AMR Gets Big Vote Of Confidence From Investors
Higher Revenues, Cost Controls
Helped Shares Double in 2005;
Bears See Debt-Payment Burden
When American Airlines' parent, AMR Corp., reported a $604 million loss for the fourth quarter, investors might have cringed. Instead, the stock rose 8% that day on the heels of a year in which it outperformed shares of all other major U.S. airlines, including continuously profitable Southwest Airlines.
How can an unprofitable airline make a highflying stock?
Fans of American cite the airline's solid cash position -- $4.3 billion at year's end -- which could give it more staying power than other recovering rivals. They are encouraged by rising fares and American's recent efforts to boost revenue, including selling last-minute upgrades to sit in first class. And they are optimistic about American's decision to keep trimming capacity, even as some competitors add flights.
Finally, American has been slashing its expenses, outside of fuel. Last year, such expenses fell for the fourth year in a row when measured by the cost to fly each seat one mile at mainline operations, which exclude regional affiliates.
During 2005, AMR's share price rose 101%, compared with Continental Airlines' rise of 53%, Southwest's rise of 2.2% and JetBlue Airways' increase of less than 1%. In the fourth quarter alone, AMR's stock price doubled, hitting more than $22 a share. It closed Friday in New York Stock Exchange composite trading at $24.96, up 37 cents, giving the carrier a market value of $4.12 billion.
Meanwhile, AMR's gargantuan losses continued. The $604 million net loss posted last month was deeper than that of a year earlier, though the latest results were dragged down by a big charge for grounding more than two dozen aircraft and turning over a Miami airport project to the city. Painfully high fuel costs of $1.59 billion weighed heavily on the quarter, rising 33% from a year earlier. And that sting will get worse, the airline expects. Chief Financial Officer James Beer said American's 2006 business model factors in an expected fuel price of $1.95 a gallon -- equivalent to $65-a-barrel crude oil -- up from $1.75 a gallon last year.
"Fuel is going to be the continuing wild card in terms of the overall financial performance of the company," Mr. Beer said.
Still, enthusiasm reigns. Craig Hall, one of AMR's largest individual investors, said he fully expects the stock price to rise further given American's dominance in a vital U.S. industry with limited foreign competition at home. "We still believe there's a long way to go on the upside, but the future will be significantly dependent on what happens with energy prices," said the Dallas-based investor known for his contrarian strategies. Even if oil prices do rise, Mr. Hall expects they eventually will fall, which is why he and his family hold on to the 12.4 million AMR shares they began amassing two years ago when prices were around $6.50.
Others are similarly enthusiastic. Though AMR's quarterly operating expenses of $5.4 billion, which excluded special items, were $72 million worse than what Merrill Lynch analyst Mike Linenberg expected, he is maintaining his expectation that the company will earn $1.15 a share. Among other things, he noted a "significant revenue improvement" -- up 13.8% to $5.2 billion for the quarter -- and cited the airline's first annual operating profit since 2000. Mr. Linenberg rates the stock a "buy" and doesn't own shares of AMR. His firm or affiliates expect to receive or seek compensation from AMR for investment-banking services within the next few months.
After the quarterly results, J.P. Morgan Chase & Co. analyst Jamie Baker raised his 2006 earnings-per-share estimate to $3 from $2.80, an increase he said was due in part to improved revenue at American's Eagle regional affiliate. Mr. Baker, who rates the stock "overweight," doesn't own shares in AMR. His firm has provided investment-banking services to the company in the past year.
Standard & Poor's Ratings Service said the losses didn't affect its stable outlook for AMR's bonds, though it expects the company to remain in the red this year.
The optimism underscores the irony of airline-stock investing. The airline industry is a low-margin business in good times that manages to lose staggering amounts of money in bad times. From 2001 through 2004, U.S. airlines posted $32.3 billion in cumulative net losses, according to the Air Transport Association. But the volatility of high-risk airline stocks means the valleys make the potential for peaks that much richer, investors say. American's stock traded as low as $8.26 in the past 52 weeks. Though it dropped some early this year, standing at $18.76 in mid-January, it has climbed back up.
Not everyone is bullish. Citigroup analyst Andrew Light, who rates AMR a "hold," said investors should consider lightening positions because "a substantial earnings recovery is already priced into AMR's share price." He expects the company to continue issuing new shares to rebuild equity on its balance sheet, a move that could put pressure on the share price and dilute earnings. Mr. Light doesn't own shares of AMR. His firm or its affiliates have received compensation from AMR for investment-banking services within the past year.
What's more, American is laden with $20 billion in mostly long-term debt, with interest payments this year topping $1 billion. It also faces stiff competition from airlines emerging from bankruptcy-court protection with leaner operations, such as UAL Corp.'s United Airlines.
On top of that, American's management is under fire from labor unions about an annual incentive plan tied to stock performance. Some 1,000 managers could be richly rewarded with more than $80 million or more in cash this April when payouts are determined based on the stock's three-year performance relative to competitors. Any labor tension could threaten executives' reliance on employees to find more ways to cut costs and boost revenue.
投资者继续看好AMR
美利坚航空公司(American Airlines)的母公司AMR Corp.第四财政季度出现了高达6.04亿美元的亏损,投资者本来应该倍感打击,但事实却正好相反,该股在连续一年领先其他美国大型航空类股之后,在业绩发布的当天再度上涨8%。而那些被它遥遥领先的同行中,甚至包括经营有方、持续盈利的美国西南航空公司(Southwest Airlines)。
一家根本不盈利的航空公司,它的股票价格怎么就能高高在上呢?
