American Airlines Group Inc (AAL)

[KingDMC]

American Airlines' Profit Soars, Propelled by Lower Fuel Prices

Source: Dow Jones News
American Airlines Group Inc., continuing a trend of soaring earnings across the airline industry, posted higher profit for its latest quarter, propelled by lower fuel prices and a big tax benefit.

Shares rose 2% in premarket trading to $38.90 as profit topped Wall Street estimates.

During the quarter ended Dec. 31, the airline saw its fuel cost plunge 41%. At the same time, American's unit revenue—the amount it takes in per seat flown a mile—declined 5.8% in the quarter compared with a year ago, and overall revenue declined. American and other airlines have faced questions over sagging revenue despite high earnings.

Overall, the company posted a profit of $3.28 billion, or $5.09 a share, up from $597 million, or 82 cents a share, a year prior. While the profit is a quarterly record for the company, the bottom line was boosted by a $3 billion special tax valuation allowance credit.

Adjusted earnings on a per-share basis were $2, up from $1.52. Revenue slipped 5.2% to $9.63 billion. Analysts surveyed by Thomson Reuters forecast per-share earnings at $1.97 a share on revenue of $9.63 billion.

Salary and benefit costs rose 14%. American recently reached a new labor contract with its customer-service and reservations agents and it recently entered negotiations with mechanics and baggage handlers.

Even excluding the big tax credit in its latest quarter, American noted that its profit for full-year 2015 came in at a record.

Write to Austen Hufford at [e-mail]


(END) Dow Jones Newswires

January 29, 2016 09:05 ET (14:05 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.