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American Airlines (AAL) Q4 Earnings Top Estimates, Up Y/Y
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American Airlines Group Inc.’s (AAL - Free Report) fourth-quarter 2017 earnings (excluding 41 cents from non-recurring items) of 95 cents per share surpassed the Zacks Consensus Estimate by 3 cents. Quarterly earnings increased 3% on a year-over-year basis despite higher costs. Results were aided by higher revenues.
Revenues of $10,600 million were 8.3% above the year-ago figure. The Zacks Consensus Estimate for fourth-quarter revenues of $10,581.1 million. Strong demand for air travel coupled with improving yields drove the top line in the quarter under review.
Total revenue per available seat miles (TRASM: a key measure of unit revenue) improved 5.6% to 15.74 cents in the reported quarter. In fact, this quarter marked the fifth successive one in which the metric grew on a year-over-year basis, since the fourth quarter of 2014.
Consolidated yield improved 4.4%. Passenger revenue per available seat miles improved 5.4%. While traffic (measured by revenue passenger miles) was up 3.5%, capacity (measured by average seat miles) was up 2.5%. Consolidated load factor (percentage of seats filled by passengers) increased to 82.1% from 81.4% a year-ago as traffic growth outpaced capacity expansion in the final quarter of 2017.
Total operating expenses climbed 9.8% year over year to $9.9 billion primarily due to the rise in fuel costs. Expenses pertaining to salaries and benefits were up 7%. Consolidated operating costs per available seat miles (CASM: excluding fuel and special items) increased 3.8%.
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.
Meanwhile, the carrier remains focused on introducing new aircraft and retiring old ones from its fleet. In fact, keeping in with its aim to modernize its fleet, the carrier invested $4.1 billion during 2017 in new aircraft.
American Airlines Group, Inc. Price, Consensus and EPS Surprise
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.
Consolidated CASM (excluding special items and fuel) is expected to increase 4% in the first quarter of 2018. The metric is also anticipated to increase approximately 2% in 2018. The metric is expected to increase in the band of 1% to 2% in each of 2019 and 2020. Capacity (system) in 2018 is projected to increase 2.5% year over year.
Upcoming Releases
Investors interested in the Zacks Airline industry are keenly awaiting fourth-quarter earnings reports from key players like Hawaiian Holdings , Allegiant Travel Company (ALGT - Free Report) and Spirit Airlines (SAVE - Free Report) in the coming days. While Hawaiian Holdings is scheduled to report on Jan 29, Allegiant and Spirit Airlines are scheduled to do the same on Jan 31 and Feb 6, respectively.
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American Airlines (AAL) Q4 Earnings Top Estimates, Up Y/Y
American Airlines Group Inc.’s (AAL - Free Report) fourth-quarter 2017 earnings (excluding 41 cents from non-recurring items) of 95 cents per share surpassed the Zacks Consensus Estimate by 3 cents. Quarterly earnings increased 3% on a year-over-year basis despite higher costs. Results were aided by higher revenues.
Revenues of $10,600 million were 8.3% above the year-ago figure. The Zacks Consensus Estimate for fourth-quarter revenues of $10,581.1 million. Strong demand for air travel coupled with improving yields drove the top line in the quarter under review.
Total revenue per available seat miles (TRASM: a key measure of unit revenue) improved 5.6% to 15.74 cents in the reported quarter. In fact, this quarter marked the fifth successive one in which the metric grew on a year-over-year basis, since the fourth quarter of 2014.
Consolidated yield improved 4.4%. Passenger revenue per available seat miles improved 5.4%. While traffic (measured by revenue passenger miles) was up 3.5%, capacity (measured by average seat miles) was up 2.5%. Consolidated load factor (percentage of seats filled by passengers) increased to 82.1% from 81.4% a year-ago as traffic growth outpaced capacity expansion in the final quarter of 2017.
Total operating expenses climbed 9.8% year over year to $9.9 billion primarily due to the rise in fuel costs. Expenses pertaining to salaries and benefits were up 7%. Consolidated operating costs per available seat miles (CASM: excluding fuel and special items) increased 3.8%.
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.
Meanwhile, the carrier remains focused on introducing new aircraft and retiring old ones from its fleet. In fact, keeping in with its aim to modernize its fleet, the carrier invested $4.1 billion during 2017 in new aircraft.
American Airlines Group, Inc. Price, Consensus and EPS Surprise
American Airlines Group, Inc. Price, Consensus and EPS Surprise | American Airlines Group, Inc. Quote
Outlook
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.
Consolidated CASM (excluding special items and fuel) is expected to increase 4% in the first quarter of 2018. The metric is also anticipated to increase approximately 2% in 2018. The metric is expected to increase in the band of 1% to 2% in each of 2019 and 2020. Capacity (system) in 2018 is projected to increase 2.5% year over year.
Upcoming Releases
Investors interested in the Zacks Airline industry are keenly awaiting fourth-quarter earnings reports from key players like Hawaiian Holdings , Allegiant Travel Company (ALGT - Free Report) and Spirit Airlines (SAVE - Free Report) in the coming days. While Hawaiian Holdings is scheduled to report on Jan 29, Allegiant and Spirit Airlines are scheduled to do the same on Jan 31 and Feb 6, respectively.
Zacks Rank
American Airlines carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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