American Airlines: Soaring Above Expectations with Fourth-Quarter Earnings

Published: January 23, 2020

Financial Highlights

American Airlines Group Inc. (NASDAQ: AAL) has just released its fourth-quarter and full-year 2019 financial results, showcasing a solid performance that tickled the analysts' fancy. With an EPS of $0.95 per diluted share, the airline has reported an impressive earnings surprise, especially when we exclude net special items, which bumps the figure up to $1.15 per diluted share?a 19% increase year over year. Now that?s what I call a flight plan that took off!

Yearly Performance

For the entirety of 2019, American Airlines raked in an EPS of $3.79 per diluted share, and after adjusting for net special items, that figure rises to $4.90. This marks an 8% increase compared to 2018, and it seems the airline is cruising at a comfortable altitude. The EPS consensus among analysts may have set expectations high, but American Airlines has not only met them; it has soared right past.

Shareholder Returns and Profit Sharing

In a show of appreciation for its loyal shareholders, American Airlines returned a staggering $1.3 billion in dividends and share repurchases in 2019. As if that wasn?t sweet enough, the company accrued $213 million for its profit-sharing program, including a healthy $74 million in the fourth quarter. It appears that the airline is not just focused on flying high but also on keeping its investors happy?something that can be as elusive as a seat upgrade on a busy flight.

Looking Ahead

American Airlines Chairman and CEO Doug Parker expressed optimism about the future, stating, ?During the fourth quarter, we made important progress to address the issues that impacted our business in 2019.? As we look ahead to 2020, the airline is honing in on operational excellence, expanding in profitable hubs, and driving significant free cash flow. If they can pull this off, we might be looking at a smooth landing for their stock performance.

But let?s not forget that the aviation industry is notorious for turbulence. Challenges lie ahead, and while American Airlines has charted a promising course, it will need to navigate economic headwinds and evolving consumer preferences. The airline sector, after all, is as fickle as a middle seat on a packed flight.