All Items Tagged With: "Earnings"

IATA cuts profit estimates in half for 2011

The International Air Transport Association is now estimating that the world’s airlines will earn $4 billion in 2011, down from its March estimate of $8.6 billion.

“Natural disasters in Japan, unrest in the Middle East and North Africa, plus the sharp…

IATA cuts profit estimates in half for 2011

The International Air Transport Association is now estimating that the world’s airlines will earn $4 billion in 2011, down from its March estimate of $8.6 billion.

“Natural disasters in Japan, unrest in the Middle East and North Africa, plus the sharp…

AMR expected to post Q2 2010 profit

Things change when one goes on a two-week vacation. But the big surprise for me when I got back this week is that Wall Street consensus has swung to a second quarter profit for AMR, parent of American Airlines.

It’s not much: 6 cents a share, or about $20 million. But it would be the first profit in seven quarters. Since AMR earned $31 million in Q3 2008, the company has lost $2.3 billion, Q4 2008 through Q1 2010.

Less than three weeks ago, the consensus was that AMR would lose 5 cents a share, or about $17 million, in Q2 2010. It was the only carrier among the nine largest U.S. airlines projected to lose money in the second quarter, usually one of the industry’s most profitable.

The change seems to be driven by sharp rises in unit revenue for AMR and other airline companies during this quarter.

But I note that consensus estimates for three of the nine largest companies — AirTran Holdings, Delta Air Lines and Southwest Airlines — have declined during the same period as AMR’s consensus increased.

That doesn’t mean they’ll lose money. According to analysts, those three will be profitable: more than $500 million at Delta, nearly $200 million at Southwest and $39 million for AirTran.

As a group, the nine are expected to earn $1.53 billion in the second quarter. That’s up $64 million from the June 4 consensus.

For the full year, AMR is still expected to lose money — 78 cents a share, or about $260 million. All other carriers are projected to be profitable.

As to the second quarter, we’ll know for sure on AMR when it reports quarterly results July 21 .

Analyst raises price targets on U.S. airline stock

Airline analyst Jamie Baker of JP Morgan has done an excellent job of keeping his enthusiasm in check over the years.

So it’s probably notable when he raises the earnings projections and price targets on a bunch of airline stocks on a single day, as Baker did on Tuesday.

He points to falling energy prices that likely will lower the fuel bills of U.S. airlines about $5.5 billion in 2010, and he expects operating profits to hit a record $13.4 billion in 2011.

“The broader thesis is unchanged; manageable fuel, tight supply, incremental revenue streams, disciplined managements and rapidly recovering demand portend a multiyear profit run for U.S. operators, in our view,” Baker said.

December 2010 price targets

He also raised the earnings estimates for the same airlines, which meant bigger profits for all but AMR. For AMR, he predicts a smaller loss.

Here are the previous full year 2010 estimates compared to his revised estimates. I’ve translated his earnings per share into total net income, in millions:

Of particular note, he now expects Delta in 2011 to post net income just over $3 billion, which must be a one-year record for an airline. Southwest he expects to hit close to $1.2 billion in net income, beating its previous record by about a half billion dollars.

He raised his AMR estimate for 2011 to $230 million in net income. If so, it would be AMR’s first profitable year since 2007.

Airlines reduce operating, net losses in Q1

With the nine largest U.S. airlines all reporting now, the results pretty much came out as analysts had expected: Not good, but better than last year.

The nine carriers reported a net loss of $1.03 billion for the quarter, compared to $1.86 billion a year earlier.

On an operating basis, excluding such things as interest payments and taxes, the group lost $97.0 million, up from a $980.2 million operating loss a year earlier.

Some points:

• Four airlines did worse than last year, led by AMR’s $505 million loss — $130 million worse than in first quarter 2009.

• Only two airlines reported a profit, and they both had lost money in Q1 2009 – Southwest Airlines and Alaska Air Group.

• The two airlines that reported a profit in Q1 2009 lost money in Q1 2010 – AirTran Airways and JetBlue Airways.

• The best improvement was shown by the biggest carrier, Delta Air Lines. But UAL and US Airways did significantly better as well.

• Four airlines that showed operating losses in Q1 2009 are reporting operating profits in Q1 2010. Delta leads the group, going from a $483 million operating loss to a $68 million operating profit. UAL, which lost $282 million on an operating basis a year ago, reported a $69 million operating gain.

• AMR again brought up the bottom, in both size of the loss and the biggest increase in operating loss. Its operating loss was $298 million, compared to $194 a year earlier.

Net income (in millions)

Operating income (in millions)

Largest U.S. airlines lose over $400 million in Q4 2009

The top nine U.S. airlines lost $435 million as a group in the fourth quarter. Not so good, but the same group lost over $4 billion in fourth quarter 2008.

Here’s how the carriers did, in millions of dollars: