Alaska Air Q4 earnings beat estimates, revenues increase Y/Y

Alaska Air Group (ALK) reported fourth-quarter 2025 earnings (excluding 25 cents from non-recurring items) of 43 cents per share, which breezed past the Zacks Consensus Estimate of 11 cents but declined 55.7% year over year. High operating costs hurt the bottom line.

Operating revenues of $3.63 billion fell short of the Zacks Consensus Estimate of $3.65 billion. Total revenues jumped 2.8% year over year, with passenger revenues accounting for 89.4% of the top line and increasing 2% to $3.25 billion. However, it missed our estimate of $3.35 billion.

On a year-over-year basis, cargo and other revenues increased 11% to $146 million, ahead of our estimate of $138 million. Loyalty program other revenues grew 6% year over year to $238 million, well ahead of our estimate of $197 million.

Alaska Air Group price, consensus and EPS surprise

Alaska Air’s diversified revenue base contributed to the top-line year-over-year growth. Corporate travel increased 9%, and premium revenues grew 7%.

Other details of ALK’s Q4 earnings

All comparisons are presented on a year-over-year basis unless otherwise noted.

Revenue per available seat mile (RASM: a key measure of unit revenues) inched up 0.6% to 15.63 cents despite the prolonged government shutdown. Yield increased 2.9% to 17.15 cents.

Consolidated traffic (measured in revenue passenger miles) inched down 0.7% to 18.94 billion. Capacity (measured in available seat miles) rose 2.2% to 23.23 billion. Load factor (percentage of seats filled by passengers) fell to 81.5% from 83.8% in the prior-year period. In the fourth quarter, total operating expenses (on a reported basis) increased 3% to $3.56 billion.

Economic fuel price per gallon increased 1.2% to $2.57. Consolidated operating costs per available seat mile (excluding fuel and special items) inched up 1.3%.

Liquidity and share buybacks

As of Dec. 31, 2025, Alaska Air had $627 million of cash and cash equivalents compared with $778 million at the end of the prior quarter. ALK exited the fourth quarter of 2025 with long-term debt (net of current portion) of $4.83 billion compared with $4.49 billion at the end of the prior quarter.

During the final quarter of 2025, ALK repurchased 0.7 million shares for $30 million. During the entire 2025, the airline bought back 11.3 million shares for $570 million.

ALK’s outlook

ALK anticipates the first-quarter 2026 adjusted loss per share to be in the 50 cents-$1.50 band. The Zacks Consensus Estimate for loss is currently pegged at 34 cents per share. Capacity in the March quarter is projected to be up in the 1% to 2% range from the first-quarter 2025 actuals. Adjusted tax rate is estimated to be 29%.

For 2026, adjusted earnings per share are expected to be in the $3.5-$6.5 band. The Zacks Consensus Estimate is currently pegged at $4.77 per share, below the mid-point of the guided range. Capacity in the current year is projected to be up in the 2% to 3% range. Capital expenditure is expected in the $1.4 billion-$1.5 billion band. Adjusted tax rate for 2026 is estimated to be in the 26% to 27% range.

ALK’s Zacks rank

Currently, ALK carries a Zacks Rank #3 (Hold).

Q4 performances of other transportation companies

Delta Air Lines (DAL) reported fourth-quarter 2025 earnings (excluding 31 cents from non-recurring items) of $1.55 per share, which beat the Zacks Consensus Estimate of $1.53. Earnings decreased 16.22% on a year-over-year basis due to high labor costs.

Revenues in the December-end quarter were $16 billion, beating the Zacks Consensus Estimate of $15.63 billion and increasing 2.9% on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 1.2% year over year to $14.6 billion. Revenue growth was impacted by about 2 points due to the government shutdown, mainly in the domestic segment, consistent with the company's disclosure last month.

J.B. Hunt Transport Services (JBHT) reported fourth-quarter 2025 earnings of $1.90 per share, which surpassed the Zacks Consensus Estimate of $1.81 and improved 24.2% year over year.

Total operating revenues of $3.09 billion fell short of the Zacks Consensus Estimate of $3.12 billion and decreased 1.6% year over year. JBHT’s fourth-quarter revenue performance was hurt by a 2% and 4% decline in revenue per load excluding fuel surcharge revenues in Intermodal (“JBI”) and Truckload (“JBT”), respectively.