Benefitting from an increase in passenger traffic, Alaska Air Group (NYSE: ALK) reported stronger than expected earnings for the second quarter. Revenues rose 6% and came in slightly above estimates.
Revenue passenger miles, a measure of passenger traffic, rose 1% from last year to 14.64 billion during the June quarter. At 16.98 billion, capacity, or available seat miles, was up 1% year-over-year.
Reflecting the traffic growth, total revenues advanced 6% to $2.29 billion and came in slightly above the consensus forecast. Total load factor edged up by 0.2 points to 86.2% during the period.
Second-quarter earnings, excluding one-off items, rose to $2.17 per share from $1.66 per share last year. Unadjusted profit was $262 million or $2.11 per share, compared to $193 million or $1.56 per share in the second quarter of 2018. Analysts were looking for a lower profit.
“The three-percentage point improvement in our adjusted pretax margin shows that our revenue initiatives and cost management efforts are paying off. We set an ambitious plan and are executing it. But what our people really do best is provide genuine, caring service for our guests, and that’s why they earned our 12th-straight J.D. Power award this year,” said Alaska CEO Brad Tilden.
During the quarter, the company paid a quarterly cash dividend of 0.35$ per share, representing a 9% increase compared to the same period of last year. In the year-to-date period, it repurchased 408,665 shares of common stock for about $25 million.
Earlier this month, the airline’s technicians, represented by the Aircraft Mechanics Fraternal Association, approved the integrated seniority list and a transition agreement, including a two-year contract extension.
Shares of Alaska Air closed Thursday’s regular session sharply lower. The stock has gained about 19% since mid-march when it slipped to the lowest level in more than four years. Currently, it is trading close to the levels seen a year earlier.