American Air 3Q Profit Beats, Buyback Announced

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American Airlines Group, the world's largest carrier, said on Friday its third-quarter profit jumped, beating analysts' expectations.

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American reported net income of $1.7 billion in the quarter, up 80 percent from a year ago as the price of oil has plummeted. It earned $1.9 billion, excluding charges, or $2.77 per diluted share. On that basis, the average analyst estimate was $2.72 per share, according to Thomson Reuters I/B/E/S.

The company said it would buy back another $2 billion of its stock.

Shares rose 3.8 percent to $47.75 in premarket trading, even as American reported that passenger unit revenue, or sales at the airline relative to the total mileage of the seats it flies, declined 6.8 percent from a year ago.

The earnings report comes about a week after American finished transferring thousands of customer reservations from the computer platform of subsidiary US Airways to the one used by American.

On Friday, the company said the reservations "cutover" was successful, reporting "no operational impact" in a process that had led to widespread delays at rival United Continental Holdings.

American and US Airways merged in 2013. On Oct. 17, the US Airways website and brand disappeared, with all the company's flights now operating as American Airlines.

The company said the pretax profit margin was 17.7 percent in the quarter, excluding special items, which was on the high end of its prior forecast of 17 percent to 18 percent.

The company said it will start another stock repurchase program to be completed by the end of 2016, with American authorizing a total of $6 billion in buybacks this year.

Sterne Agee CRT analyst Adam Hackel said he expects the "very positive" buyback announcements to continue into 2016.

The airline's passenger unit revenue has dropped for months as a strong U.S. dollar dented sales to foreign travelers and lowered the value of foreign sales in dollar terms.

A surge of flights by rivals in greater Dallas, American's hometown, has also outpaced demand and pressured fares in the United States. American said passenger unit revenue for domestic flights dropped 7.6 percent in the quarter versus a year earlier.

(Reporting by Jeffrey Dastin in New York; Editing by Bernadette Baum and Jeffrey Benkoe)

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