Alaska Air Group, Inc. (NYSE: ALK) stock rose over 2.2% on 29th January, 2020 (As of 12:58 pm GMT-5; Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 19. In the fourth quarter, first class revenue grew up 19% on 13.6% more seats, premium class revenues rose up 16% on 14.5% more seats, and this momentum is expected to continue into 2020 as the company complete the remainder of the retrofits and focus on more effective merchandising of the premium cabin. RASM from the premium products rose up by 54% than generated by the main cabin and a 6 point improvement from the fourth quarter of 2018. The company has reported the adjusted net income, excluding merger-related costs and mark-to-market fuel hedging adjustments for the fourth quarter and full year 2019 of $181 million and $798 million compared to fourth quarter 2018 adjusted net income of $93 million and full year 2018 adjusted net income of $554 million.
Moreover, the company has generated approximately $1.7 billion of operating cash flow, and used approximately $696 million for capital expenditures, which resulted in approximately $1 billion of free cash flow in 2019, representing free cash flow conversion of 133%. ALK has held $1.5 billion in unrestricted cash and marketable securities as of Dec. 31, 2019. The company has achieved the goal of 75% repayment on the $2 billion debt borrowed to fund the acquisition of Virgin America, which led the debt-to-capitalization ratio to 41% as of Dec. 31, 2019, from 47% as of Dec. 31, 2018 and 51% as of Dec. 31, 2016.
ALK in the fourth quarter of FY 19 has reported the adjusted earnings per share of $1.46, beating the analysts’ estimates for the adjusted earnings per share of $1.41, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 7.9 percent to $2.23 billion in the fourth quarter of FY 19, beating the analysts’ estimates for revenue by 0.34%. This translates to unit revenue growth of 4.2%.
Additionally, the company has paid a $0.35 per share quarterly cash dividend in the fourth quarter, which brought the total dividends paid in 2019 to $173 million. The company has also announced today a 7% increase in the quarterly dividend, from $0.35 per share to $0.375 per share. This dividend will be paid on March 5, 2020, to all shareholders of record as of Feb. 18, 2020. The company had repurchased a total of 1,192,820 shares of common stock for approximately $75 million in 2019.