Alaska Airlines Raises Q3 Guidance as Turnaround Stays on Track
Last quarter, Alaska Air's (NYSE: ALK) adjusted net income soared 31% year over year as the Alaska Airlines parent beat its unit revenue guidance and did a good job of controlling its costs. This strong performance demonstrated that the company's plan to use a variety of revenue growth initiatives to boost its profit margin is succeeding.
Last week, Alaska Airlines tweaked its forecast for the third quarter, indicating that profitability is tracking ahead of expectations again. This is a great sign that the company's momentum is intact. With Alaska Air stock still trading for less than 11 times its projected 2019 earnings -- a bargain valuation -- there's plenty of upside for investors if the company continues performing at a high level.
In late July, Alaska Air estimated that revenue per available seat mile (RASM) would increase 2% to 5% in the third quarter. That's identical to the guidance it provided at the beginning of the second quarter, but it would represent a slight deceleration from the 5.2% RASM gain the company ultimately reported last quarter.
Source Fool.com
