American Airlines suffer slashed shares

Investment analysts have lost faith in the former largest carrier American Airlines (AMR) following American Airlines Inc. poor revenue projections for the third quarter.

AMR shares closed at $6.28 a decrease of 8.7 percent after figures showed unit revenue would come up short of analyst and investors’ expectations at 9.8 percent to 10.8 percent during the three months ending 30 September, The Dallas Morning News reported.

“Sharply lower than expected revenues are leading us to slash our estimates and reduce our target price to $6 from $7,” Soleil Securities Corp analyst Jim Higgins said.

Mr Higgins said he dropped his AMR profit estimates from 74 cents to 33 cents a share.

However, some analysts are still showing hope for the company cutting shares up to 28 cents to 31 cents.

“Softer revenue trends should not come as a surprise to many given the spate of poor consumer related economic data during the third quarter,” Stifel, Nicolaus and Co. airline analyst Hunter Keay said.

“However, consensus estimates are likely to be revised lower following misses to the revenue line and minimal changes to costs,” Mr Keay said.

The news came as a large sting to the airline that was the only carrier from the six largest American airlines to report a drop in shares.  However, share prices may not necessarily reflect the company’s overall success with The International Air Transport Association (IATA) predicting the airline will achieve a $3.5 billion profit this year, compared to the $2.9 billion loss from last year.

American Airlines

Source = e-Travel Blackboard: N.J
Pin It

Comments are closed.