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AA 2Q Loss Predicted  
User currently offlineDc10s4ever From , joined Dec 1969, posts, RR:
Posted (7 years 9 months 3 weeks 4 days 11 hours ago) and read 1791 times:

I was just watching the local news, as the 2Q is comming to a close, AA is predicted to post close to a 350m loss. Based on the fact oil as been close to mid 70's for most of the 2Q.

8 replies: All unread, jump to last
 
User currently offlineCommavia From United States of America, joined Apr 2005, 11120 posts, RR: 62
Reply 1, posted (7 years 9 months 3 weeks 4 days 11 hours ago) and read 1783 times:

That's a bit strange, since according to Yahoo! Finance, the concensus analyst estimate of American's earnings this year is about 95 cents per share, or roughly $180M, with estimates ranging from the low end (a $51M profit) to the high end ($237M profit). In addition, Morgan Stanley just recently reitterated that it expects American to be profitable for full-year 2006, which would be fairly difficult without being profitable in the busiest, highest-revenue quarter, the second quarter.

User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 2, posted (7 years 9 months 3 weeks 4 days 10 hours ago) and read 1697 times:

AA is undoubtedly planning on taking charges of some kind in order to accomplish this. Not sure what AA’s strategy is but they seem very interested in getting their labor costs down further. They may well be moving down the road of taking charge after charge in order to try and convince their unions that they need more cuts.

It should be obvious that no carrier stays at the top of the heap in the airline industry. If one carrier is succeeding, another carrier is certain to come along and copy it. If one carrier is doing poorly and extracting cuts, other carriers jump on the bandwagon in the hopes that one of them will use their new found cost advantage to get a leg up on the competition, only to see everybody else do the same thing.


User currently offlineIowaman From United States of America, joined May 2004, 4312 posts, RR: 6
Reply 3, posted (7 years 9 months 3 weeks 4 days 10 hours ago) and read 1644 times:
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Quoting Dc10s4ever (Thread starter):
AA 2Q Loss Predicted

Is this a surprise?



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User currently offlineDc10s4ever From , joined Dec 1969, posts, RR:
Reply 4, posted (7 years 9 months 3 weeks 4 days 10 hours ago) and read 1614 times:

Quoting WorldTraveler (Reply 2):
AA is undoubtedly planning on taking charges of some kind in order to accomplish this. Not sure what AA’s strategy is but they seem very interested in getting their labor costs down further. They may well be moving down the road of taking charge after charge in order to try and convince their unions that they need more cuts.

This is very true. Now that UA is out of CH11, and NW and DL are currently in and will soon emerge, AA will have THE HIGHEST COST in the industry. AA has no choice but to come back to the tables and ask labor for more pay cuts.


User currently offlineLMP737 From , joined Dec 1969, posts, RR:
Reply 5, posted (7 years 9 months 3 weeks 4 days 9 hours ago) and read 1576 times:

Quoting Commavia (Reply 1):
That's a bit strange, since according to Yahoo! Finance, the concensus analyst estimate of American's earnings this year is about 95 cents per share, or roughly $180M, with estimates ranging from the low end (a $51M profit) to the high end ($237M profit). In addition, Morgan Stanley just recently reitterated that it expects American to be profitable for full-year 2006, which would be fairly difficult without being profitable in the busiest, highest-revenue quarter, the second quarter.

Not just difficult but almost impossible.

< http://www.forbes.com/2006/06/26/amr...626markets09.html?partner=yahootix >


User currently offlineArtieFufkin From United States of America, joined May 2006, 704 posts, RR: 0
Reply 6, posted (7 years 9 months 3 weeks 4 days 9 hours ago) and read 1545 times:

Well it's pretty obvious this must have to do with charges. Since MS just said AMR's fuel cost estimates were too conservative and raised the profit estimates. And from past experience these consensus estimates are surprisingly accurate.

User currently offlineCch362 From United States of America, joined Apr 2001, 147 posts, RR: 0
Reply 7, posted (7 years 9 months 3 weeks 4 days 7 hours ago) and read 1441 times:

Quoting Commavia (Reply 1):
In addition, Morgan Stanley just recently reitterated that it expects American to be profitable for full-year 2006, which would be fairly difficult without being profitable in the busiest, highest-revenue quarter, the second quarter.

It's 3Q (Jul-Sep) that is the busiest and most profitable. Expect AMR to turn a profit then, which should (may) offset the losses and make the entire year profitable.


User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 60
Reply 8, posted (7 years 9 months 3 weeks 4 days 7 hours ago) and read 1441 times:

Quoting Dc10s4ever (Thread starter):
Based on the fact oil as been close to mid 70's for most of the 2Q.

IIRC, they have hedged some fuel (if not most) between $60-$65 barrel...if they have, then it won't make a difference in fuel costs if oil goes higher



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