(By Salman - iStockAnalyst Writer)AMR Corp. (NYSE:
AMR), the world's second-largest carrier, is scheduled to report third-quarter results on Wednesday, October 14, 2009. Analysts, on average, expect the company to report a loss of 86 cents a share on revenue of $5.10 billion. In the year ago quarter, the company reported earnings of 17 cents per share on revenue of $6.42 billion.
In July, Fort Worth, Texas-based company reported second-quarter net loss of $390 million or $1.39 per share, compared with a net loss of $1.46 billion or $5.83 per share in the year earlier quarter. Excluding non-recurring charges,
AMR posted a quarterly loss of $319 million or $1.14 per share, compared with a net loss of $298 million or $1.19 per share last year.It also reported total operating revenues of $4.89 billion, a 20.9% decline from $6.18 billion reported in the previous year. Analysts, on average, expected the company to report a loss of $1.28 per share on revenue of $4.90 billion.
Last month,
AMR said that said it expects third quarter unit revenue, or revenue divided by capacity, to fall 14.5 percent to 15.5 percent compared with the same period last year. Counting regional flying, unit revenue is expected to decline 14.3 percent to 15.3 percent.
The airlines have been hit hard by the severe economic recession, volatile fuel costs and a slump in travel demand. Weak job market has added to the woes of the carriers. The Swine Flu, its pandemic designation, and the predictions for a huge percentage of the populations of many countries contracting the Swine Flu too has put a big dent in airplane traffic.
However, industry experts feel that an airline recovery may be under way. The credit markets have improved in recent times, which has led the banks to re-evaluate their position vis-à-vis lending to airlines. Most of the major airlines have been tapping the thawing credit markets, raising cash and refinancing debt to bolster liquidity, improve their balance sheet, ease bankruptcy concerns and prepare for next year's expected recovery. Late last month,
AMR completed offerings of 48.48 million shares of its common stock and $460 million principal amount of its 6.25% convertible senior notes due 2014. The aggregate net proceeds from the offerings, after underwriting discounts and expenses, were approximately $830 million.
In September,
AMR Corp. also obtained $2.9 billion in new financing. The funds included $1.3 billion in new liquidity, including $1 billion in cash from the advance sale of AAdvantage frequent flyer miles to Citi (NYSE:
C), and nearly $300 million via a cash loan from GE Capital Aviation Services. The remaining $1.6 billion came from sale-lease finance commitments for Boeing 737 aircraft that were previously owned by the company, the company said. AMR said it will use the funding to purchase additional aircraft and to add first class cabins to existing aircraft. The company also said it will shift more capacity to hubs in Dallas-Forth Worth, Chicago, Miami and New York City.
Meanwhile, monthly air-traffic trends have continued to improve. The International Air Transport Association reported last month that passenger traffic fell 1.1% in August compared with a year ago, a slower rate of decline than the 2.9% drop seen in previous month. Early in October,
AMR said that load factor, or the amount of seats filled on American Airlines flights, climbed 2.8 percentage points to 79.4% last month from 76.6% a year earlier. Capacity declined 6.9%, more than offsetting a 3.5% drop in traffic.
AMR, along with rival Delta Airlines (NYSE:
DAL), is also vying for a stake in Japan Airlines Corp., in order expand overseas networks amid dwindling travel demand in the recession.
In terms of stock performance, AMR shares are down almost 32% since the beginning of the year. Shares of the airline company rose 27 cents or 3.62% to $7.72 in afternoon trade on Thursday.
Disclosure: Author doesn't own any of the stocks discussed here.
