Alaska Air Shares Slide On Mixed Q1 Results, Reaffirms FY23 Guidance

Alaska Air Group, Inc ALK reported first-quarter FY23 operating revenue growth of 31% year-over-year to $2.196 billion, marginally beating the consensus of $2.19 billion.
Passenger revenues improved by 31% Y/Y to $1.98 billion.
Adjusted EPS was $(0.62) compared to $(1.33) in 1Q22, missing the consensus of $(0.48).
Revenue passengers increased 13% Y/Y, traffic increased 19%, capacity increased 14% Y/Y, and load factor expanded 310 basis points to 79.9%.
Operating expenses increased by 27% Y/Y to $2.38 billion.
The company reported an operating loss of $(186) million, compared to $(202) million in 1Q22.
ALK resumed the share repurchase program, purchasing 413,554 shares for ~$18 million in the quarter, and expects to repurchase at least $100 million in 2023.
Alaska Air generated cash from operating activities of $222 million in the quarter versus $287 million in 1Q22.
Alaska Air held $2.4 billion in unrestricted cash and marketable securities as of March 31, 2023. It ended the quarter with a debt-to-capitalization ratio of 48%.
2Q23 Outlook: Alaska Air expects 2Q23 capacity growth Y/Y of 6% to 9%; total revenue growth Y/Y of 2.5% to 5.5%; and CASMex +1% to +3%
FY23 Outlook: ALK reiterated its adjusted pre-tax margins of 9% to 12% and EPS of $5.50 to $7.50 versus the consensus of $5.75.
Price Action: ALK shares are trading lower by 1.49% at $43 premarket on Thursday.

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