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Why Is American Airlines (AAL) Up 10.8% Since the Last Earnings Report?
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It has been about a month since the last earnings report for American Airlines Group, Inc. (AAL - Free Report) . Shares have added about 10.8% in that time frame, outperforming the market .
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
American Airlines Q1 Earnings Top Estimates, Down Y/Y
American Airlines Group's first-quarter 2017 earnings (adjusted) of $0.61 per share beat the Zacks Consensus Estimate by $0.04. Quarterly earnings decreased significantly year over year due to higher costs.
Revenues of $9,624 million were 2% above the year-ago figure. Quarterly revenues edged past the Zacks Consensus Estimate of $9,621.3 million. Total revenue per available seat miles (TRASM) improved 3.1% in the reported quarter.
Consolidated yield improved 2.4% . Passenger revenue per available seat miles improved 2%. Traffic was down 1.5%, whereas capacity was down 1.1%. This resulted in relatively empty planes. Total operating expenses climbed 11.4% year over year to $9 billion primarily due to the rise in fuel costs. Expenses pertaining to salaries and benefits were up 6.5%. Consolidated operating costs per available seat miles (CASM: excluding special items) increased 7.6%. Average fuel price (including taxes) increased 40.4% to $1.7 per gallon.
During the quarter, the company returned $563 million billion to its shareholders through the payment of $51 million in dividends and buyback of shares worth $512 million. Furthermore, the carrier also declared a dividend of $0.10 per share.The dividend will be paid on May 30, to the shareholders on May 16.
Additionally, it remains focused on introducing new aircraft and retiring old ones from its fleet. In fact, keeping in with its aim to modernize its fleet, the carrier took delivery of 17 new mainline aircraft and five regional ones during the first quarter of 2017.
Also, the company invested $1.2 billion toward a new aircraft during the quarter. Moving ahead, it aims to shell out $4.1 billion in 2017 for the same purpose.
Outlook
Total revenue per available seat miles (TRASM) is expected to increase in the band of 3% to 5% in the second quarter of 2017 on a year-over-year basis. Pre-tax margin excluding special items is projected in the range of 11% to 13%. Consolidated CASM (excluding special itemsand fuel) for the second quarter is projected to increase 7%. The metric is expected to increase approximately 5% in 2017. Capacity (system) in 2017 is projected to increase 1.5% in 2017.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter.
At this time, the stock has a nice Growth Score of 'B', though it is lagging on the momentum front with a 'D'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregste VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for value investors while also being suitable for those looking for growth.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is American Airlines (AAL) Up 10.8% Since the Last Earnings Report?
It has been about a month since the last earnings report for American Airlines Group, Inc. (AAL - Free Report) . Shares have added about 10.8% in that time frame, outperforming the market .
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
American Airlines Q1 Earnings Top Estimates, Down Y/Y
American Airlines Group's first-quarter 2017 earnings (adjusted) of $0.61 per share beat the Zacks Consensus Estimate by $0.04. Quarterly earnings decreased significantly year over year due to higher costs.
Revenues of $9,624 million were 2% above the year-ago figure. Quarterly revenues edged past the Zacks Consensus Estimate of $9,621.3 million. Total revenue per available seat miles (TRASM) improved 3.1% in the reported quarter.
Consolidated yield improved 2.4% . Passenger revenue per available seat miles improved 2%. Traffic was down 1.5%, whereas capacity was down 1.1%. This resulted in relatively empty planes. Total operating expenses climbed 11.4% year over year to $9 billion primarily due to the rise in fuel costs. Expenses pertaining to salaries and benefits were up 6.5%. Consolidated operating costs per available seat miles (CASM: excluding special items) increased 7.6%. Average fuel price (including taxes) increased 40.4% to $1.7 per gallon.
During the quarter, the company returned $563 million billion to its shareholders through the payment of $51 million in dividends and buyback of shares worth $512 million. Furthermore, the carrier also declared a dividend of $0.10 per share.The dividend will be paid on May 30, to the shareholders on May 16.
Additionally, it remains focused on introducing new aircraft and retiring old ones from its fleet. In fact, keeping in with its aim to modernize its fleet, the carrier took delivery of 17 new mainline aircraft and five regional ones during the first quarter of 2017.
Also, the company invested $1.2 billion toward a new aircraft during the quarter. Moving ahead, it aims to shell out $4.1 billion in 2017 for the same purpose.
Total revenue per available seat miles (TRASM) is expected to increase in the band of 3% to 5% in the second quarter of 2017 on a year-over-year basis. Pre-tax margin excluding special items is projected in the range of 11% to 13%. Consolidated CASM (excluding special itemsand fuel) for the second quarter is projected to increase 7%. The metric is expected to increase approximately 5% in 2017. Capacity (system) in 2017 is projected to increase 1.5% in 2017.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter.
American Airlines Group, Inc. Price and Consensus
American Airlines Group, Inc. Price and Consensus | American Airlines Group, Inc. Quote
VGM Scores
At this time, the stock has a nice Growth Score of 'B', though it is lagging on the momentum front with a 'D'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregste VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for value investors while also being suitable for those looking for growth.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.