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Investing.com - Alaska Air has warned that third-quarter adjusted earnings per share will be at the low end of its previously guided forecast range of $1.00 to $1.40, flagging the impact of high fuel costs and summertime "operational challenges."
In a securities filing on Monday, the company said that West Coast refining margins have "remained high" because of ongoing refinery disruptions. As a result, it now anticipates that the economic fuel price will be between $2.50 to $2.55 per gallon, compared with a previous estimate of roughly $2.45.
"Irregular operations -- including weather and air traffic control issues -- led to increased costs from overtime, premium pay and passenger compensation," the airline said.
Additionally, an IT outage in July, which affected hundreds of flights and stranded thousands of passengers during the middle of the busy summer travel period, is projected to dent per-share income by around $0.10, with the firm saying that this impact is now more heavily weighted "toward cost than revenue as originally contemplated."
Still, Alaska Air said sales trends are strong, with unit revenue -- a closely-monitored metric of pricing power -- tracking "near the high end" of their guidance of flat to low-single-digit growth. Solid demand for premium cabin seating and a double-digit rebound incorporate revenue since the fiscal second quarter have also helped yields turn positive year-over-year in August.
Shares of Alaska Air were pointing lower by 0.9% in premarket U.S. trading.