The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though? Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Alaska Air Group (ALK) . Brokerage Recommendation Trends for ALK ...

Alaska Air Group (ALK) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.Shares of this airline have returned -13.4% over the past month versus the Zacks S&P 500 composite's -0.7% change. The Zacks Transportation - Airline industry, to which Alaska Air belongs, has lost 11.5% over this period. Now the key question is: Where could the stock be headed in the near term?While media releases ...

Alaska Air (ALK) Q1 2025 Earnings Call April 24, 2025 07:13 PM ET Company Participants Ryan St. John - Vice President - Finance Planning & Investor RelationsBen Minicucci - CEO & PresidentAndrew Harrison - Executive Vice President and Chief Commercial OfficerShane Tackett - CFO & EVP, FinanceCatherine O'Brien - Vice PresidentTom Fitzgerald - VP - Equity ResearchJames Baker - Managing Director & Investment SpecialistDuane Pfennigwerth - Senior MDMichael Linenberg - Managing DirectorRavi Shanker - Managing Di ...

Core Viewpoint - Alaska Air Group, Inc. reported a first-quarter 2025 loss of 77 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 72 cents, but an improvement from a loss of 92 cents per share in the same quarter last year [1][3] Financial Performance - Operating revenues for the quarter were $3.14 billion, missing the Zacks Consensus Estimate of $3.16 billion, but representing a 41% year-over-year increase, with passenger revenues making up 89.5% of the total and increasing by 40% due to strong air-travel demand [1][2] - Passenger revenues totaled $2.81 billion, while cargo and other revenues grew 91% year-over-year to $122 million, and loyalty program revenues increased by 26% to $207 million [2] - Total operating expenses rose 39% to $3.33 billion, with economic fuel prices per gallon decreasing by 15.3% to $2.61 [6] Operational Metrics - Revenue per available seat mile (RASM) increased by 1.9% to 14.79 cents, and yield rose by 1.8% to 16.28 cents [4] - Consolidated traffic, measured in revenue passenger miles, grew by 37.8% to 17.25 billion, while capacity increased by 38% to 21.21 billion, leading to a slight decrease in load factor to 81.3% from 81.4% [5] Liquidity and Capital Structure - As of March 31, 2025, the company had $1.04 billion in cash and cash equivalents, down from $1.20 billion at the end of the previous quarter, and long-term debt decreased to $4.29 billion from $4.49 billion [7] - The debt-to-capitalization ratio stood at 58% at the end of the reported quarter, and the company repurchased 1.8 million shares for nearly $107 million during the first quarter [7] Future Outlook - The company anticipates a revenue impact of nearly 6 percentage points in the second quarter due to recent demand softness, with maximum cost pressure expected in the same period [8] - Adjusted earnings per share for the first quarter of 2025 are projected to be between $1.15 and $1.65, significantly lower than the Zacks Consensus Estimate of $2.52 [9] - Available seat miles are expected to increase by 2% to 3% in the second quarter of 2025 compared to the same period in 2024, while RASM is expected to remain flat to down low single digits [9]

Core Insights - The company reported a Q1 2025 GAAP net loss of $166 million and an adjusted net loss of $95 million due to challenging air travel demand conditions [2][7] - Despite the losses, the company remains confident in its Alaska Accelerate strategy, which aims for $10 earnings per share by 2027, and plans to maintain a $1 billion share buyback commitment over the next four years [4][9] - Q1 2025 total revenue reached $3.1 billion, a 9% increase year-over-year, driven by a 3.9% capacity growth [3][10] Financial Performance - Q1 2025 unit revenues increased by 5% year-over-year, outperforming peers [3][10] - Loyalty revenue generated $550 million in Q1 2025, up 12% year-over-year [3][10] - Premium revenue grew by 10% year-over-year, accounting for 34% of total revenues [3][10] Cost and Guidance - Q1 2025 unit costs rose by 2.1% year-over-year, which was better than expected [4][12] - For Q2 2025, the company expects earnings per share (EPS) to be between $1.15 and $1.65, reflecting a revenue impact of approximately six points due to the demand backdrop [4][12] - The company is pausing full-year guidance updates due to uncertain demand outlook [2][12] Strategic Initiatives - The Alaska Accelerate strategy focuses on scale, relevance, and loyalty, with integration synergies tracking slightly ahead of plan [4][9] - The company is launching a single loyalty platform and premium credit card in summer 2025 to enhance guest experience [5][9] - The company plans to expand its intercontinental service with new flights from Seattle to Tokyo Narita, aiming to serve at least 12 intercontinental destinations by 2030 [5][9] Market Position and Outlook - The company holds a substantial 15% cost advantage over its largest competitors and has a diversified revenue base, with nearly 50% generated outside the main cabin [9][12] - Despite current demand softness, the company expects to remain solidly profitable in 2025 [4][9] - The company is optimistic about its Hawaiian assets, which are expected to approach breakeven for the last three quarters of 2025 [5][9]

