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American Airlines upgraded after 4Q shows gains

January 29, 2014

NEW YORK (AP) Shares of American Airlines rose Wednesday after the airline's latest quarterly results showed revenue trends improving and beat Wall Street's predictions. A Raymond James analyst upgraded American, citing that better direction and overall strength in the industry. Raymond James analyst Savanthi Syth raised the shares to "Outperform" from "Market Perform" and predicted that the company will earn $4.15 per share this year, up from an earlier forecast of $2.95 per share. Syth cited American's gains in revenue for every seat flown one mile, a closely watched measure in the airline business, plus expected increases in revenue from extra fees and lower fuel expenses. But she expressed concern about American's plans to increase capacity by 3.5 percent this year. Airlines have raised average fares by limiting capacity. Another analyst, J.P. Morgan's Jamie Baker , also raised his forecast for 2014 earnings, to $5 per share from $4.08 per share. He lifted his 2015 prediction too. Fort Worth, Texas -based American reported Tuesday that excluding restructuring costs related to its bankruptcy reorganization and last month's merger with US Airways , it would have earned $436 million , or 59 cents per share, in the fourth quarter. That beat analysts' forecast by 4 cents per share, according to a FactSet survey. Including the restructuring charges and other one-time items, American reported a loss of $2 billion , but analysts usually exclude items from their calculations. Combined revenue was $9.98 billion , which beat analysts' forecast by about $90 million . Shares of American Airlines Group Inc. rose 98 cents , or 3.1 percent, to $32.94 in morning trading. They had gained 5.9 percent on Tuesday.

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Source: Associated Press

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