American cuts 1st quarter revenue estimate

[jimntx]

https://www.wsj.com/articles/american-airlines-trims-unit-revenue-outlook-11554817544

Company cuts 1st quarter revenue estimate in expectation that 737 MAX grounding will require continued cancellation of 90 flights/day. Cut is flat to 1% growth compared to YOY figures from original estimate of flat to 2% growth YOY. Shares fall 3% on opening this morning. I guess we're lucky that the shares weren't worth that much to start with; so 3% drop is not a lot of share price.

Here's the Reuters link. I forgot that WSJ only gives short summary unless you are a paid subscriber.
https://www.reuters.com/article/us-...-forecast-shares-fall-3-percent-idUSKCN1RL1GJ

 

[swamt]

https://www.wsj.com/articles/american-airlines-trims-unit-revenue-outlook-11554817544

Company cuts 1st quarter revenue estimate in expectation that 737 MAX grounding will require continued cancellation of 90 flights/day. Cut is flat to 1% growth compared to YOY figures from original estimate of flat to 2% growth YOY. Shares fall 3% on opening this morning. I guess we're lucky that the shares weren't worth that much to start with; so 3% drop is not a lot of share price.

Here's the Reuters link. I forgot that WSJ only gives short summary unless you are a paid subscriber.
https://www.reuters.com/article/us-...-forecast-shares-fall-3-percent-idUSKCN1RL1GJ

Got a feeling this will be going longer than Boeing and our co's expected. It will more than likely also put a dent into 2nd Q's bottom lines as well.

 

[jimntx]

Agreed. In addition, once the problem(s) are found and solved, there is the PR issue of getting people to believe that in fact, the problem is solved and to be willing to board a 737 MAX 8. Two crashes with total loss of life in less than 6 months is unnerving, no matter how you handle it.

 

[WeAAsles]

“During the first quarter, American repurchased 16.7 million shares at a total cost of $600 million, and said that the fully diluted weighted average share count for the first quarter was roughly $454 million.”

I’m left to wonder what Management could have done with this so far wasteful spending had they allocated only half of the 12 Billion they’ve squandered thus far for share repurchases.

The Market is still not rewarding them for this decision and Parker is not even trying to defend the practice any longer.

 

[swamt]

Agreed. In addition, once the problem(or problems) are found and solved, there is the PR issue of getting people to believe that in fact, the problem is solved and to be willing to board a 737 MAX 8. Two crashes with total loss of life in less than 6 months is unnerving, no matter how you handle it.

I also think that Boeing will have to mod the aircraft for a SECOND backup system, like everything else has. I don't think just a software update will be all.

 

[AANOTOK]

Shouldn't Boeing reimburse these companies for lost revenue since they knew of the problem?

 

[cltrat]

Shouldn't Boeing reimburse these companies for lost revenue since they knew of the problem?

Yes they should,I’d expect th airlines are thinking the same thing.

Rest assured those lease payments are still coming

 

[Deleted member 14439]

Oh boy, there goes our profit sharing

 

[MetalMover]

“During the first quarter, American repurchased 16.7 million shares at a total cost of $600 million, and said that the fully diluted weighted average share count for the first quarter was roughly $454 million.”

I’m left to wonder what Management could have done with this so far wasteful spending had they allocated only half of the 12 Billion they’ve squandered thus far for share repurchases.

The Market is still not rewarding them for this decision and Parker is not even trying to defend the practice any longer.

Where are the Board of Directors in all of this?

 

[WeAAsles]

Where are the Board of Directors in all of this?

Trying to find replacements for Parker and Isom I hope?

 

[MetalMover]

Trying to find replacements for Parker and Isom I hope?

One can only hope!

 

[jimntx]

Where are the Board of Directors in all of this?

I'm quite sure the answer to your question is "right in the middle of the buy back." Do you really think a stock buy back of that magnitude could be accomplished without the knowledge, consent, and participation of the BOD? As the BOD are all holders of AAL stock, their holdings were probably the first to be reduced by the buy back.

 

[MetalMover]

I'm quite sure the answer to your question is "right in the middle of the buy back." Do you really think a stock buy back of that magnitude could be accomplished without the knowledge, consent, and participation of the BOD? As the BOD are all holders of AAL stock, their holdings were probably the first to be reduced by the buy back.

Exactly. Because of stock performance alone is a good reason to get their attention.

 

[swamt]

Shouldn't Boeing reimburse these companies for lost revenue since they knew of the problem?

Someone told us that more than likely Boeing will massively discount some future bus. with AA and SWA for this big hiccup.

 

[swamt]

Oh boy, there goes our profit sharing

Ours too brother. And I think this will go longer than they are expecting.