American Airlines profit halves on higher fuel costs

[October 25, 2018]  (Reuters) - American Airlines <AAL.O> quarterly profit nearly halved on Thursday, hurt by higher fuel costs and the impact of Hurricane Florence that forced it to cancel about 2,100 flights in September.

The company said it would cut capacity, cancel loss-making routes and delay taking delivery of new aircraft to cut costs, but stuck to its full-year profit forecast of $4.50 to $5.00 per share.

Shares of the company rose 4 percent in volatile trading before the bell.

The fuel cost for the No. 1 U.S. carrier by passenger traffic rose 42 percent during the quarter. Worries about its impact on margins have hurt shares of American and rivals, including Delta and Southwest. American Airline shares have fallen 42 percent this year.

Adding to the woes, Hurricane Florence slammed North and South Carolina in mid-September, impacting several businesses and forcing airline, delivery, auto and steel companies to shut operations.

The company's net income fell $341 million, or 74 cents per share, in third quarter ended Sept.30 compared with $661 million, or $1.36 per share, a year earlier.

On an adjusted basis, the airlines earned $1.13 per share, in line with expectations. Operating revenue rose 3.7 percent to $11.64 billion.

Unit revenue, a closely watched performance measure that compares sales to flight capacity, rose 2.6 percent. For the fourth quarter, the airlines expects unit revenue to rise 1.5 to 3.5 percent.

(Reporting by Rachit Vats in Bengaluru and Tracy Rucinski in Chicago; Editing by Arun Koyyur)

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