AMR, Continental report record losses for fourth quarter
Thursday, January 17th 2002, 12:00 am
By: News On 6
DALLAS (AP) _ The parent of American Airlines posted a record dlrs 798 million loss in the fourth quarter and Continental Airlines lost dlrs 149 million in the same period as carriers felt the brunt of the recession and Sept. 11 terrorist attacks.
But both American, the world's largest carrier, and Continental reported smaller operating losses than Wall Street had expected, and investors bid up the price of their shares.
American's parent, Fort Worth, Texas-based AMR Corp., said a downturn in business travel and lower fares contributed to its loss of dlrs 5.17 per share for the October-December period. It earned dlrs 47 million, or 29 cents a share, a year earlier,
Excluding federal aid after the terrorist attacks and other special items _ such as charges for idling planes _ AMR lost dlrs 734 million, or dlrs 4.75 per share. On that basis, analysts surveyed by Thomson Financial/First Call had expected the carrier to lose dlrs 5.08 per share.
Revenue tumbled to dlrs 3.8 billion for the quarter from dlrs 4.86 billion a year ago.
The Fort Worth-based company may have also been hurt by the Nov. 12 crash of one of its planes in New York, which killed 265 people.
Then in December, a man with a bomb in his sneakers was taken off an American flight from Paris to Miami. American chief financial officer Thomas Horton said the incident drove some passengers to other carriers for a time.
AMR cut 20,000 jobs and eliminated about 20 percent of its flights to save money, but it was still burning through about dlrs 6 million a day in December, Horton said. He said the carrier might start generating cash this summer.
``Clearly, the first quarter is going to be a loss for us and the rest of the industry, and probably a substantial loss,'' Horton said.
For the year, AMR lost dlrs 1.76 billion, or dlrs 11.43 per share, compared to earnings of dlrs 813 million, or dlrs 5.03 per share, a year ago. Revenue fell to dlrs 18.96 billion from dlrs 19.7 billion.
But traffic has slowly increased, and in December, American recalled 800 reservations clerks and canceled plans to lay off another 200 pilots.
Houston-based Continental's dlrs 149 million net loss amounted to dlrs 2.58 per share for the three months ended Dec. 31. A year ago, the airline earned dlrs 44 million, or 70 cents per share.
Excluding dlrs 174 million in pre-tax federal aid and one-time charges, the loss would have been dlrs 220 million, or dlrs 3.81 per share. Analysts had expected an operating loss of dlrs 4.49 per share.
Revenue fell 28 percent to dlrs 1.74 billion from dlrs 2.43 billion a year ago.
For the full year, Continental lost dlrs 95 million, or dlrs 1.72 per share, in contrast to a profit of dlrs 342 million, or 5.45 a share. a year ago. Revenue fell to dlrs 8.48 billion from dlrs 9.31 billion a year ago.
Chairman and chief executive Gordon Bethune said Continental does not expect more layoffs on top of the 8,000 since Sept. 11.
Bethune said that as bad as Continental's problems are, United Airlines and US Airways are in worse shape _ he questioned whether the two, which have higher labor costs, could survive.
Brian Harris, an analyst with Salomon Smith Barney, said both American and Continental did a better-than-expected job at cutting costs after Sept. 11 and that American also exceeded revenue predictions.