Airline Flies Above The Competition On Strength Of New Markets and Discounters Dollar Tree, TJX Top Views As Shoppers Continue To Spend Carefully

Alaska Air Group (ALK) took off like a rocket last year as the economic downturn sent many airlines into a tailspin.

The parent of Alaska Airlines and Horizon Air saw 2009 profits soar 1,942% to $2.45 a share from the previous year’s 12 cents a share, it reported on Jan. 28.

Alaska Air Group looks forward to growth in 2010 because it managed its fuel costs well and found new, more profitable markets in which to operate.

“It was a great year for them compared to the prior year where they broke even and barely made any money,” said analyst Mike Roarke of McAdams Wright Ragen. “They performed much better than almost all domestic airlines in 2009.”

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“Our profitability was driven by significant reductions in fuel costs and an aggressive reallocation of flying to new markets in our system,” said Chief Financial Officer Glenn Johnson.

Economic fuel costs, or what it pays for fuel after it hedges, slid 38% in 2009 from the prior year. [Read the full article]

Dollar Tree (DLTR) shares surged 12% and TJX (TJX) 3%, both to new highs. Limited Brands (LTD) rose early and late; Chico’s (CHS) fell 3 cents. The S&P Retail Index rose 2% to its best close since September 2008.

Value-oriented chains ruled in the recession as cautious shoppers of all income levels have tried to stretch theirs wherever they can. Off-price retailer TJX and Dollar Tree, which sells every item for $1 or less, remain top performers.

“Dollar Tree and TJX are in a sweet spot,” said Ken Perkins, president of Retail Metrics. “As we continue to unwind from the worst recession we’ve seen since the Great Depression, consumers are flocking to discount-oriented and off-price retailers looking to stretch every dollar and seeking out value.”

Dollar Tree earned $1.52 a share in Q4, up 32% vs. a year ago and 8 cents ahead of Wall Street’s forecast. Sales climbed 12% to $1.56 billion, slightly above forecasts.

Same-store sales grew 6.6% vs. [Read the full article]

In particular, the Long Island City, N.Y., equipment maker has high hopes for its Cerec system, which lets a dentist design and make a crown in the office. The 3-D computer-assisted design/computer assisted manufacturing (CAD/CAM) tool can save hundreds of dollars per procedure.

“Dentists are entrepreneurs, and they figure out how to win,” said John Sweeney, the company’s vice president for investor relations.

Once the economy starts to gain momentum, Sirona should benefit as patients who put off dental procedures during tight times start scheduling appointments, says Derek Leckow, an analyst at Barrington Research.

And the longer someone has put off a procedure, the worse a tooth is likely to have gotten, meaning patients will need more complex and pricier restorations, Leckow says. In fact, he thinks demand for procedures has already started boosting demand for new dental equipment. [Read the full article]

General Growth signed nondisclosure agreements with Simon Property Group (SPG), the largest U.S. mall owner, and Australia’s Westfield Group, which would give them access to information about its business, according to sources familiar with the matter.

The developments come just before a March 3 court hearing, and set the stage for a possible bidding war.

Simon has offered to buy General Growth in a deal it valued at about $10 billion and also is in talks with Blackstone Group (BX) about co-investing in a deal. General Growth’s Brookfield plan tops Simon’s current offer, giving equity holders around $4.75 billion vs. some $2.86 billion under the rival offer.

General Growth said under its plan Brookfield would invest $2.625 billion in return for a 30% stake in the mall owner and the right to nominate three directors. [Read the full article]

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