American Airlines' Q4 Bottom-Line Beats Street View; Prioritizes Profitability & Debt Reduction

American Airlines Group Inc AAL reported fourth-quarter FY22 operating revenue growth of 40% year-on-year to $13.18 billion, slightly missing the consensus of $13.20 billion.
American's Q4 revenues increased 16.6% versus the same period in 2019 and represent the highest Q4 revenue in company history, driven by the continued strength of the demand environment.
Passenger revenues rose 44.7% Y/Y to $12.13 billion, and cargo revenues declined 22.9% to $263 million.
Adjusted EPS of $1.17 beat the consensus of $1.14.
The airlines reported an operating income of $1.38 billion, compared to a loss of $(780) million a year ago, and the operating margin was 10.5%.
Total operating expenses grew by 15.7% Y/Y to $11.8 billion.
Passenger load factor was 83.9%, up from 80.2% in 4Q21. Revenue passenger miles increased 12.9% Y/Y, and ASM increased 7.9% Y/Y.
Also Read: What's Going On With American Airlines Stock?
Average aircraft fuel price per gallon, including related taxes, was $3.50 vs. $2.36 in 4Q21.
American Airlines' net cash provided by operating activities for FY22 totaled $2.17 billion, compared to $704 million a year ago.
American Airlines ended the quarter with $586 million in cash and equivalents and ended the year with $12 billion of available liquidity.
The company said total debt reduction continues to be a top priority, and it is more than halfway to its goal of reducing total debt by $15 billion by the end of 2025.
Guidance: American Airlines sees FY23 Adjusted EPS of $2.50 - $3.50 and FY23 ASM growth of 5% to 8%.
It expects Q1 FY23 Adjusted EPS to breakeven and ASM growth of 8% to 10%
Price Action: AAL shares traded higher by 1.91% at $16.57 on the last check Thursday.
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