These numbers represent the fourth quarter results and can be found on the 8-K SEC filing. Fourth quarter 2016 pre-tax profit was $500 million, or $773 million excluding net special charges. Also, total revenue per available seat mile was up 1.3 percent year-over-year, which is the first year this has happened since the fourth quarter of 2014. As a potential investor, the idea that consecutive growth is happening shows the company still has the ability to grow and maintain profitability.
Now, let us switch over to the chart and see if price is reacting in a health way. Taking a look at the monthly chart, you can see there is not a whole bunch of historical data, but from what we can tell is that price is in a range and appears to be going back to the downside. For a short position, this could be great, but we’re here for long term growth and want the company’s stock price to rise. Right now, I would wait for the price to catch some support and be sure to watch the latest numbers because that will influence price direction.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include American Airlines income statement, its balance sheet, and the statement of cash flows. Potential American Airlines investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although American Airlines investors may use each financial statement separately, they are all related. The changes in American Airlines's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on American Airlines's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of American Airlines
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of American Airlines performance into the future periods or doing a reasonable stock valuation. The intrinsic value of American Airlines shares is the value that is considered the true value of the share. If
the intrinsic value of American is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares American Airlines. Please read more on our
fundamental analysis page.
How effective is American Airlines in utilizing its assets?
American Airlines Group reports assets on its Balance Sheet. It represents the amount of American resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, American Airlines aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Passenger Airlines space. To get a better handle on how balance sheet or income statements item affect American volatility, please check the breakdown of all its
fundamentals.
Are American Airlines Earnings Expected to grow?
The
future earnings power of American Airlines involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of American Airlines factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. American Airlines
stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of American
expected earnings.
American Airlines Gross Profit
American Airlines Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing American Airlines previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show American Airlines Gross Profit growth over the last 10 years. Please check American Airlines'
gross profit and other
fundamental indicators for more details.
Breaking down American Airlines Indicators
Risks
There are certain risks that are unique to the airline industry, and you can take a look at the most recent 10-K filing for a full list, but here a few to watch out for. One the company cites is that the airline industry is intensely competitive and dynamic, which means even the slightest errors can cause an upset in the businesses numbers. Not only that, the reliance on fuel certainly has an affect on ticket prices because of the changing price in fuel. This is certainly something to watch because if costs can’t be maintained and it trickles down to the consumer, that will cause people to shop elsewhere.
Conclusion
I think an airline industry is good to have in any portfolio, but with anything, be sure to have it in the right proportions. Also, take the time to compare the different airline industries and determine which has the best value. If you still have questions, consult an investing professional as they can help point you in the right direction.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of American Airlines Group. Please refer to our
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