Alaska Air Group Earnings Preview

Watch Alaska Air Group's (NYSE: ALK  ) earnings report to see if it can beat analyst expectations for the fourth consecutive quarter. The company will unveil its latest earnings Thursday. Alaska Air Group, through its subsidiaries, provides passenger air, freight, and mail services mainly to and within the state of Alaska and on the West Coast.

What analysts say

  • Buy, sell, or hold?: Analysts are bullish on this stock with seven analysts rating it as a buy and only one rating it as a sell. Analysts like Alaska Air Group better than competitor JetBlue Airways overall. Analysts haven't adjusted their rating of Alaska Air Group for the past three months.
  • Revenue forecasts: On average, analysts predict $1.11 billion in revenue this quarter. That would represent a rise of 13.7% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $2.35 per share. Estimates range from $1.95 to $2.49.

What our community says
The majority of the CAPS All-Stars who chimed in see ALK as a good bet, with 66.2% giving it an "outperform" rating. The majority of the other Foolish raters is in agreement with the All-Stars, as 61.8% give it an "outperform" rating. Fools are keen on Alaska Air Group and haven't been shy with their opinions lately, logging 112 posts in the past 30 days. Alaska Air Group's bearish CAPS rating of one out of five stars falls short of the Fool community sentiment.

Management
Alaska Air Group's profit has risen year over year by an average of more than fivefold. The company increased its gross margin by 6.8 percentage points in the last quarter. Revenue rose 16.3% while cost of sales rose 1.9% to $465.6 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

51.8%

50.8%

55.4%

48.2%

Operating Margin

13.9%

12.4%

20.3%

11.6%

Net Margin

7.7%

6.8%

11.5%

6.0%

One final thing: If you want to keep tabs on Alaska Air Group's movements, and for more analysis on the company, make sure you add it to your Watchlist.

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