Earnings Season For The Airlines

[BoeingBoy]

Earnings season starts in earnest tomorrow when both AMR & CAL are scheduled to report 1st quarter earnings, so I thought I'd start a little preview....

First, from Bloomberg today:

U.S. Airlines Add to Losses in First Quarter as Fuel Costs Rise

I guess everybody has seen WN's results, but Midwest Express reported today with a loss. The interesting tidbit for me was that they paid an average of $1.59 a gallon for jet fuel in the 1st quarter.

Lastly, FirstCall's latest earnings estimate from the analysts that forecast US's earnings (all 2 of them) predict a per share 1st quarter loss of $4.22, 2nd quarter loss of $0.16, 3rd quarter loss of $1.24, and 4th quarter loss of $2.10. Earlier predictions were of a $3.47 loss, $1.15 profit, $1.20 loss, and $2.25 loss for each quarter respectfully.

Annually, the above amounts to a $7.72 per share loss this year (from $6.25 earlier) and predictions are for a $3.00 per share loss in 2006 (from $1.50 earlier).

Presumably, the downward revisions are due to fuel costs.

Jim

[Oops - forgot to attach the First Call report.....]

 

[ringmaruf]

March traffic sounded strong to me, and there should be some aircraft utilization gains and cost cutting gains.

On the other hand, January yield guidance (the last given) sucked, and the weather was lousy this quarter.

I still say we'll beat estimates a little, for whatever that's worth. It'll be one ugly number in any event.

 

[BoeingBoy]

I still say we'll beat estimates a little, for whatever that's worth. It'll be one ugly number in any event.

[post="263082"][/post]​

I guess it depends on whether "unusual items" count. I can't for the life of me remember what it was and can't find any reference now, but US reported almost $878 million in "earnings" from reorganization items in Jan. Counting that, we're likely to show a profit for the quarter. Discounting that, we've already lost $5-$6 a share in just Jan/Feb.

BTS calculated our break-even LF as 82.8% in 4Q04*. Given what's happened to fuel prices (and despite the fare increases in March), that should increase a fair amount for 1Q05.

Jim

* BTS "Airline Quarterly Financial Review for 4Q04.

 

[funguy2]

Well, with only 2 brokers creating the estimate, there is room for US Airways to surprise...

 

[BoeingBoy]

AWA, AMR, & CAL reported today. All three reported fuel cost for the first quarter in the $1.40-$1.45 range before adjusting for taxes or hedging gains (AWA).

Jim