Alaska Air Group Inc. (ALK) Posts Record Revenue but Misses Profit Targets

Alaska Air Group Inc. (NYSE:ALK) is one of billionaire Daniel Sundheim’s stock picks with huge upside potential. On October 23, Alaska Air Group Inc. (NYSE:ALK) reported third-quarter revenue of $3.8 billion, a 23% increase year-over-year and slightly above expectations.

Despite the top-line strength, earnings fell short: GAAP net income came in at $0.62 per share, well below last year’s $1.84 and missing analyst estimates. Adjusted EPS was $1.05, also under forecasts. Operating cash flow reached $229 million, and the company held $2.3 billion in liquidity at quarter-end.

The airline repurchased 10.6 million shares for $540 million through September, signaling confidence in its long-term outlook. However, unit costs rose 8.6% due to IT recovery expenses and adverse weather. While revenue hit a new high, profitability faced headwinds that tempered investor enthusiasm.

Alaska Air Group Inc. (NYSE:ALK) is a holding company that operates major airlines, including Alaska Airlines, Hawaiian Airlines, and Horizon Air. Its primary business is providing passenger and cargo air transportation services, with an extensive network that connects the western U.S. and beyond to cities across North America, Central America, and other global destinations.

While we acknowledge the potential of ALK as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: Top 10 Materials Stocks to Buy According to Analysts and 10 Best Organic Food and Farming Stocks to Buy Now.

Disclosure: None. This article is originally published at Insider Monkey.