American Airlines earns $700 million, beats forecasts
FORT WORTH, Texas - American Airlines (AAL) first-quarter earnings tumbled 25 percent, largely due to a provision for income taxes.
The $700 million in profit from the world's biggest airline still beat Wall Street expectations.
American Airlines Group Inc. benefited from another drop in fuel spending, but labor costs increased and weaker fares cut into revenue.
The earned $932 million a year earlier.
Earnings, excluding one-time gains and costs, mostly from its 2013 merger with US Airways, were $1.25 per share. That topped the average forecast of $1.18 per share among eight analysts surveyed by Zacks Investment Research.
Net income was trimmed after American made a $417 million provision for income taxes. Last year the company set aside just $11 million for income taxes because of heavy losses that it carried over from previous years.
Revenue fell 4 percent to $9.44 billion.
The average fare per mile fell 7 percent as American lowered some prices to compete with discount carriers like Spirit Airlines.
American and its American Eagle affiliates spent 33 percent less on fuel than they did a year ago, a savings of $607 million. But American's labor costs rose 12 percent, or $279 million, as it raised pay for employees.
Shares of American Airlines, based in Fort Worth, Texas, rose slightly before the opening bell Friday.