American Airlines Q2 Profit Tops Expectations, Shares Rise

Shares of

surged over 2 percent in pre-market trading after the company reported better-than-expected profit for the second quarter. The Fort Worth, Texas-based company posted quarterly net income of $1.71 billion, or $2.41 per share, compared to $864 million, or $1.17 per share, in the year-ago quarter. Excluding special charges, the company's earnings came in at $2.62 per share. Its revenue dropped 4.6 percent to $10.8 billion. However, analysts were expecting a profit of $2.60 per share on revenue of $10.86 billion. The average estimate among 31 Estimize users was for earnings of $2.67 per share and revenue of $10.99 million. Total available seat miles increased 1.9 percent, and passenger revenue per ASM (PRASM) declined 6.9 percent to 13.57 cents. Consolidated passenger yield shrank 6.1 percent to 16.28 cents. Its mainline cost per available seat mile slipped 12.8 percent to 11.87 cents. Total operating costs declined 10.5 percent to $8.9 billion in the quarter. As of June 30, 2015, American Airlines had around $9.7 billion in total cash and short-term investments. During the quarter, the company repurchased 17.3 million shares at an average price of $43.53 per share. The company's board declared a dividend of $0.10 per share. "Reporting the highest quarterly profit in our history is another indication that our team is on the path to restoring American as the greatest airline in the world," said Chairman and CEO Doug Parker. "These results are especially remarkable considering the significant and successful work underway to integrate two airlines. The more than 100,000 dedicated team members of American Airlines are doing a phenomenal job and we are grateful for their commitment to our customers." The company's board authorized an additional $2 billion share repurchase program. American Airlines shares gained 2.28 percent to $43.58 in pre-market trading.