Alaska Air Warns Boeing Fleet Grounding Incident To Hit 2024 Earnings By $150M
Portfolio Pulse from Vandana Singh
Alaska Air Group Inc (ALK) reported Q4 operating revenue of $2.55 billion, a 3% Y/Y increase, and adjusted EPS of $0.30, beating estimates. The company is inspecting its Boeing 737 MAX 9 fleet and expects a $150 million earnings hit in 2024 due to the grounding incident. Alaska Air's 2024 earnings guidance of $3-$5 per share is below the consensus of $4.85, factoring in the impact of the Boeing fleet grounding. ALK shares rose 3.21% to $36.97.
January 25, 2024 | 3:38 pm
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NEUTRAL IMPACT
Alaska Air reported solid Q4 earnings but expects a $150 million negative impact on 2024 earnings due to the Boeing 737 MAX 9 fleet grounding. Shares are currently up.
While ALK's Q4 earnings were positive, the projected $150 million impact from the Boeing fleet grounding could dampen investor sentiment. However, the current share price increase indicates a short-term positive reaction, likely due to the earnings beat.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
Boeing's 737 MAX 9 fleet grounding has led to a thorough review by Alaska Air and a $150 million impact on Alaska's 2024 earnings, potentially affecting Boeing's reputation and future delivery schedules.
Boeing is indirectly affected by the grounding of its 737 MAX 9 fleet, as it may lead to increased regulatory scrutiny and concerns over production quality, which could negatively impact investor confidence and future sales.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80