Alaska Air cuts Q4 adjusted EPS view to 10c from ‘at least’ 40c, consensus 28c

In a regulatory filing, the company stated, “Alaska Air (ALK) Group now expects about $0.10 in adjusted earnings per share for Q4 2025 compared to the original guide of at least $0.40 per share. Several transitory headwinds totaling approximately $0.55-0.60 per share impacted the quarter, including: an internal IT and cloud service provider outage ($0.25), lost revenue due to the government shutdown ($0.15), higher fuel costs ($0.15) and a higher book tax rate for the quarter. Following our late October IT outage, we engaged a third-party consultant to conduct a comprehensive audit of our IT infrastructure and processes and are actively implementing best-practice recommendations to strengthen our data center resiliency. The government shutdown that began in October drove FAA-mandated flight reductions, resulting in 600 cancellations across Air Group, impacting approximately 40,000 guests. While operations normalized quickly after the government reopening, the disruption and lost revenue are expected to reduce EPS by approximately $0.15 for the quarter. Revenue, which had shown the strongest year-over-year performance trends of 2025 prior to the shutdown, turned sharply negative during the period and, although now positive again year-over-year, has not fully recovered to pre-shutdown trends. Despite a volatile year, Air Group has delivered meaningful progress on integration, with disciplined execution keeping us firmly on track with key milestones, synergy capture, and commercial initiatives. Absent transitory impacts, we are exiting the year with unit costs aligned to our original exit-rate expectations and making tangible progress in narrowing the unit revenue gap versus larger network peers. These achievements position us on a strong foundation heading into next year, enabling us to advance strategic priorities and deliver sustained long-term value.”