Investors are on the edges of their seats, hoping that Alaska Air Group (NYSE: ALK) will top analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings on Thursday, Oct. 20. 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?: The majority of analysts back Alaska Air Group as a buy. But with 63.6% of analysts rating it a buy, Alaska Air Group is still below the mean analyst rating of its nearest 10 competitors, which average 64.4% buys. Analysts like Alaska Air Group better than competitor JetBlue Airways overall. Seven out of 15 analysts rate JetBlue Airways a buy compared to seven of 11 for Alaska Air Group. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $1.19 billion in revenue this quarter. That would represent a rise of 11.2% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $3.34 per share. Estimates range from $3.22 to $3.50.

What our community says:
The majority of CAPS All-Stars see ALK as a good bet, with 60.3% giving it an "outperform" rating. The majority of Fools are in agreement with the All-Stars, for 62.2% give it an "outperform" rating. Fools are keen on Alaska Air Group and haven't been shy with their opinions lately, logging 113 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 gross margin shrank by 9.8 percentage points in the last quarter. Revenue rose 13.7% while cost of sales rose 35.3% to $684.2 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 Q2 Q1 Q4 Q3
Gross Margin 38.4% 51.8% 50.8% 55.4%
Operating Margin 5.2% 13.9% 12.4% 20.3%
Net Margin 2.6% 7.7% 6.8% 11.5%
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