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Will AA Report Strong Earnings?  
User currently offlineYazoo From United States of America, joined Aug 2001, 487 posts, RR: 0
Posted (3 years 11 months 3 days 12 hours ago) and read 2253 times:

On October 21 AMR is scheduled to report its quarterly earnings. Last quarter, AMR was the only Legacy that has reported losses. Now Analysts expect the company to post a loss of $1.34. But seeing how the Airline industry is recovering, do you think we are in for a big surprise?

[Edited 2010-10-19 10:39:56]


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6 replies: All unread, jump to last
 
User currently offlinedl767captain From United States of America, joined Mar 2007, 2539 posts, RR: 0
Reply 1, posted (3 years 11 months 3 days 12 hours ago) and read 2183 times:

Is a quarter log enough for them to actually post a profit? Maybe they'll post a smaller loss on their way to posting a profit but I'm not sure if they've had enough time to post a profit this quarter

User currently offlineLAXtoATL From United States of America, joined Oct 2009, 1594 posts, RR: 2
Reply 2, posted (3 years 11 months 3 days 12 hours ago) and read 2144 times:

Quoting Yazoo (Thread starter):
On October 21 AMR is scheduled to report its quarterly earnings. Last quarter, AMR was the only Legacy that has reported losses. Now Analysts expect the company to post a loss of $1.34. But seeing how the Airline industry is recovering, do you think we are in for a big surprise?

AA is expected to report a small profit this quarter. The projected loss is for the full year. The projections for this quarter for AA are a profit but on considerably smaller margins compared to their competitors. Considering that the analysts make their projections based primarily on information they get from the airline itself, I wouldn't expect any big surprises in terms of earnings. Any surprises announced during this earnings conference would be reflected in future quarter earnings not this one.


User currently offlineEricR From United States of America, joined Jul 2010, 1904 posts, RR: 1
Reply 3, posted (3 years 11 months 3 days 11 hours ago) and read 2102 times:

What source are you quoting that is estimating AA to post a loss of $1.34?

Analysts surveyed by Thomson Reuters expect AMR to report adjusted profit of 32 cents per share, or about $106 million, on revenue of $5.84 billion.

I think AA will report much better earnings than recent quarters due to the increased demand in airtravel and relatively low fuel costs.

However, AA is still not quite on par with other airlines in terms of profitability. ATI will help going forward, but their cost structure is still too high.


User currently offlinebobnwa From United States of America, joined Dec 2000, 6471 posts, RR: 9
Reply 4, posted (3 years 11 months 3 days 11 hours ago) and read 2067 times:

Quoting EricR (Reply 3):
What source are you quoting that is estimating AA to post a loss of $1.34?

I believe the estimate is for the whole year not just the quarter.


User currently offlineGlobalCabotage From United States of America, joined Nov 2009, 602 posts, RR: 0
Reply 5, posted (3 years 11 months 3 days 11 hours ago) and read 2057 times:

Given AA's performance over the last 10 quarters, one could say a profitable Q3, be it $10 USDor $125MM USD, would be strong given AA's past.

Also, remember that AA did not file Chapter 11 and does not have the labor savings that UA/CO, DL/NW, and others were able to get out of the Courts. If AA could lower their cost structure, they could be as profitable as other airlines.

AA advantages:
Hubs in top 4 US population markets (NYC, LA, CHI, DFW - AA is calling LA a hub).
MIA - Latin America hub.
ATI with BA, IB, and JL will be huge!

AA weaknesses:
High labor costs.
ORD hub has UA/CO competition. WN at MDW as well.
JFK hub has DL competition, and chronic delays. B6 does help.

Wildcard:
Seat capacity in the US market. We've seen a rebound in traffic in the US, and not a significant amount of seating capacity increase. This is resulting in increased fares and higher revenue per seat mile (long overdue). Will this stay constant, or will other carriers add capacity? As UA/CO integrate, I expect some seats to be lost. WN may add more, but they have seemed to be growing at a slower rate (not accounting for the merger which will change this).

AA announces a route (LAX-PVG) and UA responds. Will there be a contest between UA / AA to offset each other?


User currently offlineYazoo From United States of America, joined Aug 2001, 487 posts, RR: 0
Reply 6, posted (3 years 11 months 3 days 8 hours ago) and read 1766 times:

Quoting EricR (Reply 3):
What source are you quoting that is estimating AA to post a loss of $1.34?

Sorry yes I meant a loss of $1.34 for the year



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