American Airlines reported a record fourth-quarter profit, but Wall Street investors were disappointed with the carrier’s unit revenues.
Shares of American dropped 5 percent Tuesday to $52.70.
American said its unit revenues, a key metric of an airline’s financial performance, declined 1 percent in the fourth quarter, partly due to increased competition from other airlines, including Southwest Airlines.
The Fort Worth-based carrier posted a profit of $597 million for the fourth quarter, a reversal from the $2 billion loss it reported last year when it emerged from bankruptcy. It said revenues grew 2.1 percent to $10.2 billion even though planes were slightly less full in the fourth quarter.
“This is the best year in the long, proud history of American Airlines and the best year by a long shot, more than double the prior record, and we’re extremely pleased to be reporting results like this just one year into our merger,” American Airlines CEO Doug Parker told Wall Street analysts on a conference call Tuesday.
For its first full year merged with US Airways, American said its profits were $2.8 billion with $42.6 billion in revenues. American and US Airways closed the merger in December 2013.
With declining oil prices, American said it paid $2.52 per gallon of jet fuel, a decrease of 17.5 percent. CFO Derek Kerr told Wall Street analysts those fuel-cost savings could translate to $5 billion a year.
Excluding one-time accounting charges, American reported a fourth-quarter profit of $1.1 billion, or $1.52 a share, beating Wall Street analysts’ earnings estimates of $1.51 per share, according to FactSet Research.
The company announced it will pay a dividend of 10 cents per share to shareholders of record as of Feb. 9. Its board has also authorized an additional $2 billion for a share-repurchase plan, as American has already completed a $1 billion repurchase program.