American Airlines profit tops Wall Street targets

American Airlines reported fourth-quarter earnings that topped Wall Street estimates, sending shares higher.

Ticker	Security	Last	Change	Change %
AAL	AMERICAN AIRLINES GROUP INC.	14.64	-0.28	-1.88%

The Fort Worth-based airline’s profit surged 27 percent from a year earlier to $414 million on revenue of $11.3 billion. Adjusted earnings of $1.15 per share were above the $1.14 that analysts surveyed by Refinitiv were expecting.

American has 24 Boeing 737 Max aircraft in its fleet and an additional 76 on order. The airline canceled about 10,000 flights at the end of 2019 as a result of the aircraft's March grounding, which came after two deadly crashes killed 346 passengers. Its total revenue per available seat mile, an industry gauge of profitability, rose 0.5 percent from the year prior.

American “made important progress to address the issues that impacted our business in 2019,” CEO Doug Parker said in a statement. “While our results for the quarter reflect this progress, we know there is more work to be done.”

Looking ahead, American expects its pre-tax profit margin for the first three months of this year to be flat compared with the same period in 2019, with full-year earnings of $4 to $6 a share. Last week, the airline pulled the 737 Max from its schedule until at least June 4.

On the company's earnings call on Thursday, Parker said the "financial cost of the Max grounding should be borne by Boeing shareholders not Americans."

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American Airlines shares fell 4.7 percent this year through Wednesday, trailing the S&P 500's 2.8 percent gain.

This story has been modified to reflect updated consensus estimates