Is A Beat Likely For Alaska Air Group (ALK) In Q4 Earnings?
Zacks Investment Research | Jan 23, 2020 08:51PM ET
Alaska Air Group, Inc. (NYSE:ALK) is scheduled to report fourth-quarter 2019 results on Jan 28, after the market closes.
The Zacks Consensus Estimate for fourth-quarter earnings has been revised 1.9% upward in the past 90 days. Moreover, the company flaunts an impressive earnings history, having outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 9.2%.
Let’s see whether the company is able to repeat its success story in the fourth quarter as well.
Factors Likely at Play
Alaska Air Group’s top line is anticipated to have benefited from higher passenger revenues (accounting for more than 90% of total revenues), courtesy of strong air travel demand. The Zacks Consensus Estimate for passenger revenues indicates a 6.8% rise from the year-ago reported figure. Additionally, the carrier anticipates total revenue per available seat mile (RASM) to have increased 4.1% year over year in the fourth quarter.
The company expects traffic or revenue passenger miles (RPMs) to have increased 3.9% in the to-be-reported quarter, highlighting the solid demand for Alaska Air Group’s services. The Zacks Consensus Estimate for the same implies a 4.5% rise from the year-earlier reported figure.
On the bottom-line front, the airline is expected to have gained from low fuel prices as expenses on fuel comprise a major chunk of airline expenditures. The consensus mark for economic fuel cost per gallon hints at a 5.5% decline from the fourth-quarter 2018 reported number. The company estimates fuel costs to have been $2.21 in the fourth quarter, indicating a decrease of 6% from that reported a year ago.
However, the positive impact of low fuel prices on earnings might have been partly offset by escalating non-fuel unit costs. Cost per available seat mile (CASM) excluding fuel and special items (or non-fuel unit costs) is expected to have increased in the soon-to-be-reported quarter due to lower capacity from irregular operations in Seattle and certain other factors. While the company predicts the metric to have inched up 0.8% in the quarter, the Zacks Consensus Estimate for the same suggests a 0.4% rise from the fourth-quarter 2018 reported figure.
Alaska Air Group, Inc. Price and EPS Surprise
Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.