The FINANCIAL — American Airlines Group Inc. on October 20 reported its third quarter 2016 results. The Company’s third quarter highlights include:
Third quarter 2016 pre-tax profit of $1.2 billion, or $1.5 billion excluding special charges, and net profit of $737 million, or $933 million excluding special charges
Third quarter 2016 earnings per diluted share was $1.40 versus $2.49 for the same period last year. Third quarter 2016 adjusted1 earnings per diluted share was $2.80 versus $2.77 for the third quarter 2015
As part of its profit sharing plan, the Company accrued $86 million in the third quarter. This brings the year-to-date accrual for profit sharing to $257 million
Returned $669 million to stockholders through share repurchases and dividends in the third quarter
Successfully completed the Company’s largest IT cutover since the merger with no disruption to service
The Company reported a Generally Accepted Accounting Principles (GAAP) net profit of $737 million, or $1.40 per diluted share in the third quarter 2016. This compares to a GAAP net profit of $1.7 billion in the third quarter 2015, or $2.49 per diluted share. As a result of the reversal of the valuation allowance on the Company’s deferred tax assets as of December 31, 2015, the Company’s 2016 results include a $452 million provision for income taxes at an effective rate of approximately 38 percent, of which $449 million is non-cash due to net operating loss utilization. There was no tax provision for federal income taxes recorded in 2015, according to American Airlines.
The impact of the year-over-year change in non-cash income tax expense is removed by comparing pre-tax income. The Company reported a third quarter 2016 GAAP pre-tax income of $1.2 billion, and pre-tax income excluding net special charges of $1.5 billion. This compares to a third quarter 2015 GAAP pre-tax income of $1.7 billion, and pre-tax income excluding net special charges of $1.9 billion.
Adjusted third quarter 2016 earnings per diluted share was $2.80, up from $2.77 per diluted share in the third quarter of 2015.
“These outstanding results are due to the efforts of our more than 100,000 team members, who are working tirelessly to improve our operations, product, and customer experience,” said Doug Parker, Chairman and CEO. “Nowhere are these efforts more evident than through the seamless completion of our largest IT cutover yet, which combined our fleet and pilot groups onto one system, with no disruption to service. We’re already seeing the benefits as this cutover enables us to schedule our pilots and aircraft as one airline and allows us to further optimize our network to better meet the needs of our passengers.”
“With integration successes like this behind us, we are even more excited about the future. We are investing in our people and our product and are well along the path to restoring American as the greatest airline in the world.”
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