American Airlines (AAL) Q1 Earnings Top Estimates, Up Y/Y
Zacks Investment Research | Apr 26, 2018 12:16AM ET
American Airlines Group Inc.’s (NASDAQ:AAL) first-quarter 2018 earnings (excluding 36 cents from non-recurring items) of 75 cents per share surpassed the Zacks Consensus Estimate by a penny. Quarterly earnings increased approximately 23% on a year-over-year basis despite higher costs.
Revenues of $10,401 million fell short of the Zacks Consensus Estimate of $10,411.9 million. The top line, however, improved on a year-over-year basis. Strong demand for air travel led to the year over year improvement in the top line.
Total revenue per available seat miles (TRASM: a key measure of unit revenue) improved 3.5% to 15.80 cents in the reported quarter. Consolidated yield improved 1.5%. Passenger revenue per available seat miles (PRASM) improved 3%.
While traffic (measured by revenue passenger miles) was up 3.8%, capacity (measured by average seat miles) was up 2.3%. Consolidated load factor (percentage of seats filled by passengers) increased to 80.4% from 79.2% a year-ago as traffic growth outpaced capacity expansion in the first quarter of 2018.
Total operating expenses climbed 9.8% year over year to approximately $10 billion primarily due to the rise in fuel costs. Expenses pertaining to salaries and benefits were up 5.5%. Consolidated operating costs per available seat miles (CASM: excluding fuel and special items) increased 2.8%.
During the quarter under review, this Zacks Rank #3 (Hold) company returned $498 million to shareholders through dividends and buybacks. Furthermore, the carrier also declared a dividend of 10 cents per share. The dividend will be paid on May 22, to the shareholders on May 8.
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The company’s board also cleared a new buyback program worth $2 billion. It will be completed by Dec 31, 2020. 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.
American Airlines Group Inc. Price, Consensus and EPS Surprise
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