Benzinga | Jan 25, 2021 10:22AM EST

Preview: Alaska Air Group's Earnings

Alaska Air Group (NYSE:ALK) announces its next round of earnings this Tuesday, January 26. Here is Benzinga's everything-that-matters guide for this Tuesday's Q4 earnings announcement.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Analysts are expecting Alaska Air Group to report a loss of $2.87 per share. Revenue will likely be around $824.77 million, according to the consensus estimate. In the same quarter last year, Alaska Air Group announced EPS of $1.46 on revenue of $2.23 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

The Wall Street estimate would represent a 296.58% decline in the company's earnings. Revenue would be down 62.98% on a year-over-year basis. Here is how the Alaska Air Group's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate -3.01 -3.72 -1.13 1.41EPS Actual -3.23 -3.54 -0.82 1.46Revenue Estimate 678.20 M 312.38 M 1.70 B 2.21 BRevenue Actual 701.00 M 421.00 M 1.64 B 2.23 B

Stock Performance

Over the past 52-week period, shares of Alaska Air Group have declined 18.54%. Given that these returns are generally negative, long-term shareholders are probably a little upset going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Alaska Air Group is scheduled to hold the call at 11:30:00 ET and can be accessed here.