This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

American Loss Exceeds Estimates

DALLAS TheStreet) -- American (AMR) reported a second-quarter loss that exceeded what analysts had estimated and said higher fuel prices were largely to blame.

The carrier said it lost $286 million, or 85 cents a share. Analysts surveyed by Thomson Reuters had estimated a loss of 75 cents. Revenue rose 7.8% to $6.1 billion, in line with estimates.

In the same quarter a year earlier, American lost $11 million, or three cents a share.

Fuel costs, including the impact of hedging, rose 31% from a year earlier, the carrier said, adding $524 million to its costs.

American, the first major airline to report second-quarter earnings, is expected to be the only one to lose money. Peers Delta (DAL) and United (UAL) are expected to report profits, with United scheduled to report on Thursday and Delta scheduled to report on July 27.

In the long term, the aircraft order announced Wednesday should reduce American's fuel costs through the use of more efficient technology.

In the short term, CEO Gerard Arpey said the carrier will adjust its fall and winter schedules.

In the fall, American will make unspecified adjustments and will also cancel San Francisco-Honolulu and Los Angeles-San Salvador flying. In the winter, American will make seasonal adjustments on the transatlantic in conjunction with its joint venture partners. The carrier is also seeking a transportation waiver to suspend New York-Tokyo Haneda service through mid-2012.

American also said it would spin off American Eagle, distributing shares to current AMR shareholders. The arrangement would enable Eagle to compete for other carriers' regional flying.

During the quarter, consolidated passenger revenue per available seat mile rose 4.9%, while mainline PRASM grew 4.3%, despite extreme weather in Dallas and the continuing impact of the earthquake and tsunami in Japan.

On the cost side, cost per available seat mile excluding fuel grew by 2.1% as the company added capacity in select markets including Asia.

Looking ahead, American said full-year cost per available seat mile excluding fuel and the cost of any new labor agreements will increase by 0.5% to 1.5%. Mainline capacity will increase by 1.9%, with domestic capacity flat and international capacity up 5%. Consolidated capacity will increase by 2.6%.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,915.07 -70.54 -0.42%
S&P 500 1,964.68 -8.15 -0.41%
NASDAQ 4,396.2040 -22.83 -0.52%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs