Adjusted earnings per share were $1.93, down 4% from last year, including $0.03 accretion from the M&C TechGroup acquisition.
Americas segment sales increased 2% reported and organic, with adjusted operating margin at 29.1%, down 220 basis points due to inflation, FX, and tariffs.
Free cash flow was $38 million for the quarter, representing 60% of earnings, with operating cash flow up over 25% year-over-year.
GAAP operating margin was 18.1%, with adjusted operating margin at 21.4%, down 200 basis points from the prior year.
Gross margins declined 170 basis points to 46.6%, pressured by transactional foreign currency headwinds, inflation, lower organic volume, and early tariff impacts.
International segment sales increased 4% reported (including M&C and FX tailwinds) but declined 4% organically, with adjusted operating margin at 13.1%, down 330 basis points.
Net debt increased to $532 million primarily due to the M&C acquisition, with net leverage at 1.1x, maintaining a strong balance sheet.
Second quarter sales were $474 million, a 3% increase on a reported basis and flat organic growth year-over-year.
Adjusted earnings per share of $1.78 exceeded the high end of guidance, with a pretax margin in the top 3 of the industry.
Alaska Air Group reported a second quarter GAAP net income of $172 million and adjusted net income of $215 million, excluding special items and fuel hedge adjustments.
Fuel price averaged $2.39 per gallon in Q2, trending down through June, with an expected $2.45 average in Q3.
Liquidity ended the quarter at $3 billion, net leverage at 2.4x, and debt to capital at 60%.
Second quarter unit costs were up 6.5% year-over-year, driven by airport real estate cost growth, maintenance, and new labor contracts.
The company generated a record $3.7 billion in revenue, with year-over-year unit revenue performance expected to lead the industry.
The company repurchased $428 million in shares in Q2, totaling $535 million year-to-date.
Dafinchi