Alaska Air sees Q3 adjusted EPS at low end of $1.00-$1.40, consensus $1.35

In a regulatory filing, the company stated, “Alaska Air (ALK) Group’s third quarter adjusted earnings per share is expected to be at the low end of our previously guided range of $1.00 to $1.40, driven primarily by elevated fuel costs and operational challenges during the summer which have pressured unit costs. West Coast refining margins have remained high due to ongoing refinery disruptions, pushing our expected economic fuel price to $2.50-$2.55 per gallon, up from our prior expectation of ~$2.45. Irregular operations – including weather and air traffic control issues – led to increased costs from overtime, premium pay and passenger compensation. Additionally, the July IT outage continues to carry an expected ~$0.10 EPS impact, now weighted more heavily toward cost than revenue as originally contemplated. Despite these pressures, revenue trends remain strong. Unit revenue is tracking near the high end of our prior guidance range of flat to low-single-digit growth. Yields turned positive year-over-year in August, driven by premium cabin strength and a double-digit rebound in corporate revenue since Q2 2025. Further, the successful launch of our new Atmos Rewards loyalty program on August 20th generated record media impressions – the most for any announcement in the history of the company. Sign-ups for our new premium credit card, the Atmos Rewards Summit Visa Infinite Card, exceeded our year-end target within two weeks, with notable traction beyond our core West Coast and Hawai’i markets – underscoring the reach of our award-winning loyalty platform. Our Q3 2025 book tax rate is expected to be approximately 30% while cash taxes remain negligible, consistent with prior expectations.”