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American Airlines, US Airways and Delta Air Lines beat analyst expectations

21-Oct-2010

American Airlines, US Airways and Delta Air Lines all made significant gains on Thursday (20-Oct-2010) after their financial results for the three months ended 30-Sep-2010 beat analyst expectations.

American Airlines (+12.6%) soared after ending its streak of seven consecutive quarterly losses, reporting a net profit of USD143 million or USD0.39 per diluted share for the three months ended 30-Sep-2010, compared to a loss of USD359 million in the previous corresponding period. The result was on a 14.0% year-on-year rise in revenue, to USD5,842 million. Analysts had forecast the carrier would report a profit of USD0.32 per share, on USD5.8 billion in revenue, according to Thomson Reuters

US Airways (+7.4%) reported a net profit of USD240 million or USD1.49 per share, compared to a loss of USD80 million in the previous corresponding period. Revenue was up 16.9% for the quarter, to USD3,179 million. The profit was a third quarter record for the carrier, traditionally the industry's busiest. According to Thomson Reuters, analysts on average expected the carrier to report a profit of USD1.16 per share, or USD106 million, on USD3.2 billion in revenue. The carrier also expects profits for the full year.

Delta Air Lines (+10.9%) reported a net profit of USD363 million or USD1.10 per diluted share for 3Q2010, compared to a loss of USD161 million in the previous corresponding period. This was on an 18% increase in revenue, to USD8,950 million. Analysts had on average expected the carrier to report a net profit of USD0.94 per share, according to Blooomberg.

Passenger yield for the quarter was up 16%, to USD 14.22 cents, while PRASM rose 16%, to USD 12.21 cents.

US Airways extends Mesa Airlines contract

In other news, US Airways extended Mesa Airlines' contract for 38 CRJ 900s for an additional 39 months beyond its original expiration on 30-Jun-2012. The deal was part of what the two companies called a non-binding “term sheet” covering the companies’ codeshare and revenue sharing agreement.

As expected, following the trend for offloading more risk on to regional partners, the deal reduces the rates paid to Mesa. The agreement is subject to definitive documents and the approval of the two company boards and Mesa’s bankruptcy court. Mesa has lost United and Delta contracts over the past year and now relies heavily on US Airways.

Elsewhere, Hawaiian Airlines (+14.7%) was the day’s biggest gainer after also reporting improved 3Q2010 financial results the day prior. Copa Airlines (-0.3%) was the only carrier to decline for the day.

North & South America selected airlines daily share price movements (% change): 20-Oct-2010


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