American Airlines Sales Top Estimates on Traffic, Fare Gains

Jan 28, 2014 10:23 am ET

(Updates with analyst comment in fourth paragraph.)

Jan. 28 (Bloomberg) -- American Airlines Group Inc., which combined with US Airways last month to form the world’s biggest carrier, reported fourth-quarter sales that beat analysts’ estimates as average fares rose.

Sales on a combined basis climbed 8.7 percent to $9.98 billion, exceeding the $9.9 billion average among nine analysts surveyed by Bloomberg. Profit was $436 million excluding some costs, compared with a loss of $42 million a year earlier, the Fort Worth, Texas-based company said in a statement today.

Former American parent AMR Corp. exited bankruptcy in December in a merger with US Airways Group Inc., capping a transaction announced in February. The deal closed Dec. 9, vaulting the new American into the top spot in the global industry by traffic two years after AMR sought court protection following annual losses that began in 2008.

“It reflects the strong quarter that you’ve seen in the industry so far, with leisure traffic being strong in the holiday months,” Savanthi Syth, a Raymond James Financial Inc. analyst, said in an interview. “Margins expanded, which is what you’ve seen across the board.”

Investors will focus on comments from American executives about progress in the merger integration, said Syth, who is based in St. Petersburg, Florida, and rates American shares market perform.

American rose 3.5 percent to $31.23 at 10:03 a.m. in New York.

Earnings per share on a combined basis were 59 cents, American said. That beat the 55-cent average of 12 estimates compiled by Bloomberg. Yield, or the average fare per mile, increased 5.3 percent, and traffic rose 3 percent.

Syth had estimated $9.94 billion for fourth-quarter revenue and earnings of 50 cents a share.

American reported a combined net loss of $1.95 billion, including $2.2 billion in costs for the airline’s bankruptcy reorganization, compared with net income of $299 million a year earlier.

--Editors: John Lear, Niamh Ring