Financial Performance - For the quarter ended March 2025, Alaska Air Group reported revenue of $3.14 billion, which is a 40.6% increase compared to the same period last year [1] - The earnings per share (EPS) was -$0.77, an improvement from -$0.92 in the year-ago quarter [1] - The reported revenue was a surprise of -0.80% compared to the Zacks Consensus Estimate of $3.16 billion, while the EPS surprise was -6.94% against the consensus estimate of -$0.72 [1] Key Metrics - Passenger Load Factor was 81.3%, slightly below the average estimate of 82% [4] - Revenue Passenger Miles (RPM) totaled 17.26 billion, compared to the average estimate of 17.42 billion [4] - Total Revenue per Available Seat Mile (RASM) was 14.79 cents, below the average estimate of 15.05 cents [4] - Available Seat Miles (ASM) reached 21.22 billion, close to the average estimate of 21.24 billion [4] - Economic fuel cost per gallon was $2.61, slightly lower than the average estimate of $2.62 [4] - Passenger Yield was 16.28 cents, compared to the average estimate of 16.57 cents [4] - Operating expenses per ASM, excluding fuel and special items, were 11.89 cents, better than the average estimate of 12.49 cents [4] - Fuel gallons consumed were 262 million, exceeding the average estimate of 241.61 million [4] - Average full-time equivalent employees (FTEs) were 29,773, higher than the average estimate of 28,003 [4] - Revenue passengers totaled 13.16 billion, significantly above the average estimate of 10.36 billion [4] - Revenue from cargo and other sources was $122 million, surpassing the average estimate of $110.70 million, representing a year-over-year change of +90.6% [4] - Total Passenger Revenue was $2.81 billion, below the average estimate of $2.90 billion [4] Stock Performance - Shares of Alaska Air have returned -16.5% over the past month, compared to the Zacks S&P 500 composite's -6.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Alaska Air Group reported a quarterly loss of $0.77 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.72, but an improvement from a loss of $0.92 per share a year ago [1][2] Financial Performance - The company posted revenues of $3.14 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.80%, compared to revenues of $2.23 billion a year ago [2] - Over the last four quarters, Alaska Air has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Alaska Air shares have declined approximately 30.6% since the beginning of the year, while the S&P 500 has decreased by 10.1% [3] - The current Zacks Rank for Alaska Air is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.52 on revenues of $3.77 billion, and for the current fiscal year, it is $5.19 on revenues of $14.51 billion [7] - The trend of estimate revisions for Alaska Air is mixed, which could change following the recent earnings report [6] Industry Context - The Transportation - Airline industry is currently in the bottom 38% of over 250 Zacks industries, suggesting that the outlook for the industry can significantly impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Alaska Air Group reported a total operating revenue of $3.137 billion for Q1 2025, a 41% increase compared to $2.232 billion in Q1 2024 [24] - The company generated an operating cash flow of $459 million in the first quarter [20] - The net loss for Q1 2025 was $166 million, or $1.35 per share, compared to a net loss of $132 million, or $1.05 per share, in Q1 2024 [20][24] Operational Highlights - Capacity (ASMs) increased by approximately 3.9% year-over-year, exceeding prior expectations [5][6] - Revenue passenger miles (RPMs) grew by 37.8% year-over-year, reaching 17.257 billion [30] - The load factor for the quarter was 81.3%, slightly down from 81.4% in the previous year [30] Cost and Efficiency - Unit costs increased by 2.1% year-over-year, which was in line with expectations [7] - Economic fuel cost per gallon was reported at $2.61, down 15.3% from $3.08 in Q1 2024 [30] - The adjusted pretax margin improved to (4.5)% from (7.0)% year-over-year [20][40] Strategic Initiatives - The Alaska Accelerate plan aims to deliver $1 billion in incremental profit by 2027, with initial progress reported [2][3] - The integration of Hawaiian Airlines is yielding synergies, with Hawaiian unit revenue increasing by 8.8% year-over-year [8] - The company ratified new collective bargaining agreements with flight attendants, enhancing employee engagement [20] Future Outlook - For Q2 2025, the company anticipates a revenue impact of approximately 6 points due to recent demand softness [9] - Despite economic uncertainties, the company expects to remain solidly profitable in 2025 [13] - Full-year guidance for 2025 will be updated later in the year as the company assesses various scenarios [13]

