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American Airlines (AAL) Beats on Q4 Earnings

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American Airlines Group (AAL - Free Report) reported fourth-quarter 2017 earnings per share (excluding 41 cents from non-recurring items) of 95 cents, beating the Zacks Consensus Estimate of 92 cents. Earnings increased 3.3% on a year-over-year basis.

How Was the Estimate Revision Trend?

Investors should note that the earnings estimate revisions for American Airlines depicted a rosy picture prior to the earnings release. The stock had seen the Zacks Consensus Estimate for fourth-quarter earnings being revised 29.6% upward over the last 30 days

Moreover, the carrier has an impressive earnings surprise history. Even before posting the earnings beat in the fourth-quarter, the company delivered positive surprises in three of the past four quarters. The average earnings beat was 3%.

 

Revenues Better Than Expected

American Airlines recorded revenues of $10,600 million, which surpassed the Zacks Consensus Estimate of $10, 581 million. Moreover, it compared favorably with the year-ago number of $9,789 million.

Key Statistics: Operating cost per available seat mile excluding fuel and special items increased 3.8% on a year over year basis. Total revenue per available seat miles (TRASM) improved 5.6% in the reported quarter. Yield improved 4.4%.

During 2017, the company returned $1.7 billion to shareholders through dividends and buybacks. Furthermore, the carrier also declared a dividend of 10 cents per share. The dividend will be paid on Feb 20, to the shareholders on Feb 6. We are impressed by the company’s efforts to reward shareholders through stock repurchases and dividend payments. TRASM is expected to increase in the band of 2% to 4% in the first quarter of 2018. Pre-tax margin excluding special items is projected in the range of 2% to 4%. Adjusted earnings per share in 2018 are expected between $5.50 and $6.50. The Zacks Consensus Estimate for 2018 earnings is currently pegged at $5.14 per share.

 

Zacks Rank: Currently, American Airlines carries a Zacks Rank #3 (Hold) which is subject to change following the earnings announcement. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Check back later for our full write up on this American Airlines earnings report later!

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