ago reported quarter.
United Airlines Holdings, Inc. (UAL)reported third-quarter 2024 EPS (excluding 43 cents from non-recurring items) of $3.33, which surpassed the Zacks Consensus Estimate of $3.10. Earnings decreased 8.8% on a year-over-year basis.
UAL’s operating revenues of $14.84 billion beat the Zacks Consensus Estimate of $14.76 billion. The top line increased 2.5% year over year due to upbeat air-travel demand. This was driven by a 1.6% rise in passenger revenues (which accounted for 91.3% of the top line) to $13.56 billion. Almost 45,559 passengers traveled on UAL flights in the third quarter, up 2.7% year over year.
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