AAMRQ Posts Profits in 4Q - Analyst Blog

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AMR Corporation ( AAMRQ ), the parent company of American Airlines posted impressive results for the fourth quarter and the year ended December 31, 2012. The company's net profit for the quarter came in at $262 million, or 69 cents per share, up from a loss of $1.1 billion or $3.27 per share posted in the year-ago quarter.

Included above are $350 million worth reorganization and special gains, excluding which the fourth quarter's net results come to a loss of $88 million, still an improvement of $121 million from the year-ago results. Results were hit hard, amounting to $142 million, by natural calamities including Hurricane Sandy, snow storm in November and operational disruptions in late third quarter and early fourth quarter.

For 2012, the company posted a net loss of $1.9 billion versus a $2.0 billion loss in the earlier year. Excluding negative reorganization and special items worth $1.7 billion, net results for 2012 was a loss of $130 million versus a loss of $1.1 billion in 2011.

Revenue in the fourth quarter of 2012 was $5.9 billion, down 0.3% year over year. Of the total, Passenger revenue from American Airlines was $4.4 billion, flat year over year and those from Regional Affiliates was $706 million, up 0.8% year over year. Cargo revenue for the quarter was at $170 million and revenue from other sources came in at $621 million. For 2012, total revenue generated was $24.9 billion, up 3.7% from 2011.

Consolidated passenger revenue per available seat mile (PRASM) in the fourth quarter was flat at 12.61 cents while that for American Airlines went down 0.4% to 11.85 cents. Consolidated passenger load factor was 81% while that for American Airlines was 81.6%.

Operating expenses plummeted 12% year over year in the quarter on the back of a 13% reduction in wages, salaries and benefits; 22% in Aircraft rentals; 13% in other rentals and landing fees, among others. In 2012, the company reduced its labour cost charges by 17%.

At the end of 2012, American Airlines had 608 aircraft operating which included 190 MD-80 and 195 Boeing 737-800, among others, while Regional Aircraft in operation were 281 in number.

For the first quarter of 2013, management anticipated consolidated capacity to be down 1.7% year over year. Unit costs are expected to improve in the quarter. Fleet size for year end 2013 is estimated to reach 610 for American Airlines and 259 for Regional Airlines.

AMR Corporation currently bears a Zacks Rank #3, implying a short-term (1-3 months) Hold rating. The company's prime competitor Delta Air Lines Inc. ( DAL ) and United Continental Holdings, Inc. ( UAL ) both hold a Zacks Rank #3 (Hold).

AMR CORP (AAMRQ): Free Stock Analysis Report

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UNITED CONT HLD (UAL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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