Alaska Air Group, Inc. (ALK) has reported a 40.31 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $114 million, or $0.92 a share in the quarter, compared with $191 million, or $1.51 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $193 million, or $1.56 a share compared with $186 million or $1.46 a share, a year ago.
Revenue during the quarter grew 10.68 percent to $1,524 million from $1,377 million in the previous year period. Gross margin for the quarter contracted 14 basis points over the previous year period to 65.22 percent. Total expenses were 84.19 percent of quarterly revenues, up from 81.48 percent for the same period last year. That has resulted in a contraction of 270 basis points in operating margin to 15.81 percent.
Operating income for the quarter was $241 million, compared with $255 million in the previous year period.
"2016 was an incredible year for Alaska in almost every way, and we are even more excited as we look forward to 2017 and beyond," said Alaska chief executive officer Brad Tilden. "Our people are rallying around a common purpose of creating an airline people love, and we are well on our way, with benefits like reciprocal mileage and easy booking of Virgin America flights on alaskaair.com already available. I want to thank our people for providing our guests great service, and for staying focused on running a safe and reliable operation."
Working capital remains negative
Working capital of Alaska Air Group, Inc. was negative $487 million on Dec. 31, 2016 compared with negative $143 million on Dec. 31, 2015. Current ratio was at 0.81 as on Dec. 31, 2016, down from 0.92 on Dec. 31, 2015.
Debt increases substantially
Alaska Air Group, Inc. has witnessed an increase in total debt over the last one year. It stood at $2,955 million as on Dec. 31, 2016, up 332.65 percent or $2,272 million from $683 million on Dec. 31, 2015. Total debt was 29.62 percent of total assets as on Dec. 31, 2016, compared with 10.45 percent on Dec. 31, 2015. Debt to equity ratio was at 1.01 as on Dec. 31, 2016, up from 0.28 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 10.95 for the quarter from 25.50 for the same period last year.
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