Alaska Air Group ALK incurred a loss of $3.54 per share (excluding $1.81 from non-recurring items) in the second quarter of 2020, wider than the Zacks Consensus Estimate of a loss of $3.39. In the year-ago quarter, the company reported earnings of $2.17. Amid coronavirus concerns, significantly low air travel demand weighed on the company’s performance.
Revenues came in at $421 million, surpassing the Zacks Consensus Estimate of $307.7 million. The top line declined 82% year over year. Passenger revenues — contributing 73.4% to the top line — were down 85% on a year-over-year basis due to weak travel demand.
Consolidated traffic, measured in revenue passenger miles, declined 88.7% year over year in the reported quarter. Capacity (measured in available seat miles) dropped 74.6%. Load factor (percentage of seats occupied by passengers) deteriorated 4780 basis points to 38.4% as traffic declined more than the amount of capacity contraction.
Total revenue per available seat mile (“RASM”: a key measure of unit revenues) fell 27.5% year over year to 9.77 cents in the quarter under discussion. Meanwhile, yield increased 29.5% to 18.68 cents.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Alaska Air Group, Inc. price-consensus-eps-surprise-chart | Alaska Air Group, Inc. Quote
Operating Expenses & Income
In the second quarter, total operating expenses (on a reported basis) dropped 63% year over year to $709 million. Fuel price (economic) was $1.2 per gallon, down 47.1% year over year.
The company reported operating loss of $288 million in the second quarter against operating income of $364 million in the year-ago quarter. Consolidated cost per available seat mile — excluding fuel and special items — surged more than 100% to 21.87 cents.
At the end of the second quarter, this Seattle, WA-based company had $2,803 million in cash and marketable securities compared with $1,521 million at the end of 2019.
This Zacks Rank #3 (Hold) company exited the quarter with long-term debt of $1,549 million compared with $1,264 million at the end of 2019. Adjusted debt-to-capitalization ratio was 51% compared with 41% at the end of December 2019. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Within the broader Transportation sector, Delta Air Lines DAL, J.B. Hunt Transport Services JBHT and Kansas City Southern KSU recently reported second-quarter earnings numbers.
Delta, carrying a Zacks Rank #4 (Sell), incurred a loss (excluding $4.58 from non-recurring items) of $4.43 per share in the June quarter, wider than the Zacks Consensus Estimate of a loss of $3.97. Total revenues in the quarter came in at $1,468 million, surpassing the Zacks Consensus Estimate of $1,400.8 million.
J.B. Hunt, carrying a Zacks Rank #3, reported second-quarter earnings of $1.14 per share, which surpassed the Zacks Consensus Estimate by 31 cents. Total revenues of $2,145.6 million also beat the Zacks Consensus Estimate of $2,060.9 million.
Kansas City Southern’s second-quarter earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. This Zacks Rank #3 company’s total revenues of $547.9 million lagged the Zacks Consensus Estimate of $550.2 million.
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