ALK's Q4 Earnings Coming Up: What's in the Offing for the Stock?

Core Viewpoint - Alaska Air Group (ALK) is set to report its fourth-quarter 2024 results on January 23, 2025, with expectations of strong revenue growth despite a downward revision in earnings per share estimates [1][2]. Financial Performance - The Zacks Consensus Estimate for ALK's fourth-quarter 2024 earnings per share has been revised downward by 26.6% to 47 cents, but this still represents a 56.7% increase from the previous year's actuals [2]. - The revenue estimate for the fourth quarter is projected at $3.51 billion, indicating a year-over-year growth of 37.6% [2]. - ALK has a history of earnings surprises, outperforming the Zacks Consensus Estimate in the last four quarters with an average beat of 23.2% [3]. Influencing Factors - The anticipated strong performance in the fourth quarter is expected to be driven by expanded global connectivity, leading to high passenger volumes, along with a dedicated loyalty program and cargo growth [4]. - The company plans to increase its capacity to meet high demand, with available seat miles expected to rise by 1.5-2.5% compared to the fourth quarter of 2023 [5]. Guidance and Costs - ALK has issued bullish EPS guidance for the fourth quarter, expecting earnings between 20 cents and 40 cents, supported by low fuel costs projected at $2.55-$2.65 per gallon [6]. - Despite the positive outlook, the current model does not predict a definitive earnings beat for ALK, with an Earnings ESP of -1.57% and a Zacks Rank of 1 [7]. Comparative Analysis - Other stocks in the transportation sector, such as American Airlines (AAL) and JetBlue Airways (JBLU), show promising earnings potential, with AAL having an Earnings ESP of +3.99% and JBLU at +7.73% [8][9].