Core Viewpoint - Alaska Airlines has warned of a decline in earnings for the second quarter due to softer travel demand, reflecting a broader trend among airlines experiencing weaker-than-expected bookings [1][2]. Group 1: Earnings Forecast and Performance - The company forecasts a 6-percentage point headwind in unit revenue due to softer demand, expecting second-quarter unit revenue to be flat to down as much as 6% year-over-year [1]. - Adjusted per-share earnings are anticipated to be between $1.15 and $1.65, significantly lower than the $2.47 per share forecasted by Wall Street analysts [1]. - In the first quarter, Alaska Airlines reported a net loss of $166 million, an increase from a loss of $132 million a year ago, with revenue exceeding $3.1 billion, up 41% year-over-year but below analysts' expectations [3][5]. Group 2: Revenue and Market Conditions - The airline's unit revenue rose by 5% in the first quarter compared to the previous year, outperforming larger rivals in domestic unit sales [2]. - Despite the economic uncertainty, the company expects to remain profitable even if revenue faces pressure in the second half of the year [2]. - The CFO noted that while customers are still booking trips, they are doing so at lower-than-expected fares, indicating a shift in market dynamics [2][3]. Group 3: Adjusted Loss and Analyst Expectations - Adjusting for one-time items, Alaska reported a loss of 77 cents per share for the three months ended March 31, which was below analysts' estimates of a 75 cents loss [4][5]. - Revenue for the first quarter was reported at $3.14 billion, slightly below the expected $3.17 billion [5].

Financial Performance - Alaska Air Group reported a total operating revenue of $3.137 billion for Q1 2025, a 41% increase compared to $2.232 billion in Q1 2024[22]. - The adjusted net loss for Q1 2025 was $95 million, or $0.77 per share, compared to a net loss of $116 million, or $0.92 per share, in Q1 2024[11]. - Total operating revenue for the three months ended March 31, 2025, was $3,137 million, a 9% increase from $2,877 million in the same period of 2024[45]. - Passenger revenue increased to $2,808 million, up 9% from $2,585 million year-over-year[45]. - The operating loss for the three months ended March 31, 2025, was $197 million, a 39% improvement from a loss of $325 million in the same period of 2024[45]. - The company reported a net loss of $166 million in Q1 2025, compared to a net loss of $132 million in Q1 2024[26]. Cash Flow and Liquidity - The company generated operating cash flow of $459 million in Q1 2025 and held $2.5 billion in unrestricted cash and marketable securities as of March 31, 2025[15]. - Net cash provided by operating activities was $459 million in Q1 2025, compared to $292 million in Q1 2024, an increase of 57.1%[26]. - Adjusted net debt decreased to $3,812 million from $3,918 million as of December 31, 2024[39]. - The debt-to-capitalization ratio remained stable at 58% for both March 31, 2025, and December 31, 2024[39]. Capacity and Operations - Capacity (ASMs) increased by approximately 3.9% in Q1 2025, exceeding prior expectations of 2.5% to 3.5% growth[5]. - Revenue passengers increased by 34.6% to 13,159,000 in Q1 2025 from 9,774,000 in Q1 2024[31]. - Revenue passenger miles (RPMs) increased by 4.0% to 17,257 million from 16,597 million in the previous year[45]. - The load factor for the three months ended March 31, 2025, was 81.3%, slightly up from 81.2% in the same period of 2024[45]. Expenses and Cost Management - Total operating expenses increased to $3,334 million in Q1 2025, up from $2,398 million in Q1 2024, a rise of 39.1%[36]. - Total operating expenses rose to $3,334 million, a 4% increase compared to $3,202 million in the prior year[45]. - The company reported a 10% decrease in aircraft fuel expenses, totaling $681 million compared to $759 million in the prior year[45]. - Economic fuel cost per gallon decreased by 15.3% to $2.61 in Q1 2025 from $3.08 in Q1 2024[31]. Strategic Initiatives - Alaska Air Group aims to deliver $1 billion in incremental profit by 2027 as part of its Alaska Accelerate strategic plan[2]. - The integration of Hawaiian Airlines is showing strong initial progress, with Hawaiian unit revenue increasing by 8.8% year-over-year[9]. - The company ratified a three-year collective bargaining agreement with over 6,900 flight attendants, enhancing employee engagement and benefits[15]. Shareholder Actions - The company repurchased 1.8 million shares for approximately $107 million in Q1 2025, with year-to-date repurchases totaling $149 million[15]. - The average full-time equivalent employees (FTEs) increased by 29.4% to 29,773 in Q1 2025 from 23,013 in Q1 2024[31].