American Airlines Group Inc. (NASDAQ: AAL) reported second-quarter 2016 earnings before markets opened Friday. The airline posted adjusted diluted earnings per share (EPS) of $2.81 on revenues of $10.36 billion. In the same period a year ago, the company reported EPS of $2.62 on revenues of $10.83 billion. Second-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.68 and $10.32 billion in revenues.
On a GAAP basis, American reported EPS of $1.68, compared with $2.41 in the year-ago quarter. The airline recognized $101 million net special charges in the quarter. Adjusted EPS excludes those items and a noncash tax benefit.
In the second quarter, the company returned $1.7 billion to shareholders through the payment of $58 million in quarterly dividends and the repurchase of $1.7 billion of common stock (50.2 million shares). American said it has returned about $8.4 billion to shareholders since initiating its capital return program in mid-2014.
Second-quarter revenue dipped 4.3% year over year, which the company attributed to a 1.9% increase in total available seat miles. Consolidated passenger revenue per available seat mile was 12.71 cents, down 6.3% compared with the second quarter of 2015. Consolidated passenger yield was 15.42 cents, down 5.3% year over year.
Chair and CEO Doug Parker said:
These strong second-quarter results are the result of the hard work by our people to improve every aspect of our airline. The more than 100,000 team members of American Airlines are doing an outstanding job of taking care of our customers. In addition, our recently announced AAdvantage credit card agreements show that the world’s largest airline network is a powerful draw for both our business partners and our customers.
American’s cost per available seat mile on its mainline flights decreased by 4.6% to 11.32 cents. Excluding fuel and special charges, mainline costs rose 4% to 9.12 cents per available seat mile.
The company did not provide guidance in its release but said it would provide details following its conference call scheduled for Friday morning at 8:30 a.m. ET. Consensus estimates call for third-quarter EPS of $1.51 and revenues of $1045 billion. For the full year, analysts are looking for EPS of $5.33 and $39.78 billion in revenue.
American’s shares closed at $35.92 on Thursday, in a 52-week range of $24.85 to $47.09. The stock traded up about 3.2% almost an hour after Friday’s opening bell at around $36.08. The consensus price target from Thomson Reuters was $41.04 before the announcement.
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