Since its last earning report from a month ago, American Airlines Group, Inc (NASDAQ:$AAL) is down 12.9% in its shares – way underperforming in the market.
Before we break it down, let’s take a look at AAG’s latest earning report:
2nd Quarter
- Adjusted earnings of $1.92/share, improved by 8.47% on a year-over year basis
- Revenues of $11,105 million improved by 7.16% from the year-ago figure
- Total revenue per available seat miles improved by 5.7%
- Consolidated yield improved by 4.3%
- Passenger revenue per available seat miles improved by 5%
- Traffic was up by 2.1%
- Total operating expenses increased by 11.1% year over year to $9.6 billion, backed by rise in fuel costs
- Salaries and benefits expenses increased by 12.5%
American Airlines remain focused in its focus of retiring old aircraft in favor of the new. The carrier took delivery of 16 new mainline aircraft and 4 regional ones during the second quarter of 2017. In monetary value, that’s a $1.1 billion investment. Going forward, the company plans to budget $4.1 billion more for the same purpose. Moreover, TRASM and CASM are both expected to increase in the third quarter of 2017.
Following the release, investors are worried, and estimates are trending downward for the stock. However, we will wait and see if an in-line return from the stock is possible in the next few months.
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