Alaska Air Q3 Earnings Marginally Fall Below Expectations, Cuts Annual Profit And Revenue Outlook

Alaska Air Group, Inc ALK reported Q3 adjusted EPS of $1.83, down from $2.53 a year ago and missing the consensus of $1.86.

The company reported sales of $2.84 billion, almost unchanged from the previous year's third quarter, slightly missing the consensus of $2.87 billion and in line with the management guidance of 0%-3% revenue growth.

Passenger revenues remained almost unchanged at $2.6 billion. The company generated adjusted pretax margins of 11.4%, down from 15.6% a year ago.

Revenue passengers increased 7% Y/Y, traffic increased 11%, capacity increased 14% Y/Y, and load factor contracted from 86.5% to 84.6%.

"Our 11.4% adjusted pretax margin is among the best in the industry despite external headwinds. Our investments in our all-Boeing fleet, premium seating on 100% of our aircraft and access for our loyalty members to a global alliance provide our guests with a premium domestic product that rivals any in the industry," said CEO Ben Minicucci. 

Alaska Air received five 737-9 aircraft and two E175 aircraft during the quarter, bringing the Alaska and Horizon fleets' totals to 56 and 41.

Q4 FY23 Guidance: Alaska Air sees revenue growth of 1%-4% Y/Y, with a capacity increase of around 11%-14%.

FY23 Outlook: The company expects revenue growth of 7%-8% versus the prior range of 8%-10%.

It forecasts capacity growth of 12%-13% compared to 11%-13% expected earlier.

Alaska Air expects EPS of $4.25-$4.75, down from the prior outlook of $5.50-$7.50 and consensus of $5.24.

Price Action: ALK shares are down 1.68% at $32.10 premarket on the last check Thursday.