Alaska Air Stock Falls After Weak Q2 Forecast, Retail Gets Bullish On Potentially Discounted Valuation

Alaska Air Group’s (ALK) stock fell 6.3% in extended trading on Wednesday after the company forecast second-quarter earnings below Wall Street’s estimates.

On an adjusted basis, the company forecast earnings between $1.15 and $1.65 per share for the second quarter. At the same time, analysts expect it to post $2.47 per share in earnings, CNBC reported, citing LSEG data.

For the first quarter, the company reported an adjusted loss of 77 cents per share, which was slightly higher than Wall Street’s expectations.

Alaska Air, which acquired West Coast competitor Hawaiian Airlines in 2024, forecast a 6% revenue impact during the second quarter due to tepid demand.

Airlines in the U.S. are grappling with declining prices and a slowdown in demand as Trump Tariffs have heightened risks of inflation.

The company said it would not update its 2025 forecast due to recent economic uncertainty and volatility. However, the company said it would be “solidly profitable” even if revenue is pressured.

Its rivals, Delta Air Lines (DAL) and Frontier Group (ULCC), have scrapped their forecast due to economic uncertainty.

"Consistent with our peers in the industry, we have seen lower fare levels being booked into April and throughout the summer," Alaska Chief Financial Officer Shane Tackett told Reuters.

The company’s Air Group capacity grew 3.9% during the first quarter, about 1% higher than prior estimates due to lower-than-expected flight cancellation rates. Its unit revenue rose 5% despite the softness in demand.

Retail sentiment on Stocktwits jumped to ‘extremely bullish’ (98/100) territory from ‘bullish’(70/100) a day ago, while retail chatter rose to ‘extremely high.’

Some retail traders expected to buy more of the company’s shares if the stock hit $40.

Alaska Air shares have fallen 28.9% year to date (YTD).

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