07:17 AM EDT, 07/18/2024 (MT Newswires) -- Alaska Air ( ALK ) shares fell early Thursday after the airline narrowed its full-year earnings outlook due to a new tentative labor deal with flight attendants, while the company gave a downbeat bottom-line outlook for the third quarter.

The company now expects earnings to be in the range of $3.50 to $4.50 a share for 2024, it said in a late Wednesday filing with the Securities and Exchange Commission. In April, the air carrier said it expected EPS for the year to be in the range of $3.25 to $5.25. Analysts surveyed by Capital IQ are expecting GAAP and normalized EPS of $4.40 and $4.35, respectively. The stock was down 1.3% in premarket activity.

Capacity is pegged to rise year on year by less than 2.5% versus the previous projection for an increase of less than 3%, due to lower-than-expected aircraft deliveries from Boeing ( BA ) , the company said in a second-quarter earnings presentation.

"Our FY guide reflects the economics of a newly signed tentative agreement with our flight attendants and moderating domestic revenue environment," Alaska Air ( ALK ) said in the filing. Earlier in July, the airline agreed to increase the average pay of its attendants by 32% under a three-year deal with the Association of Flight Attendants.

Alaska Air ( ALK ) anticipates per-share earnings to come in between $1.40 and $1.60 for the ongoing quarter, compared with the Street's current view for GAAP and normalized EPS of $2.19 and $2.06. Chief Financial Officer Shane Tackett told Reuters that the labor deal is expected to impact the September-quarter profit by $0.50 a share. Voting on the tentative agreement is expected to conclude in the middle of August.

Revenue per available seat mile, or unit revenue, which is commonly used to compare the efficiency of various airlines, is expected to be flat to positive in the third quarter on a yearly basis, the filing showed. Capacity is set to gain by 2% to 3% in the period.

For the three-month period ended June, adjusted EPS declined to $2.55 from $3 the year before, but topped the Street's view for $2.38. Operating revenue ticked up 2% to almost $2.9 billion, but fell short of analysts' $2.94 billion estimate.

Passenger revenue inclined 2% year over year to $2.65 billion, while mileage plan and cargo revenue grew 2% and 3%, respectively. Capacity advanced 6% while unit revenue decreased 4%. Total operating expenses edged up to $2.58 billion from $2.5 billion.

Price: 39.04, Change: -0.99, Percent Change: -2.47