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Post Earnings Coverage as Alaska Air Quarterly Revenue Surged 30%

Upcoming AWS Coverage on Southwest Airlines Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 4, 2017 / Active Wall St. announces its post-earnings coverage on Alaska Air Group, Inc. (NYSE: ALK). The Company reported its first quarter fiscal 2017 results on April 26, 2017. The fifth largest US airliner by passenger traffic had surpassed earnings estimates. Alaska Air's results reflect Virgin America results, which the Company acquired in December 2016 in a $2.6 billion deal. Register with us now for your free membership at:

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One of Alaska Air Group's competitors within the Regional Airlines space, Southwest Airlines Co. (NYSE: LUV), reported its Q1 financial results on Thursday, April 27, 2017. AWS will be initiating a research report on Southwest Airlines in the coming days.

Today, AWS is promoting its earnings coverage on ALK; touching on LUV. Get our free coverage by signing up to:

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Earnings Reviewed

For the three months ended March 31, 2017, Alaska Air generated revenues of $1.75 billion, up 30% compared to revenue of $1.35 billion in Q1 2016. The Company's revenue numbers fell short of analysts' consensus of $1.78 billion.

During Q1 2017, Alaska Air' total passenger revenues surged 31% on a y-o-y basis to $1.48 billion compared to total passenger revenue of $1.13 billion. In the passenger revenue segment, the Company's Mainline revenue soared 37% to $1.27 billion, while Regional revenue reported a modest increase of 3% to $212 million.

Alaska Air reported Q1 2017 GAAP net income of $99 million, or $0.79 per diluted share, compared to $184 million, or $1.46 per diluted share, in Q1 2016. Excluding the impact of special items and mark-to-market fuel hedge adjustments, the Company posted adjusted net income of $130 million, or $1.05 per diluted share, for the reported quarter compared to $183 million, or $1.45 per diluted share, in the year ago same period. Alaska Air's earnings numbers outperformed market estimates of $1.01 per share.

Operating Statistics

During Q1 2017, Alaska Air's revenue passenger miles, rose 36.6% on a y-o-y basis to 11,708 million compared to 8,571 million in Q1 2016. The Company's capacity or available seat miles surged 37.7% to 14.39 billion compared to 10.45 billion in the prior year's same quarter.

For Q1 2017, Alaska Air's Load factor (percentage of seats filled by passengers) decreased 70 basis points to 81.3% compared to 82.0% in Q1 2016, attributed to traffic growth being outpaced by capacity expansion. The Company's passenger revenue per available seat mile (PRASM) came in at 10.31 cents for the reported quarter, down compared to PRASM of 10.84 cents in the prior year's same quarter. Alaska Air's total revenue per available seat mile (RASM) declined 5.7% to 12.15 cents in Q1 2017 compared to 12.68 cents for Q1 2016.

In Q1 2017, Alaska Air's total operating expenses surged 50% to $1.58 billion, principally driven by a 33% rise in wages and benefits. The Company's operating income slumped 43% to $166 million for the reported quarter compared to $290 million for the corresponding year ago quarter. Alaska Air's economic fuel cost per gallon increased 38% on a y-o-y basis to $1.78, while cost per available seat mile – excluding fuel and special items fell 1.6% to 8.37 cents.

Cash Flow & Balance Sheet

For Q1 2017, Alaska Air generated approximately $470 million of operating cash flow and used approximately $215 million for capital expenditures, resulting in $255 million of free cash flow for the reported quarter. The Company held $1.7 billion in unrestricted cash and marketable securities as of March 31, 2017. At the end of Q1 2017, Alaska Air had long-term debt of $2.53 billion, while the Company's debt-to-capitalization ratio was 58%.

Stock Performance

On Wednesday, May 03, 2017, Alaska Air's share price finished the trading session at $86.60, slightly up by 0.13%. A total volume of 1.18 million shares exchanged hands. The stock has surged 20.74% and 24.88% in the last six months and past twelve months, respectively. The stock is trading at a PE ratio of 14.74 and has a dividend yield of 1.39%.

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SOURCE: Active Wall Street