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American Airlines (AAL) Posts Q3 Loss, Suffers Revenue Dip Y/Y
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American Airlines' (AAL - Free Report) third-quarter 2020 loss makes it join the club of Alaska Air Group (ALK - Free Report) , United Airlines (UAL - Free Report) and Delta Air Lines (DAL - Free Report) as all suffered the same setback
American Airlines incurred a loss (excluding 83 cents from non-recurring items) of $5.54 per share, comparing favorably with the Zacks Consensus Estimate of a loss of $5.62. However, the company delivered earnings per share of $1.42 in the year-ago quarter. Results in the third quarter were hurt by the coronavirus-induced air-travel demand woes.
Operating revenues of $3,173 million slumped 73.4% year over year but surpassed the Zacks Consensus Estimate of $2,800.8 million. Passenger revenues, which accounted for bulk of the top line (80.1%), plunged 76.9% to $2,540 million as well. Cargo revenues too declined marginally to $207 million, mainly due to 45.8% lower cargo ton miles. Other revenues also dropped 39.9%.
Total revenue per available seat mile (TRASM: a key measure of unit revenues) decreased 34.4% year over year to 10.31 cents in the reported quarter on a consolidated basis. Further, passenger revenue per available seat miles (PRASM) fell 43.1% to 8.25 cents in the period. Moreover, consolidated yield was down 17.3%.
American Airlines Group Inc. Price, Consensus and EPS Surprise
While consolidated traffic (measured in revenue passenger miles) plummeted 72.1%, capacity (measured in average seat miles) contracted 59.4%. Consolidated load factor (percentage of seats filled by passengers) decreased 26.7 percentage points to 58.9% as traffic decline was more than capacity reduction.
Total operating costs (on a reported basis) declined 45.6% year over year to $6,044 million with expenses pertaining to aircraft fuel and related taxes tumbling 77.2%. However, consolidated operating costs per available seat mile (CASM: excluding fuel and special items) shot up more than 48% to 21.33 cents due to weak capacity. With major part of the fleet remaining grounded/under-utilized, fuel gallons consumed tanked 58.7%. Average fuel price per gallon (including related taxes) also declined 40.1% to $1.23.
Other Details
Driven by its cost-control initiatives, American Airlines’ average daily cash burn in the September quarter was $44 million per day, comparing favorably with the June-quarter’s figure of $58 million. Also, it exited the third quarter with available liquidity of $13.6 billion. The carrier expects cash burn rate to be approximately in the $25-$30 million range per day for the December quarter.
However, American Airlines expects system capacity for the December quarter to nosedive more than 50% on a year-over-year basis. Long-haul international capacity is estimated to be down approximately 75% year over year in the final quarter of the year.
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American Airlines (AAL) Posts Q3 Loss, Suffers Revenue Dip Y/Y
American Airlines' (AAL - Free Report) third-quarter 2020 loss makes it join the club of Alaska Air Group (ALK - Free Report) , United Airlines (UAL - Free Report) and Delta Air Lines (DAL - Free Report) as all suffered the same setback
American Airlines incurred a loss (excluding 83 cents from non-recurring items) of $5.54 per share, comparing favorably with the Zacks Consensus Estimate of a loss of $5.62. However, the company delivered earnings per share of $1.42 in the year-ago quarter. Results in the third quarter were hurt by the coronavirus-induced air-travel demand woes.
Operating revenues of $3,173 million slumped 73.4% year over year but surpassed the Zacks Consensus Estimate of $2,800.8 million. Passenger revenues, which accounted for bulk of the top line (80.1%), plunged 76.9% to $2,540 million as well. Cargo revenues too declined marginally to $207 million, mainly due to 45.8% lower cargo ton miles. Other revenues also dropped 39.9%.
Total revenue per available seat mile (TRASM: a key measure of unit revenues) decreased 34.4% year over year to 10.31 cents in the reported quarter on a consolidated basis. Further, passenger revenue per available seat miles (PRASM) fell 43.1% to 8.25 cents in the period. Moreover, consolidated yield was down 17.3%.
American Airlines Group Inc. Price, Consensus and EPS Surprise
American Airlines Group Inc. price-consensus-eps-surprise-chart | American Airlines Group Inc. Quote
While consolidated traffic (measured in revenue passenger miles) plummeted 72.1%, capacity (measured in average seat miles) contracted 59.4%. Consolidated load factor (percentage of seats filled by passengers) decreased 26.7 percentage points to 58.9% as traffic decline was more than capacity reduction.
Total operating costs (on a reported basis) declined 45.6% year over year to $6,044 million with expenses pertaining to aircraft fuel and related taxes tumbling 77.2%. However, consolidated operating costs per available seat mile (CASM: excluding fuel and special items) shot up more than 48% to 21.33 cents due to weak capacity. With major part of the fleet remaining grounded/under-utilized, fuel gallons consumed tanked 58.7%. Average fuel price per gallon (including related taxes) also declined 40.1% to $1.23.
Other Details
Driven by its cost-control initiatives, American Airlines’ average daily cash burn in the September quarter was $44 million per day, comparing favorably with the June-quarter’s figure of $58 million. Also, it exited the third quarter with available liquidity of $13.6 billion. The carrier expects cash burn rate to be approximately in the $25-$30 million range per day for the December quarter.
However, American Airlines expects system capacity for the December quarter to nosedive more than 50% on a year-over-year basis. Long-haul international capacity is estimated to be down approximately 75% year over year in the final quarter of the year.
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The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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