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Alaska Air Group Q3 GAAP net income $198 million

Staff writer |
Alaska Air Group reported third quarter 2014 GAAP net income of $198 million, or $1.45 per diluted share, compared to $289 million, or $2.04 per diluted share in Q3 2013.

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Excluding the impact of mark-to-market fuel hedge adjustments and a one-time special revenue item in the prior year, the company reported record adjusted net income of $200 million, or $1.47 per diluted share, compared to adjusted net income of $157 million, or $1.11 per diluted share, in 2013.

"This was our best quarterly result ever" said CEO Brad Tilden. "I want to thank our 13,000 employees who are keeping a focus on playing our game, and working hard every day to run a great operation, keep fares low, and deliver award winning service to our customers. All of us at Alaska would like to thank our customers for their continued loyalty."

The company:
Reported record third quarter net income, excluding special items, of $200 million, a 27% increase over the third quarter of 2013.

Reported adjusted earnings per share of $1.47 per diluted share, a 32% increase over the third quarter of 2013 and ahead of First Call analyst consensus estimate of $1.42 per share.

Earned net income for the third quarter under Generally Accepted Accounting Principles (GAAP) of $198 million or $1.45 per diluted share, compared to net income of $289 million, or $2.04 per diluted share in 2013.

Recorded $84 million of incentive pay through the first nine months of 2014. This includes each Air Group employee earning at least $800 by meeting or exceeding monthly customer satisfaction and operational performance goals and tracking to earn above-target payouts for full-year goals.

Increased fuel efficiency (as measured by seat-miles per gallon) by 2.8% as part of our effort to be the airline leader in environmental stewardship.

Grew passenger revenues by 7%, compared to the third quarter of 2013.

Generated record adjusted pretax margin in the third quarter of 21.8% compared to 18.4% in 2013.

Generated 15.9% pretax margin for the trailing 12-month period ended Sept. 30, 2014, compared to 11.7% for the same period in the prior year.

Achieved trailing 12-month after-tax return on invested capital of 17.2% compared to 13.0% in the 12-month period ended Sept. 30, 2013.

Repurchased 3.4 million shares of common stock for $159 million in the third quarter of 2014, and 5.3 million shares for $242 million in the first nine months of 2014, representing 3.8% of the total shares outstanding at the beginning of the year.

Paid a $0.125 per-share quarterly cash dividend on September 4, bringing total dividend payments so far this year to $51 million.

Generated $1 billion in operating cash flows for the 12-months ended Sept. 30, 2014, generating $321 million of free cash flows.

Lowered adjusted debt-to-total-capitalization ratio to 31%.

Held $1.3 billion in unrestricted cash and marketable securities as of Sept. 30, 2014.

Became one of only two U.S. airlines with investment grade credit ratings.


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