American Airlines' profit margin forecast helps shares up

American Airlines shares rose 4% Thursday after the company said its profit margin for the current quarter would be higher than most on Wall Street expected, helped by a dip in fuel costs from their recent spike. The carrier by passenger traffic maintained its full-year guidance and forecast an additional $1 billion in revenue next year as improvements in aircraft, onboard technology and food offerings take effect. Its shares rose 4% to $31.54 in morning trading. They are still down 35& in the past 12 months, as American has struggled to grow revenue at the rate of rivals Delta and United. The company said it is targeting a pre-tax margin, excluding special items, between 4.5 and 6.5% in Q4. That suggests earnings above Wall Street’s expectations, analysts said. The carrier forecast unit revenue, a closely watched performance measure that compares sales to flight capacity, to rise between 1.5 to 3.5% in Q4. “Unit revenue guidance has been consistently ahead of expectations this earnings season as the industry is seeing good demand and improved yields due in part to strong close-in bookings,” said Helane Becker, an analyst at Cowen. In Q3, American’s profit halved, in line with Wall Street estimates, hurt by higher fuel costs and the impact of Hurricane Florence that forced it to cancel about 2,100 flights in September. The company said it would cut capacity, cancel loss-making routes and delay taking delivery of new aircraft to cut costs, but stuck to its full-year profit forecast of $4.50 to $5.00 per share.<br/>