American Airlines sees profits fall in Q4
American Airlines reported Thursday that Q4 profit slipped 11% as higher costs for fuel and labour offset rising revenue. The world's biggest airline also predicted that 2018 earnings would easily surpass Wall Street's expectations, a sign of continuing strong demand for travel. Still, American couldn't dodge investor concern over too much growth in the airline industry, and the company's shares were headed lower for a second straight day. American plans to grow 2.5 to 3% this year. On a call with analysts Thursday, Chairman and CEO Doug Parker argued that American is growing in a more disciplined manner than "in the old days," when carriers expanded widely during good times — often in competitors' strongest markets. Parker said much of American's growth will involve adding destinations from its own major hubs such as Dallas and increasing flights on existing routes from those hubs. "We think it is smart, efficient growth where we have competitive advantage" and "doesn't result in fare wars," he said. For Q4, American said that it earned $258m, down from $289m a year earlier. Excluding one-time gains and costs, American said it earned 95 cents per share. That beat the average Wall Street expectation of 92 cents per share. American said revenue rose 8.3% to $10.60b. That also beat analysts' expectations of $10.58b. On the cost side, American reported that Q4 spending on fuel jumped more than 23%, and labour expenses rose 7%. That caused operating expenses to grow faster than revenue.<br/>
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American Airlines sees profits fall in Q4
American Airlines reported Thursday that Q4 profit slipped 11% as higher costs for fuel and labour offset rising revenue. The world's biggest airline also predicted that 2018 earnings would easily surpass Wall Street's expectations, a sign of continuing strong demand for travel. Still, American couldn't dodge investor concern over too much growth in the airline industry, and the company's shares were headed lower for a second straight day. American plans to grow 2.5 to 3% this year. On a call with analysts Thursday, Chairman and CEO Doug Parker argued that American is growing in a more disciplined manner than "in the old days," when carriers expanded widely during good times — often in competitors' strongest markets. Parker said much of American's growth will involve adding destinations from its own major hubs such as Dallas and increasing flights on existing routes from those hubs. "We think it is smart, efficient growth where we have competitive advantage" and "doesn't result in fare wars," he said. For Q4, American said that it earned $258m, down from $289m a year earlier. Excluding one-time gains and costs, American said it earned 95 cents per share. That beat the average Wall Street expectation of 92 cents per share. American said revenue rose 8.3% to $10.60b. That also beat analysts' expectations of $10.58b. On the cost side, American reported that Q4 spending on fuel jumped more than 23%, and labour expenses rose 7%. That caused operating expenses to grow faster than revenue.<br/>
