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American Airlines (AAL) Q4 Earnings Beat, FY24 View Bright
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American Airlines’ (AAL - Free Report) fourth-quarter 2023 earnings (excluding 26 cents from non-recurring items) of 29 cents per share easily beat the Zacks Consensus Estimate of 6 cents. In the year-ago quarter, AAL reported earnings of $1.17 per share.
Operating revenues of $13,062 million decreased 1% year over year. The top line beat the Zacks Consensus Estimate of $13,024.1 million.
Passenger revenues, accounting for 91.9% of the top line, decreased to $12,010 million from $12,131 million recorded a year ago. The metric exceeded our estimate of $11,936 million.
Cargo revenues decreased 24.2% to $199 million. The metric came ahead of our estimate of $191.7 million. Other revenues jumped 7.2% to $853 million, which missed our expectation of $859.8 million.
More on Q4 Earnings
Total revenue per available seat miles (a key measure of unit revenue: TRASM) decreased to 18.72 cents from 19.99 recorded a year ago. Passenger revenue per available seat miles (PRASM) decreased 6.4% to 17.21 cents. The actual PRASM figure was also lower than our expectation of 17.28 cents. Consolidated yield decreased 6.1% to 20.59 cents.
Reflecting the boost in air-travel demand, consolidated traffic (measured in revenue passenger miles) rose to 58,331 million from 55,320 million a year ago. To cater to this increased demand, capacity (measured in average seat miles) expanded to 69,773 million from 65,962 million in the year-ago quarter.
Consolidated load factor (percentage of seats filled by passengers) inched down 0.3 points to 83.6%. The actual figure for load factor was also lower than our expectation of 85.2%.
Total operating costs (on a reported basis) increased 5.1% year over year to $12,406 million, with expenses on salaries, wages and benefits rising to $3,689 million from $3,199 million a year ago. Average fuel price per gallon (including related taxes) tumbled to $3.06 from $3.50 a year ago.
Consolidated operating costs per available seat mile (excluding fuel and special items) increased 4.2% to 13.24 cents. The actual figure was less than our estimate of 13.50 cents. Fuel gallon consumption increased 5.5% to $1,033 million in fourth-quarter 2023.
Management expects first-quarter 2024 TRASM to be between 3.5% and 5.5%, lower than the first-quarter 2023 actuals. System capacity for the March-end quarter is estimated to increase 6.5-8.5% from first-quarter 2023 actuals.
Fuel cost per gallon is projected in the range of $2.65-$2.85 for first-quarter 2024. Fuel gallon consumption is expected to be between $1.04 billion and $1.06 billion. The adjusted operating margin in the March-end quarter is anticipated to be in the 0-2% range.
The company envisions total non-operating expenses to be $370 million for the first quarter. Cost per available seat miles (adjusted) is estimated to increase 2-4%. AAL projects the March-end quarter's loss per share (excluding net special items) to be in the 15-35 cents range using a share count of 655.7 million shares. The Zacks Consensus Estimate is currently pegged at a loss of 21 cents.
Management anticipates 2024 capacity to improve in mid-single digits from the year-ago levels. TRASM for the full year is expected to be approximately flat to down 3% from 2023 actuals. The adjusted operating margin for 2024 is estimated in the 6-9% range. The company envisions total non-operating expenses to be $1,425 million for the current year.
In 2024, cost per available seat miles (adjusted) is expected to increase 0.5-3.5% from the prior-year level. AAL expects a provision for income taxes at an effective rate of approximately 25% for the full year, which is expected to be substantially non-cash. Fuel cost per gallon is projected in the range of $2.5-$2.75 for 2024. Fuel gallon consumption is expected to be between $4.3 billion and $4.5 billion.
The company expects 2024 earnings (on an adjusted basis) in the band of $2.25-$3.25 per share. The Zacks Consensus Estimate of $2.12 lies below the mid-point, i.e. $2.75, of the guided range.
Performances of Other Transportation Companies
Delta Air Lines’ (DAL - Free Report) fourth-quarter 2023 earnings (excluding $1.88 from non-recurring items) of $1.28 per share comfortably beat the Zacks Consensus Estimate of $1.17. Earnings, however, declined 13.5% on a year-over-year basis due to high labor costs.
Revenues of $14,223 million surpassed the Zacks Consensus Estimate of $14,069.5 million and increased 5.9% on a year-over-year basis driven by strong holiday-air-travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $13,661 million, up 11% year over year.
United Airlines (UAL - Free Report) reported fourth-quarter 2023 earnings per share (excluding 19 cents from non-recurring items) of $2.00, which outpaced the Zacks Consensus Estimate of $1.61 but declined 18.7% year over year.
Operating revenues of $13,626 million beat the Zacks Consensus Estimate of $13,546.8 million. The top line increased 9.9% year over year due to upbeat air-travel demand. Cargo revenues fell 14.8% year over year to $402 million. Revenues from other sources jumped 10.6% year over year to $803 million.
J.B. Hunt Transport Services (JBHT - Free Report) fourth-quarter 2023 earnings per share of $1.47 missed the Zacks Consensus Estimate of $1.74 and declined 23.4% year over year.
Total operating revenues of $3,303.70 million surpassed the Zacks Consensus Estimate of $3,236.2 million but fell 9.5% year over year. Total operating revenues, excluding fuel surcharge revenues, decreased approximately 6% year over year.
