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- Nov 4, 2003
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AMR says quarterly revenue will rise, but so will costsBy TREBOR BANSTETTERSTAR-TELEGRAM STAFF WRITERFORT WORTH -
AMR Corp., parent of American Airlines, said Thursday that its fourth-quarter revenue will exceed last year's, but costs are also likely to be higher than expected.
The mixed news, reported in a filing with the Securities and Exchange Commission, spurred one airline analyst to raise his forecast of AMR's fourth-quarter loss because of higher costs, while another decreased his loss prediction because of the revenue gains.
Executives with AMR, based in Fort Worth, reported that per-seat revenue for the quarter should be up between 13 percent and 14 percent compared with the fourth quarter of 2004.
They also said the airline will have $3.5 billion in unrestricted cash on hand at the end of the year.
But costs will be higher than expected, they added, even when excluding the price of jet fuel.
The higher costs come from insurance expenses, write-offs related to ground equipment and accounting for future management bonuses tied to the airline's rising stock price.
The bonuses cover midlevel and higher managers under a 1998 long-term incentive plan.
That program's benefits depend on the price of AMR's stock. Shares have soared nearly 90 percent during the quarter.
That means the company must increase its estimate of what it will pay out under the plan, spokeswoman Lisa Bailey said.
Jamie Baker, an airline analyst for J.P. Morgan Securities, said in an investment report Thursday that the filing "suggests a slightly softer-than-anticipated result" for the quarter.
He revised his forecast to a $2.45 loss per share of common stock, up from $1.99 per share.
But analyst Ray Neidl of Calyon Securities improved his outlook on the report.
Citing the revenue improvements, he estimated Thursday that AMR will lose $2.56 per share, compared with his previous forecast of $2.82 per share.
The two analysts also diverged on where the airline's stock is heading.
"We believe that the stock price is fully valued, especially going into the slow winter season," Neidl wrote in a report to investors. "We may see a temporary downward adjustment."
Baker, however, said that "AMR is cheap," adding that in his opinion the airline industry has finally turned the corner to recovery and AMR is a good deal for investors.
AMR shares (ticker: AMR) rose Thursday, closing at $22.20 per share, up 75 cents, or 3.5 percent.
******END OF ATRICLE ******
To Save Time and Reading Effort,
The TYPICAL Transport Worker Union Stooge response is posted below....
We are better off giving away more pay and benefits to save jobs.
We are better off not being allowed to obtain ratification ballots on changes to our labor agreement. We must be saved from ourselves.
We are better off allowing Airline Corporate Exec's play us against each other in a race to lower labor cost instead of being united into one union.
We are better off providing $500 million in productivity improvements via pajama parties without any written guarantees of more food on our table.
We are better off partnering with recipients of the hidden Retention Bonuses that were exposed only after vote tabulated.
We are better off giving our ideas on dollar savings for free rather than be compensated for those via a suggestion or ideas program.
We are better off wearing t-shirts with slogans than to really stand together against the rich attacks on the middle class.
We are better off to fear being replaced so that we do not have to take a stand against a dismal record of 20 plus years of concessions.
We are better off not to speak out against failures of the current organized labor leadership than to be called a loud mouth that will ruin our measley paychecks and paid time off.
We are better to never see the big picture and simply be told to tow the union part line than to question anything that is currently happening within the profession.
Yep, stooges win, we are far better off this way.
We are just plain lucky to have a job brother.
AMR Corp., parent of American Airlines, said Thursday that its fourth-quarter revenue will exceed last year's, but costs are also likely to be higher than expected.
The mixed news, reported in a filing with the Securities and Exchange Commission, spurred one airline analyst to raise his forecast of AMR's fourth-quarter loss because of higher costs, while another decreased his loss prediction because of the revenue gains.
Executives with AMR, based in Fort Worth, reported that per-seat revenue for the quarter should be up between 13 percent and 14 percent compared with the fourth quarter of 2004.
They also said the airline will have $3.5 billion in unrestricted cash on hand at the end of the year.
But costs will be higher than expected, they added, even when excluding the price of jet fuel.
The higher costs come from insurance expenses, write-offs related to ground equipment and accounting for future management bonuses tied to the airline's rising stock price.
The bonuses cover midlevel and higher managers under a 1998 long-term incentive plan.
That program's benefits depend on the price of AMR's stock. Shares have soared nearly 90 percent during the quarter.
That means the company must increase its estimate of what it will pay out under the plan, spokeswoman Lisa Bailey said.
Jamie Baker, an airline analyst for J.P. Morgan Securities, said in an investment report Thursday that the filing "suggests a slightly softer-than-anticipated result" for the quarter.
He revised his forecast to a $2.45 loss per share of common stock, up from $1.99 per share.
But analyst Ray Neidl of Calyon Securities improved his outlook on the report.
Citing the revenue improvements, he estimated Thursday that AMR will lose $2.56 per share, compared with his previous forecast of $2.82 per share.
The two analysts also diverged on where the airline's stock is heading.
"We believe that the stock price is fully valued, especially going into the slow winter season," Neidl wrote in a report to investors. "We may see a temporary downward adjustment."
Baker, however, said that "AMR is cheap," adding that in his opinion the airline industry has finally turned the corner to recovery and AMR is a good deal for investors.
AMR shares (ticker: AMR) rose Thursday, closing at $22.20 per share, up 75 cents, or 3.5 percent.
******END OF ATRICLE ******
To Save Time and Reading Effort,
The TYPICAL Transport Worker Union Stooge response is posted below....
We are better off giving away more pay and benefits to save jobs.
We are better off not being allowed to obtain ratification ballots on changes to our labor agreement. We must be saved from ourselves.
We are better off allowing Airline Corporate Exec's play us against each other in a race to lower labor cost instead of being united into one union.
We are better off providing $500 million in productivity improvements via pajama parties without any written guarantees of more food on our table.
We are better off partnering with recipients of the hidden Retention Bonuses that were exposed only after vote tabulated.
We are better off giving our ideas on dollar savings for free rather than be compensated for those via a suggestion or ideas program.
We are better off wearing t-shirts with slogans than to really stand together against the rich attacks on the middle class.
We are better off to fear being replaced so that we do not have to take a stand against a dismal record of 20 plus years of concessions.
We are better off not to speak out against failures of the current organized labor leadership than to be called a loud mouth that will ruin our measley paychecks and paid time off.
We are better to never see the big picture and simply be told to tow the union part line than to question anything that is currently happening within the profession.
Yep, stooges win, we are far better off this way.
We are just plain lucky to have a job brother.
