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American Airlines profit falls 44pc on one-off items, sales down 4.4pc
AMERICAN Airlines (AA) second quarter net profit fell 44 per cent year on year to US$950 million, drawn on revenues of $10.4 billion, which slipped 4.4 per cent.
Profits were hit by a provisioning for an income tax bill that surged to $543 million from $15 million, Reuters reports, while saying lower fuel costs cushioned the blow.
Excluding this, American's profit handily beat the average analyst estimates, according to Thomson Reuters I/B/E/S and Bloomberg polling.
But American wrote off $20 million for federally regulated slots to take off and land at Newark Liberty Airport. The Federal Aviation Administration removed caps in April on the slots, which had been valuable for airlines to buy or trade.
United Airlines, which dominates Newark with a hub there, wrote off $412 million and Southwest Airlines wrote off $21 million for its slots.
"These strong second-quarter results are the result of the hard work by our people to improve every aspect of our airline," said CEO Doug Parker.
But S&P analyst Jim Corridore downgraded American from "strong buy" to "buy" because of the airline's high debt levels. "But we expect the airline to continue to generate solid profits and cash from operations," he said.
Profits were hit by a provisioning for an income tax bill that surged to $543 million from $15 million, Reuters reports, while saying lower fuel costs cushioned the blow.
Excluding this, American's profit handily beat the average analyst estimates, according to Thomson Reuters I/B/E/S and Bloomberg polling.
But American wrote off $20 million for federally regulated slots to take off and land at Newark Liberty Airport. The Federal Aviation Administration removed caps in April on the slots, which had been valuable for airlines to buy or trade.
United Airlines, which dominates Newark with a hub there, wrote off $412 million and Southwest Airlines wrote off $21 million for its slots.
"These strong second-quarter results are the result of the hard work by our people to improve every aspect of our airline," said CEO Doug Parker.
But S&P analyst Jim Corridore downgraded American from "strong buy" to "buy" because of the airline's high debt levels. "But we expect the airline to continue to generate solid profits and cash from operations," he said.
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