Alaska Air Group reports third quarter 2018 results

Alaska Airlines Boeing 737-890 SSWL N589AS (msn 35686) SNA (Michael B. Ing). Image: 944063.

Financial Highlights:

  • Reported net income for the third quarter under Generally Accepted Accounting Principles (GAAP) of $217 million, or $1.75 per diluted share, compared to net income of $259 million, or $2.09 per diluted share in the third quarter of 2017. As the company has recently implemented new accounting standards, including the standards relating to revenue recognition and retirement benefits, 2017 financial information has been adjusted.
  • Reported net income for the third quarter, excluding special items such as merger-related costs and mark-to-market fuel hedge accounting adjustments, of $237 million, or $1.91 per diluted share, compared to $270 million or $2.18 per diluted share, in the third quarter of 2017. This quarter’s adjusted results compare to the First Call analyst consensus estimate of $1.81 per share.
  • Paid a $0.32 per-share quarterly cash dividend in the third quarter, a 7% increase over the dividend paid in the third quarter of 2017.
  • Repurchased a total of 582,942 shares of common stock for approximately $37 million in the first nine months of 2018.
  • Generated approximately $1 billion of operating cash flow in the first nine months of 2018, including merger-related costs and other special items.
  • Held $1.4 billion in unrestricted cash and marketable securities as of Sept. 30, 2018.
  • Reduced debt-to-capitalization ratio to 49% as of Sept. 30, 2018, compared to 53% as of Dec. 31, 2017, and down from 59% immediately following our acquisition of Virgin America. Reduced long-term debt balance to $1.7 billion as of Sept. 30, 2018 from $2.6 billion as of Dec. 31, 2016.

Operational Highlights:

  • Updated food and beverage menus to highlight West Coast inspired fresh meals, snacks and local craft beers further enhancing the airline’s onboard guest experience.
  • Announced one new route to Columbus, Ohio, which will begin service in March 2019, and two new routes to El Paso, Texas, which will begin service in February 2019.
  • Began our fleet-wide installation of satellite Wi-Fi, completing three Airbus aircraft during the quarter.
  • Completed the painting of Alaska livery on 16 Airbus aircraft, and expect to have 33 completed by the end of the year.
  • Finalized the integrated seniority list for our pilots; all groups except for aircraft technicians are now under a single contract and have an integrated seniority list.
  • Added three Boeing 737-900ER aircraft to the mainline operating fleet and four Embraer 175 (E175) aircraft to the regional operating fleet in the third quarter of 2018.

Alaska Air Group, Inc., today reported third quarter 2018 GAAP net income of $217 million, or $1.75 per diluted share, compared to $259 million, or $2.09 per diluted share in the third quarter of 2017. Excluding the impact of merger-related costs and mark-to-market fuel hedge adjustments, the company reported adjusted net income of $237 million, or $1.91 per diluted share, compared to $270 million, or $2.18 per diluted share, in 2017.

“In the nearly two years since our merger closed, we’ve now completed approximately 90 percent of our integration milestones,” said Alaska CEO Brad Tilden. “With that work now behind us, we are doubling down on what we do best – keeping fares low, delivering leading operational performance and offering top-rated customer service. The recent recognition by Condé Nast Traveler shows what our people can accomplish when we focus on what’s most important and pull together as one team.”

The following table reconciles the company’s reported GAAP net income and earnings per diluted share (diluted EPS) for the three and nine months ended Sept. 30, 2018 and 2017 to adjusted amounts.

Statistical data, as well as a reconciliation of the reported non-GAAP financial measures, can be found in the accompanying tables. A glossary of financial terms can be found on the last page of this release.

Top Copyright Photo (all others by Alaska): Alaska Airlines Boeing 737-890 SSWL N589AS (msn 35686) SNA (Michael B. Ing). Image: 944063.

Alaska Airlines aircraft slide show:

x

 

Advertisements