Airline earnings mixed at AMR, Southwest and Delta

Posted Jul 18th 2007 4:10PM by Beth Gaston Moon
Filed under: Earnings Reports, Bad News, Consumer Experience, Southwest Airlines (LUV), AMR Corp (AMR), Delta Air Lines (DAL)

Fuel costs are on the rise and on-time rates are at record lows -- it's no wonder that earnings are a delicate topic at the major airlines. Here's a quick summary of the lackluster results from AMR Corp. (NYSE: AMR), Delta Air Lines (NYSE: DAL), and Southwest Airlines (NYSE: LUV):

AMR, the parent of American Airlines, reported second-quarter net income of $317 million, or $1.08 per share, up 9% from year-ago results. Revenue was down 1.6% to $5.88 billion. Both figures were below analysts' earnings and revenue estimates of $1.19 per share and $5.98 billion, respectively. According to MarketWatch, AMR cited "severe weather disruptions," calling the quarter's meteorological phenomenon "an enormous obstacle." Looking forward, AMR expects capacity to drop 2.4% on a year-over-year basis in the third quarter.

DAL announced quarterly results for the first time since emerging from bankruptcy at the end of April. The airline netted a profit of $1.8 billion, or $4.49 per share. Excluding items, Delta would have banked 70 cents per share, topping Street estimates. Sales rose 5.5% during the period to $5 billion, also topping Thomson Financial's composite target.

Finally, LUV said its net profit was off 16.5% at $278 million, or 36 cents per share (or 25 cents per share excluding items). Total operating revenue was up 5.5% to $2.58 billion. The "low-cost" carrier expects its fuel cost to rise to $1.70 a gallon in the current third quarter, up from $1.62 in the second. Its costs excluding fuel are also expected in increase above year-ago figures.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

Tags: airlines, AMR, AMR earnings, AmrEarnings, DAL, Delta earnings, DeltaEarnings, earnings, LUV, Southwest earnings, SouthwestEarnings