On Thursday, American Airlines Group Inc. (NASDAQ: AAL) announced its financial results for the fourth quarter of 2017, with revenue in line with estimate and earnings beating estimates. However, shares of the company dropped 3.1% to $53.07 per share in late-morning trading today after the announcement of the airline that it would add seats to the market over the next three years, which would further lead to higher costs and possible fare war.
For the fourth quarter, revenue increased from $9.8 billion for the same period last year to $10.6 billion, which was in line with expectations. The airline’s net income dropped around 11% to $258 million, or $0.54 per share for the fourth quarter. Excluding certain items, earnings per share for the company was $0.95 per share, which surpassed analysts’ estimates of $0.92 per share.
The company also provided guidance for the first quarter of fiscal 2018 in the statement. For the first quarter of 2018, the airline expected its pre-tax margin excluding special items to be to be in the range of 2% to 4%. Additionally, diluted earnings per share for fiscal 2018 is expected to be between $5.50 and $6.50, according to the airline.
“2017 was a remarkable year for American Airlines. We made enormous progress as a company as we continued to make significant investments in our team members, product and operation, and those investments are beginning to pay off,” Doug Parker, the Chairman and CEO of the airline, said in the statement on Thursday.
“We enter 2018 with strong momentum. Demand for American’s reliable, friendly service remains strong, our network is expanding, and the products we are bringing to market are resonating with customers,” Doug continued.