Alaska Air Group Inc. posted a net loss of $17.4 million in its third quarter after it wrote off charges related to buying five planes and early retirement severance packages. The loss also included $291 million in fuel costs, which was the company's largest expense. A year earlier, Alaska Air posted a quarterly profit of $90.2 million, or $2.71 per share.
Excluding special items, the Seattle-based company said Tuesday that it earned $77.9 million, or $1.93 per share in the quarter ended Sept. 30, compared with $71.5 million, or $2.16 per share, in the same period of 2005. The earnings per share number decreased because of the issuance of new shares in the past year.
Operating revenue grew 11 percent to $936 million.
Earnings fell below analyst projections because of decreased demand related to tighter airport security rules imposed in August and September, Chief Executive Bill Ayer said in a conference call.
Alaska Air, which owns Alaska Airlines and Horizon Air, is in the middle of a strategic plan that includes reducing costs, buying new planes with better fuel economy and expanding service in existing markets.
In general, the airline industry is doing better in 2006 than the year before, thanks to increases in passenger traffic, said Peter Jacobs, director of research at Ragen MacKenzie, a division of Wells Fargo.
"The main thing that stood out to me was Alaska's ability to continue to post solid operating results even in the face of higher fuel prices," Jacobs said. "Clearly the company still has a lot of work to do in terms of driving non-fuel costs lower."
Shares fell 7 percent Tuesday to $41.36, reducing market value to $1.65 billion.
In other earnings news Tuesday, Bellevue-based Paccar Inc. reported record revenue and profit for its third quarter ended Sept. 30. Net income jumped 32 percent to $404 million, or $1.61 per share, compared with $305 million, or $1.18 per share, in the same period of 2005. Revenue from truck sales grew 18 percent to $3.96 billion and total revenue grew 19 percent to $4.21 billion. The company designs and manufactures trucks under the Kenworth, Peterbilt and DAF brands.
Bothell-based Seattle Genetics Inc. posted a third-quarter net loss of $8.65 million, or 17 cents per share, compared with a $6.17 million loss, or 15 cents per share, in the same period a year ago. Revenue declined 8 percent to $2.44 million. The biotechnology firm generates revenue from fees, milestones and reimbursements.
Olympia's Heritage Financial Corp. reported net income of $2.9 million, or 43 cents per share, for its quarter ended Sept. 30, up 6 percent from the year-ago period. Total assets increased year-over-year by $104.5 million, or 14 percent, to $835 million. The company operates Heritage Bank and Central Valley Bank.
P-I reporters Andrea James and Dan Richman contributed to this report.
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