In 2014, Alaska paid $51 million in dividends and repurchased 5.3 million shares for $242 million, representing ~3.2% of its market capitalization.
Alaska had 22 737-900ERs at the end of 3Q14 and according to the airline’s management, these aircraft helped increased capacity by 15% without adding frequency.
As of December 2013, Alaska had 182 aircraft and the sixth largest market share by capacity among US airlines.
Alaska has reduced its leverage significantly over the past few years, and its debt-to-capital decreased to 30% in FY13 from 68% in FY09.
In 3Q14, Alaska’s cash and marketable securities as a percentage of sales was 25.5%, the highest among its peers.
Alaska Airlines reported adjusted EPS of $1.47, a 33% increase compared to 2013. Alaska has exceeded analyst estimates for five consecutive quarters.
Despite having the highest fuel cost per gallon compared to its peers, Alaska’s profitability was supported by lower taxes and non-operating costs during the quarter.
Alaska Airlines estimates its unit cost excluding fuel to decrease by 2.5% year-over-year in 4Q14 and by 1% in FY14.
During 3Q14, Alaska’s fuel efficiency improved. Measured as available seat miles (or ASM) per fuel gallon, fuel efficiency increased 2.8% year-over-year to 77.3 in 3Q14.
Alaska Airlines recouped ~85% of lost revenue during 3Q14 from its own distribution channels and by generating higher codeshare and interline revenue from other airlines.
Alaska added a new booking class with lower fares to its first class pricing structure, which was introduced in half of Alaska’s markets.
Cloud Peak Energy (CLD) is currently a safe bet. A spike in international thermal coal prices would be a huge positive for the company.
Cloud Peak’s 3Q14 earnings per share came in at $1.49. The higher-than-expected EPS was primarily due to one-time non-cash gains.
After deducting the capital expenditure from cash from operations, Cloud Peak Energy’s free cash flows came in at negative 0.8 million.
Cloud Peak Energy (CLD) reported EBITDA of $45.7 million in 3Q14, compared to $70.9 million in 3Q13.
In terms of cost performance, Cloud Peak Energy’s (CLD) cost per ton was slightly higher at $10.09 in 3Q14 compared to $9.78 in 3Q13.
Cloud Peak’s coal revenues came in at $282.6 million in 3Q14 compared to $301.6 million in 3Q13, primarily due to lower shipments.
Alaska Airlines’ passenger revenue increased by 6.9% during 3Q14, primarily due to an increase in traffic or revenue passenger miles (or RPM).
Rail issues are far from over. Coal producers have said that these issues will continue and may not get resolved completely before mid-2015.
While current international coal prices are low, Cloud Peak Energy feels that the timing of the deal with Westmoreland Coal Company is right.