US Airways Group Posts a Surprise Profit

Seth Jayson, The Motley Fool
Updated

US Airways Group (NYS: LCC) reported earnings on Jan. 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), US Airways Group met expectations on revenues.

Compared to the prior-year quarter, revenue increased, and earnings per share shrank significantly. The profit was a surprise, as analysts had predicted a loss.

Gross margins expanded, operating margins contracted, net margins dropped.

Revenue details
US Airways Group booked revenue of $3.2 billion. The 10 analysts polled by S&P Capital IQ predicted revenue of $3.1 billion. Sales were 8.5% higher than the prior-year quarter's $2.9 billion

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.13. The 13 earnings estimates compiled by S&P Capital IQ averaged -$0.04 per share on the same basis. GAAP EPS of $0.11 for Q4 were 33% lower than the prior-year quarter's $0.16 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 34.1%, 1,480 basis points better than the prior-year quarter. Operating margin was 3.5%, 30 basis points worse than the prior-year quarter. Net margin was 0.6%, 30 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $3.1 billion. On the bottom line, the average EPS estimate is -$0.48.

Next year's average estimate for revenue is $13.6 billion. The average EPS estimate is $1.63.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 450 members out of 770 rating the stock outperform, and 321 members rating it underperform. Among 186 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 94 give US Airways Group a green thumbs-up, and 92 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on US Airways Group is outperform, with an average price target of $10.38.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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