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American Airlines (AAL) Q4 Earnings Beat, FY24 View Bright
American Airlines’ (AAL - Free Report) fourth-quarter 2023 earnings (excluding 26 cents from non-recurring items) of 29 cents per share easily beat the Zacks Consensus Estimate of 6 cents. In the year-ago quarter, AAL reported earnings of $1.17 per share.
Operating revenues of $13,062 million decreased 1% year over year. The top line beat the Zacks Consensus Estimate of $13,024.1 million.
Passenger revenues, accounting for 91.9% of the top line, decreased to $12,010 million from $12,131 million recorded a year ago. The metric exceeded our estimate of $11,936 million.
Cargo revenues decreased 24.2% to $199 million. The metric came ahead of our estimate of $191.7 million. Other revenues jumped 7.2% to $853 million, which missed our expectation of $859.8 million.
More on Q4 Earnings
Total revenue per available seat miles (a key measure of unit revenue: TRASM) decreased to 18.72 cents from 19.99 recorded a year ago. Passenger revenue per available seat miles (PRASM) decreased 6.4% to 17.21 cents. The actual PRASM figure was also lower than our expectation of 17.28 cents. Consolidated yield decreased 6.1% to 20.59 cents.
Reflecting the boost in air-travel demand, consolidated traffic (measured in revenue passenger miles) rose to 58,331 million from 55,320 million a year ago. To cater to this increased demand, capacity (measured in average seat miles) expanded to 69,773 million from 65,962 million in the year-ago quarter.
Consolidated load factor (percentage of seats filled by passengers) inched down 0.3 points to 83.6%. The actual figure for load factor was also lower than our expectation of 85.2%.
Total operating costs (on a reported basis) increased 5.1% year over year to $12,406 million, with expenses on salaries, wages and benefits rising to $3,689 million from $3,199 million a year ago. Average fuel price per gallon (including related taxes) tumbled to $3.06 from $3.50 a year ago.
Consolidated operating costs per available seat mile (excluding fuel and special items) increased 4.2% to 13.24 cents. The actual figure was less than our estimate of 13.50 cents. Fuel gallon consumption increased 5.5% to $1,033 million in fourth-quarter 2023.
American Airlines, currently carrying a Zacks Rank #2 (Buy), exited the quarter with $10.4 billion of total available liquidity. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Outlook
Management expects first-quarter 2024 TRASM to be between 3.5% and 5.5%, lower than the first-quarter 2023 actuals. System capacity for the March-end quarter is estimated to increase 6.5-8.5% from first-quarter 2023 actuals.
Fuel cost per gallon is projected in the range of $2.65-$2.85 for first-quarter 2024. Fuel gallon consumption is expected to be between $1.04 billion and $1.06 billion. The adjusted operating margin in the March-end quarter is anticipated to be in the 0-2% range.
The company envisions total non-operating expenses to be $370 million for the first quarter. Cost per available seat miles (adjusted) is estimated to increase 2-4%. AAL projects the March-end quarter's loss per share (excluding net special items) to be in the 15-35 cents range using a share count of 655.7 million shares. The Zacks Consensus Estimate is currently pegged at a loss of 21 cents.
Management anticipates 2024 capacity to improve in mid-single digits from the year-ago levels. TRASM for the full year is expected to be approximately flat to down 3% from 2023 actuals. The adjusted operating margin for 2024 is estimated in the 6-9% range. The company envisions total non-operating expenses to be $1,425 million for the current year.
In 2024, cost per available seat miles (adjusted) is expected to increase 0.5-3.5% from the prior-year level. AAL expects a provision for income taxes at an effective rate of approximately 25% for the full year, which is expected to be substantially non-cash. Fuel cost per gallon is projected in the range of $2.5-$2.75 for 2024. Fuel gallon consumption is expected to be between $4.3 billion and $4.5 billion.
The company expects 2024 earnings (on an adjusted basis) in the band of $2.25-$3.25 per share. The Zacks Consensus Estimate of $2.12 lies below the mid-point, i.e. $2.75, of the guided range.
Performances of Other Transportation Companies
Delta Air Lines’ (DAL - Free Report) fourth-quarter 2023 earnings (excluding $1.88 from non-recurring items) of $1.28 per share comfortably beat the Zacks Consensus Estimate of $1.17. Earnings, however, declined 13.5% on a year-over-year basis due to high labor costs.
Revenues of $14,223 million surpassed the Zacks Consensus Estimate of $14,069.5 million and increased 5.9% on a year-over-year basis driven by strong holiday-air-travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $13,661 million, up 11% year over year.
United Airlines (UAL - Free Report) reported fourth-quarter 2023 earnings per share (excluding 19 cents from non-recurring items) of $2.00, which outpaced the Zacks Consensus Estimate of $1.61 but declined 18.7% year over year.
Operating revenues of $13,626 million beat the Zacks Consensus Estimate of $13,546.8 million. The top line increased 9.9% year over year due to upbeat air-travel demand. Cargo revenues fell 14.8% year over year to $402 million. Revenues from other sources jumped 10.6% year over year to $803 million.
J.B. Hunt Transport Services (JBHT - Free Report) fourth-quarter 2023 earnings per share of $1.47 missed the Zacks Consensus Estimate of $1.74 and declined 23.4% year over year.
Total operating revenues of $3,303.70 million surpassed the Zacks Consensus Estimate of $3,236.2 million but fell 9.5% year over year. Total operating revenues, excluding fuel surcharge revenues, decreased approximately 6% year over year.