Alaska Air Profit Hit by Merger Costs
October 20 2016 - 7:40AM
Dow Jones News
Alaska Air Group Inc. said profit fell in the third quarter,
hurt by merger-related costs as the company looks to wrap its
tie-up with Virgin America Inc.
Alaska Air late September said it agreed with the Justice
Department to hold off on consummating its planned marriage with
Virgin America, giving regulators more time to review the deal.
Alaska in April announced a $2.6 billion offer to acquire San
Francisco-based Virgin America. On Thursday, Chief Executive Brad
Tilden said the company was "fully focused on completing our merger
with Virgin America."
The company booked $22 million in merger-related costs in the
third quarter. Excluding those costs and other items, earnings
topped Wall Street's expectations.
In the September quarter, Alaska Air's unit revenue—the amount
it takes in per seat flown a mile—fell 5.8% compared with the
prior-year quarter. The metric is closely watched as a sign of
demand and how well an airline is generating sales. Unit revenues
have been declining across the industry because of relatively rapid
expansions. Alaska Air's capacity rose 8.1% year-over-year.
Over all, Alaska Air earned $256 million, or $2.07 a share, down
from $274 million, $2.14, a year ago. Excluding items, such as
merger-related costs and mark-to-market fuel hedge adjustments, the
company earned $2.20 a share. Analysts expected $2.09 on an
adjusted basis, according to Thomson Reuters.
Revenue rose 3% to $1.57 billion, while analysts expected $1.56
billion.
Aircraft fuel expenses, including hedging gains and losses,
declined 8% in the period from a year ago.
Shares were inactive in premarket trading.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
October 20, 2016 07:25 ET (11:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Alaska Air (NYSE:ALK)
Historical Stock Chart
From Mar 2024 to Apr 2024
Alaska Air (NYSE:ALK)
Historical Stock Chart
From Apr 2023 to Apr 2024