Welcome to Flightinfo.com

  • Register now and join the discussion
  • Friendliest aviation Ccmmunity on the web
  • Modern site for PC's, Phones, Tablets - no 3rd party apps required
  • Ask questions, help others, promote aviation
  • Share the passion for aviation
  • Invite everyone to Flightinfo.com and let's have fun

AMR expected to lose over $1 Billion in 2011

Welcome to Flightinfo.com

  • Register now and join the discussion
  • Modern secure site, no 3rd party apps required
  • Invite your friends
  • Share the passion of aviation
  • Friendliest aviation community on the web

jonjuan

Honey Ryder
Joined
Feb 26, 2004
Posts
4,155
http://aviationblog.dallasnews.com/archives/2011/03/analyst-expects-amr-to-lose-ov.html


Analyst expects AMR to lose over $1 billion in 2011

By Terry Maxon/Reporter
[email protected] | Bio
12:58 PM on Tue., Mar. 22, 2011 | Permalink
Airline analyst Helane Becker now thinks AMR will lose $1.1 billion in 2011, as the Dahlman Rose & Co. analyst cut her earnings estimates for American Airlines' parent after AMR issued an investor update Tuesday morning.

Becker cut her 2011 forecast from a loss of 75 cents a share, or about $250 million, to a loss of $3.30 a share. For first quarter 2011, she now expects a loss of $1.35, or about $450 million, down from her prior estimate of a $1.12 per share loss, or about $373 million.

"We do not expect AMR to be profitable in any quarter this year, and as a result, we will maintain our Hold rating on the shares," Becker wrote in an earnings note to investors. "We believe these shares are unattractive until AMR can demonstrate some level of profitability."

AMR lost $471 million in 2010, following a $2.19 billion loss in 2008 and a $1.47 billion loss in 2009. Until recently, before jet fuel prices kept climbing, the consensus among analysts was that AMR would show a small profit in 2011.

Going into Tuesday, the analysts' consensus was that AMR would lose $1.17 a share, or about $390 million.

In its Tuesday update, AMR estimated that its jet fuel cost will increase to $3.01 a gallon in 2011, including taxes and effective hedges. It expects to use 2.81 billion gallons, or nearly $8.5 billion.

On Jan. 19 when it released 2010 earnings, AMR officials projected that its 2011 fuel costs would average about $2.67 a gallon. The update raises that by 34 cents a gallon, or nearly $1 billion.

By comparison, AMR spent $6.40 billion on jet fuel in 2010.

"Jet fuel continues to pressure AMR's already razor thin margins, significantly impacting 2011 EPS outlook," Becker wrote. "We acknowledge the pricing environment is improving, but not enough to offset industry high labor costs and the rising cost of jet fuel."
 
Don't worry, they have a secret bank account handy-- you know, the one they've been saving to buy jetblue with...
 
Looks like the $1B in secured notes they sold early this year ought to just about cover it.
 
Last edited:

Latest resources

Back
Top