AMR Swings to Q1 Profit

| About: American Airlines (AAL)

American Airlines parent AMR Corp. posted a Q1 profit yesterday, reversing a year-ago loss, in part on higher demand for international routes. This is the first time since 2000 the company has shown a profit in traditionally weak Q1. Net income grew to $81 million ($0.30/share), in line with analyst expectations. The company posted a $92 million loss (-$0.49/share) in the same quarter last year. Revenue was up 1.6% in the quarter to $5.48 billion from $5.34 billion, ahead of Street expectations of $5.46 billion. The load factor -- or percentage of filled seats -- rose to a company record of 78.1% from 77.2%. The yield, or average fare per mile, was up 3.3%, its eighth straight quarterly y-o-y increase. AMR shares gained 3.7% to close at $31.96. In related news, members of American's flight attendants' union picketed across the country to protest a compensation plan that rewards managers for stock-price performance. The company will reportedly distribute $170 million to 900 managers. "It took 80,000 American employees to save our company from bankruptcy in 2003," said Tommie L. Hutto-Blake, president of the union. "[We] will not go quietly when injustice of this magnitude is done to loyal and hardworking employees."

Sources: Wall Street Journal, Forbes, Bloomberg, MarketWatch
Commentary: Positive Traffic Reports and Lower Oil Prices Boost Airline StocksGoldman Sachs, British Airways Eye AMR Corp. -- Business WeekCrude's Fall Boosted Airline Stocks
Stocks/ETFs to watch: AMR Corp. (AMR). Competitors: Delta Air Lines Inc. (DALRQ.PK), Northwest Airlines Corp. (NWACQ.PK), UAL Corp. (UAUA). ETFs: SPDR DJ Wilshire Mid Cap Value (EMV), SPDR DJ Wilshire Mid Cap (EMM)

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