Proactive Investors - Alaska Air Group (NYSE:ALK) has forecast better-than-expected profits for the second quarter, sending shares of the airline more than 6% higher.
It expects to report earnings per share (EPS) in the range of $2.20 to $2.40 for the quarter ending in June, above Wall Street expectations of $2.17.
The Seattle-based airline also expects to increase its capacity by 5% to 7% from the year-ago quarter.
The airline’s results for the first quarter, which ended on March 31, 2024, were “significantly” impacted by the Flight 1282 mid-air cabin blowout in January and the subsequent more than two-week grounding of Boeing Co (NYSE:NYSE:BA, ETR:BCO)'s 737-9 MAX fleet.
It said it has received $162 million in initial cash compensation from Boeing to address financial damages incurred during the quarter as a result of the incident.
During Q1, Alaska Air narrowed its net loss from $142 million or $1.11 per share to $132 million or $1.05 per share. This was ahead of estimates of a loss per share of $1.09.
Revenue increased 2% year-over-year to $2.23 billion, ahead of estimates of $2.18 billion.
“I want to recognize Alaska's employees for their uncompromising prioritization of safety, for taking great care of our guests, and for delivering strong performance in the first quarter," Alaska Air CEO Ben Minicucci commented.
"Despite significant challenges to start the year our results have far exceeded initial expectations.”
Alaska Air shares were up 6.3% at US$45.42 late morning on Thursday.
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