American struggles to Q4 loss, still profitable in '07
— -- American, the largest U.S. carrier, posted a loss of $69 million, or 28 cents a share, compared with a profit of $17 million, or 7 cents a share, during the same period a year earlier.
The latest results include one-time gains totaling $115 million, or 46 cents a share, with the biggest part coming from the sale of communications and engineering firm ARINC, the company said.
Analysts polled by Thomson Financial had been expecting the carrier to lose 75 cents a share. Those forecasts typically exclude one-time adjustments. On that basis, the company did a penny better per share than analysts expected.
AMR posted a profit in each of the preceding six quarters, according to Thomson.
Overall, 2007 is still expected to be the second-consecutive profitable year.
For the full year, AMR's profit was $504 million, or $1.78 a share, on revenue of $22.94 billion. That compared with profit in 2006 of $231 million, or 98 cents a share, on revenue of $22.56 billion.
Jet fuel prices in the first week of January averaged $2.78 a gallon vs. about $2.02 a gallon in the first half of 2007. The soaring cost is pushing carriers to raise fares this year after at least 17 successful fare increases in 2007.
AMR said its fourth-quarter fuel costs rose 29% to $1.87 billion.
But slackening travel demand, fears of a recession and the first signs of consumer resistance to higher fares could make further increases difficult or impossible, or even trigger more discounting at a time when the carriers can ill afford it.
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