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Is Alaska Air Group (ALK) Poised to Beat Earnings in Q3?

Alaska Air Group, Inc.ALK , the parent company of Alaska Airlines, is scheduled to report third-quarter 2015 financial numbers before the opening bell on Oct 22.

Why a Likely Positive Surprise?

Our proven model shows that Alaska Air Group is likely to beat earnings because it has the right combination of two key ingredients.

Zacks ESP:Earnings ESP for the company stand at +1.93% as the Most Accurate estimate is $2.11 while the Zacks Consensus Estimate is pegged lower at $2.07. This serves as a meaningful and leading indicator of a likely positive earnings surprise.

Zacks Rank: Alaska Air Group currently has a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a significantly higher chance of beating earnings. Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.

The combination of Alaska Air Group's Zacks Rank #2 and +1.93% ESP makes us reasonably confident of an earnings beat.

What is Driving the Better-Than-Expected Earnings?

Continuous network expansion and launch of new seasonal flights will drive unit revenues for Alaska Air Group. Last month, the carrier flagged off non-stop flights between Nashville and Seattle, thereby expanding its non-stop service to 84 destinations from Seattle alone. Moreover, declining fuel prices coupled with an improving cost structure will boost the carrier's profits going ahead.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:

American Airlines Group Inc. AAL with an earnings ESP of +1.48% and a Zacks Rank #2.

Allegiant Travel Company ALGT with an earnings ESP of +2.31% and a Zacks Rank #2

Hawaiian Holdings Inc. HA with an earnings ESP of +5.88% and a Zacks Rank #2.

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HAWAIIAN HLDGS (HA): Free Stock Analysis Report

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AMER AIRLINES (AAL): Free Stock Analysis Report

ALASKA AIR GRP (ALK): Get Free Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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