|
Airlines see mixed 4Q results
|
 |
January 20, 1999: 4:06 p.m. ET
AMR, US Air miss estimates, but America West beats the Street
|
NEW YORK (CNNfn) - A decline in fuel costs did little to bolster the bottom lines of U.S. airlines in 1998, as several carriers Tuesday reported disappointing fourth-quarter results.
Blaming international market pressures, AMR Corp., parent of American Airlines, missed Wall Street expectations by a wide margin.
AMR (AMR) reported fourth-quarter net earnings of $182 million, or $1.09 per diluted share, including a special item for the fourth quarter, compared with a profit of $208 million, or $1.16 per share, a year ago, adjusted for a 2-for-1 stock split.
Excluding a special item totaling $15 million after taxes, AMR posted a fourth-quarter profit of $167 million, or $1 per diluted share, compared with net earnings of $195 million, or $1.09 per adjusted diluted share, a year ago.
For the year, AMR earned a record $1.3 billion, or $7.52 per diluted share, including the special item. That compares with net earnings including special items of $985 million, or $5.39 per share, adjusted for the stock split, in 1997.
Analysts expected the company to earn $1.16 a share for the quarter and $7.58 for the year, according to First Call estimates.
"As the numbers clearly demonstrate, we had an outstanding year in 1998, thanks in large part to the hard work of our employees, management's dedicated focus on the airline and related technology businesses, and very favorable external factors such as the strong domestic economy and lower fuel prices," Chairman and CEO Donald J. Carty said.
He added that fourth-quarter earnings were down from a year ago due to lower yields, especially in international markets.
US Air results dive
US Airways Group Inc. (U) also missed expectations. In the fourth quarter, net income was $104 million, or $1.18 per diluted share, a significant decline from last year's $479 million, or $4.66 per share, for the same period. Revenue climbed to $2.1 billion from $2 billion for the comparable period in 1997.
Analysts surveyed by First Call had forecast a profit of $1.20 for the quarter.
For the year, the Arlington, Va.-based airline posted net income of $538 million, or $5.60 per share, on revenue of $8.7 billion. Last year, earnings totaled $1 billion, or $9.87 per share, on revenue of $8.5 billion.
America West breaks from the pack
But America West Holdings Corp. (AWA), the parent company of America West Airlines, posted less-than-disappointing results. The Phoenix, Ariz.-based carrier reported earnings of $22.4 million, or 56 cents per diluted share, leaving Wall Street estimates of 39 cents in the dust. Last year's comparable results totaled $20.1 million, or 43 cents per share. Fourth-quarter revenue soared 4 percent to $507.1 million from $486.8 million.
Including non-recurring charges, net income for the quarter was $20.2 million and diluted earnings per share reached 51 cents.
For the year, earnings also took off. Net income swelled to $108.6 million, or $2.40 per diluted share, on revenue of $2 billion. In 1997, US Air earned $75 million, or $1.63 per share, with revenue of $1.9 billion.
Excluding non-recurring charges, net income for the full year was $110.8 million, with diluted earnings per share of $2.45.
"America West Airlines continued to successfully implement its growth plan and The Leisure Company exceeded our expectations in its first year of operation," William Franke, the company's chairman and chief executive, said. "We are particularly pleased with our improvement in fourth-quarter earnings at a time when the airline industry in general is experiencing declining profits."
United Airlines (UAL) Chief Executive Gerald Greenwald told CNNfn early Wednesday the company will release its results within 24 hours. He also said that despite the continued downturn in the Asia Pacific market, the company expects to report "another record" for 1998.
Airline shares reflected the day's news Wednesday afternoon, with AMR stock dropping 2-13/16 at 61-7/16, US Air down 3-3/16 at 54-1/4, and America West 1-1/16 higher at 19-3/16. 
|
|
|
|
|
 |
|
