American Airlines Parent Narrows Loss as Sales Rise
AMR Corp., the parent of American Airlines, on Wednesday posted a narrower first-quarter loss that beat forecasts, and hinted at sunnier earnings for the busy summer season.
The results, helped by strong revenue gains, at least momentarily eased investor concern about record-breaking jet fuel prices and triggered a rally in shares of AMR and some rivals.
Fort Worth-based AMR posted a loss of $92 million, or 49 cents a share, compared with a loss of $162 million, or $1 a share, a year earlier.
The latest deficit was better than the 79 cents a share expected on average by Wall Street analysts, according to Reuters estimates.
Revenue rose 13% to $5.34 billion.
AMR has been trying to edge back into the black by keeping a tight rein on capacity, allowing it to fly its planes fuller and demand higher prices. AMR has also sought to get its unions involved in finding areas to cut costs and raise revenue.
The first quarter is traditionally a weak one for the industry, and the airline’s chief executive voiced optimism about the coming summer season.
“While fuel prices remain a wild card, the consensus view on Wall Street ... is that 2006 will be our first profitable year since 2000,” CEO Gerard Arpey told AMR employees in a letter. “We have a golden opportunity to prove them right, and the naysayers wrong.”
“The fact that the CEO is talking about a very robust summer bodes well for overall booking trends,” analyst Susan Donofrio of Cathay Financial said.
AMR’s loss narrowed despite a $349-million increase in fuel costs compared with a year earlier.
Separately, an airline spokesman confirmed that the carrier raised domestic round-trip fares by $10 -- the latest in a series of price increases this year.
AMR’s stock rose as high as $25.70 a share before closing at $24.74, up 92 cents.
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