Alaska Air Group Inc. (ALK) announced on Monday that it now expects third-quarter adjusted earnings to be at the low end of its previously guided range of $1 to $1.40 per share. This is mainly due to elevated fuel costs and operational challenges during the summer, which have pressured unit costs.
On average, 14 analysts forecast the airline to post earnings of $1.35 per share for the third quarter. Analysts' estimates typically exclude special items.
The airline added that the ongoing refinery disruptions have pushed its expected economic fuel price to a range of $2.50 to $2.55 per gallon from the company's prior expectation of ~$2.45 per gallon.
In addition, the Group, said: "Irregular operations, including weather and air traffic control issues, led to increased costs from overtime, premium pay, and passenger compensation. Additionally, the July IT outage continues to carry an expected ~$0.10 EPS impact, now weighted more heavily toward cost than revenue as originally contemplated."
For the third quarter of fiscal 2024, Alaska Air had posted adjusted income of $2.25 per share.
Despite these hurdles, at present, the airline noted that its revenue trends remain strong. Unit revenue is tracking near the high end of its prior guidance range of flat to low-single-digit growth.
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