It's good, but didn't exceed analysts' average EPS estimates though...but then again, they also took several charges against the earnings that skewed them far lower than where they would have been.
FOR IMMEDIATE RELEASE July 21, 2005
ALASKA AIR GROUP REPORTS SECOND QUARTER RESULTS
SEATTLE — Alaska Air Group, Inc. (NYSE:ALK) today reported second quarter net income of $17.4 million, or $0.56 per diluted share, compared to a net loss of $1.7 million, or $0.06 per diluted share, in the second quarter of 2004.
Second quarter results include a restructuring charge of $14.7 million ($9.2 million, net of tax, or $0.28 per diluted share) for employee severance and related costs resulting primarily from the subcontracting of the Seattle ramp service function in May 2005. Second quarter results also include $3 million ($1.9 million, net of tax, or $0.06 per diluted share) in mark-to-market hedging gains on fuel hedges that settle in future periods, compared to $22.3 million ($14.8 million, net of tax, or $0.55 per share) in 2004. Without these items, and excluding aircraft impairment charges of $37.2 million ($24.7 million, net of tax, or $0.92 per share) in the second quarter of 2004, net income would have been $24.7 million, or $0.74 per diluted share, for the second quarter of 2005, compared to net income of $8.2 million, or $0.31 per diluted share, in the second quarter of 2004.
“Although we are seeing gains in passenger loads and ticket prices, we are facing operational problems, which, if we don’t correct them, will impact the long-term reputation of Alaska Airlines,” said Bill Ayer, Alaska Air Group’s chairman and chief executive officer. “Our primary focus is on improving our on-time performance in order to deliver on customer promises and reduce the stress on our employees.”
Alaska Airlines’ passenger traffic in the second quarter increased 5.2 percent on a capacity decrease of 1.6 percent. Alaska’s load factor increased 5.1 percentage points to 77.9 percent compared to the same period in 2004. Alaska’s operating revenue per available seat mile (ASM) increased 8.4 percent, while its operating cost per ASM excluding fuel, restructuring and impairment charges increased 1.4 percent. Alaska’s pretax income for the quarter was $22.1 million, compared to a pretax loss of $2.8 million in the same period of 2004. Excluding the notable items referenced above, Alaska’s pretax income was $34.2 million for the quarter compared to $14.4 million in the second quarter of 2004.
Horizon Air’s passenger traffic in the second quarter increased 15.9 percent on a 7.2 percent capacity increase. Horizon’s load factor increased by 5.5 percentage points to 73 percent compared to the same period in 2004. Horizon’s operating revenue per ASM increased 5.2 percent, while its operating cost per ASM excluding fuel and impairment charges decreased 4.9 percent. Horizon’s pretax income for the quarter was $11.1 million, compared to $4.7 million in the second quarter of 2004. Excluding the notable items referenced above, Horizon’s pretax income was $10.7 million for the quarter compared to $2.4 million in the same period in 2004.
Alaska Air Group had cash and short-term investments at June 30, 2005, of approximately $726 million, compared to $874 million at Dec. 31, 2004.
[Edited 2005-07-21 18:06:43]
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
Comments made here are my own and are not intended to represent the official position of Alaska Air Group