Updated from 10:56 a.m. EST

AMR ( AMR), the parent of American Airlines, reported a $17 million profit in the fourth quarter, concluding its third consecutive profitable quarter and its first profitable year since 2000.

The world's largest airline company earned 7 cents a share. Revenue was $5.4 billion, up 4.4%. Analysts polled by Thomson Financial had expected a loss of 13 cents a share on revenue of $5.5 billion.

In the fourth quarter a year earlier, the airline reported a net loss of $600 million. For the full year 2006, American had a $231 million profit, compared with a loss of $857 million for 2005.

American's profit was a surprise after the airline warned last month that fourth-quarter costs would rise more than expected. At the time, analysts were projecting earnings of 47 cents a share, but many subsequently revised their targets downward.

"The guidance was driven by trends in the early weeks of December related to revenue and fuel," said CEO Gerard Arpey, on a conference call with analysts and reporters. " But the last week in December came in much stronger than what we had anticipated based on the yield trend, and then fuel turned out to come in better than we had expected."

CFO Tom Horton said high holiday load factors enabled the airline to maximize ticket revenue. Compared with low-cost carriers, "We're cost competitive most of the time, but without fare caps we're able to sell up more than they do on peak days," he said.

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