Southwest Airlines Flight 1117 from St. Louis lands at Boston Logan International Airport on March 13, 2019. (Photo by John Tlumacki / The Boston Globe via Getty Images)
John Tlumacki | The Boston Globe | Getty Images
American Airlines posted record quarterly losses on Thursday and faces difficult months as new travel restrictions and slow vaccine adoption hope for a near-term recovery.
American posted a net loss of $ 2.2 billion in the fourth quarter. Revenue decreased more than 64% to $ 4.03 billion, compared to $ 11.3 billion a year ago. Revenue was $ 3.88 billion for the quarter, above analysts' forecasts. Shares were up 30% in premarket trading, while retailers in stocks with large shorts bought at breakneck speed. American has much less interest in its stocks than any other US carrier.
The airline expects capacity to decrease 45% in the first quarter of 2021 compared to 2019 before the coronavirus pandemic weighed on demand for travel. For the first quarter, sales are expected to decline by 60% to 65% compared to the previous months of 2019.
Here's how American performed compared to Wall Street's expectations in the fourth quarter, based on Refinitiv's average estimates:
Adjusted earnings per share: a loss of $ 3.86 versus an expected loss of $ 4.11. Revenue: $ 4.03 billion versus expected $ 3.88 billion in revenue.
On the previous Thursday, Southwest Airlines reported its first annual loss since 1972, saying that capacity would remain conservative through March as demand was weak.
Southwest expects an average core cash burn of around US $ 17 million per day for the first quarter, "due to persistent weak demand and a seasonally weaker travel period in January and February 2021, as well as rising fuel prices." That's more than the $ 12 million a day for the last three months of 2020.
Sales are forecast to decrease 65% to 70% in January compared to 2019, slightly better than a 75% decrease previously forecast after cancellations stabilized. Southwest said February revenue is projected to decrease 65% to 75% compared to the same month of 2019.
The share price rose 3% on the Thursday before the market.