AMR Reports Wider Than Expected Loss for Q3

AMR Corporation (NYSE: AMR), the parent company of American Airlines, today reported wider than expected loss for the third quarter of 2011.

AMR shares plunged following the release of weaker than expected third-quarter financial results. The stock closed 7.45% lower at $2.61. AMR shares are down more than 66% this year.

AMR, which is the third-largest U.S. airline, reported a loss in the third quarter due to rising fuel costs and a strong dollar. The airline said that its fuel costs climbed 40% in the third quarter. It also suffered from a steep rise in the value of dollar. AMR also suffered a loss in the value of some its fuel hedges after WTI crude oil prices dropped while jet fuel prices remained high.

The Fort Worth, Texas-based airline reported a loss of $162 million, or $0.48 per share for the third quarter of 2011. This compares with a profit of $143 million, or $0.39 per share reported for the same period in the previous year. Analysts were expecting the struggling airline to report a loss of $0.41 per share for the third quarter of 2011.

AMR’s revenue for the third quarter of 2011 came in at $6.4 billion, in-line with Street estimates. The airline ended the quarter with $4.8 billion in cash and short-term investments.

The weak results from AMR come at a time when the airline industry is preparing itself for an economic downturn. Although worries about a double-dip recession have eased, the airline industry is still expected to face a tough few months.

AMR has already announced some service reductions to offset the weaker demand. Earlier this month, the airline announced that it would cut its fall and winter flying to lower fourth-quarter capacity by around 3%.

AMR has also been trying to reach a labor contract with the union representing its pilots. AMR has struggled in the last few years due to higher labor costs.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.