追捧美利坚航空公司的投资者认为,该公司现金充盈──年底时高达43亿美元──这就是比其他正在恢复中的同行更能够维持长期运营的稳固基石。美利坚航空上调票价,以及最近提振收入的种种措施都让投资者信心倍增。在航班起飞前最后一刻允许乘客加价升入头等舱就是这些最近举措之一。此外,美利坚航空决定不断收缩运力,哪怕有些同行纷纷扩大航班运力也不动摇,这也让投资者们感到乐观。
最后,除了燃油费用之外,美利坚航空一直在大力削减费用开支。用主营业务(即不包括地区性关联业务)每英里每座位飞行成本核算,去年美利坚航空的这类开支连续第四年下降。
纵观2005年全年,AMR股价累计飙升101%。相比之下,大陆航空(Continental Airlines)股价上涨53%,西南航空仅上涨区区2.2%,JetBlue Airways涨幅甚至不到1%。仅以第四季度为例,AMR股价就上涨了一倍,超过每股22美元。上周五纽约证交所收盘时,该股单日上涨37美分,收于24.96美元,公司市值41.2亿美元。
但与此同时,AMR的巨额亏损也持续上演。上个月公司的第四财季6.04一美元亏损超过了上年同期水平,不过这笔亏损中包括了20多架飞机退役以及将迈阿密机场转交当地而产生的大笔支出。高达15.9亿美元的燃油成本与上年同期相比激增33%,而且公司估计还会持续增长下去。公司首席财务长比尔(James Beer)表示,美利坚航空2006年业务规划当中,已经预估燃油价格从上年的每加仑1.75美元增至1.95美元──相当于每桶65美元。
“燃油仍将是公司整体财务表现所面临的最大变数,”比尔说。
不过,看涨气氛仍然占据了上风。AMR最大的个人股东之一豪尔(Craig Hall)表示,他坚信该股还会继续上涨,理由是美利坚航空在这个至关重要的行业里占据垄断地位,势力所及少有国外竞争对手。“我们还是相信前进的道路任重道远,但未来表现如何在很大程度上要取决于能源价格的走势,”以反向投资策略著称的豪尔说道。哪怕油价还会继续上涨,豪尔也坚信它终将下跌。这就是他和他的家族紧紧握住1,240万股AMR股票绝不出手的原因。两年前,AMR股价只有6.5美元左右的时候,他们曾大规模吸纳。
其他人的热情也毫不逊色。虽然AMR不包括特殊项目的季度营运费用高达54亿美元,较美林(Merrill Lynch)分析师林伯格(Mike Linenberg)的预期高出7,200万美元,他还是预计该公司每股收益可达1.15美元。他提到“收入显著改善”──增加13.8%至52亿美元──以及2000年以来首次出现年度营运利润。林伯格将该股评级定为买进,自己并不持有该股。美林及其附属机构期待著未来几个月能向AMR提供投资银行服务。
季度报告公布之后,摩根大通(J.P. Morgan Chase & Co.)分析师贝克(Jamie Baker)就将自己对AMR 2006年的每股收益预期从2.80美元升至3美元,将部分原因归结为美利坚航空的地区性关联公司Eagle收入改善。他将该股评级定为增持,并不持有该股。摩根大通去年曾向AMR提供投资银行服务。
标准普尔评级服务(Standard & Poor's Ratings Service)表示,巨额亏损并不影响自己对AMR债券前景稳定的评级,虽然预计AMR今年还会继续亏损。
这股乐观气氛彰显了美国航空类股投资圈子里的矛盾之处。航空业在年景好的时候还能实现一个较低的利润率,但在萧条时期只能勉强不出现巨额亏损。根据航空运输协会(Air Transport Association)的统计,2001-2004年期间,美国各大航空公司累计出现了323亿美元的净亏损。但投资者们认为,起伏动荡的高风险航空类股意味著逢低吸纳将在高峰时实现更可观的收益。过去的52周之内,AMR股价最低跌至8.26美元。随年在年初有所下滑,1月中旬在18.76美元前后徘徊,但已经大幅反弹。
当然并不是所有人都这么乐观。花旗集团(Citigroup)分析师莱特(Andrew Light)就将该股评级定为持有,建议投资者考虑减持,因为“其股价已经体现了收益显著增长的预期”。他认为,该公司还会继续增发新股,这会给股价和每股收益构成压力。莱特自己不持有该股。花旗集团及其附属机构曾在去年向AMR提供过投资银行服务。
此外,该公司还背负著200亿美元债务,大部分都是长期负债,今年的利息偿付预计就要超过10亿美元。另外,刚刚摆脱破产保护、更加精简灵活的业内同行,例如UAL Corp.旗下的美国联合航空公司(United Airlines),都会发起激烈的竞争。
何况,美利坚航空的管理层正在工会组织的攻击下频频招架,他们对一向与股价表现挂钩的年度奖励计划颇为不满。美利坚航空大约1,000名经理层职员将因这项计划在今年4月份拿到一个大大的红包──总额超过8,000万美元的现金,届时的具体奖励会根据三年内AMR股价相对于同行的表现而定。任何劳资纠纷都会损害管理层发动员工找到更多开源节流途径的努力。