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EARNINGS

AMR Net Income Skids in 4th Quarter, Year

January 22, 1987

AMR Corp., parent of American Airlines, said its earnings fell 73.1% in the 1986 fourth quarter and 19.3% for the year.

The Dallas-based company attributed the declines partly to inflated 1985 earnings, caused by a pilots strike at competitor United Airlines in the summer of that year. AMR also said retroactive provisions of the new Tax Reform Act increased the company's tax bill by $38.9 million.

It said earnings in the three months ended Dec. 31 totaled $6.56 million, down from $24.4 million in the comparable 1985 period. Revenue was up 0.7% to $1.49 billion from $1.48 billion.

Fourth-quarter results would have fallen further without an $11.6-million reduction in pension expense due to accounting changes, a $10.5-million reduction in depreciation expense and a $14.8-million gain from the sale of property rights, according to figures in the company's financial statement.

For the year, AMR said earnings totaled $279.13 million, down from a record $345.84 million in 1985. Revenue totaled $6.01 billion, down from $6.13 billion.

Robert L. Crandall, AMR chairman and president, said revenue was affected by the sale of three company subsidiaries last year: caterer Flagship International, AMR Energy and American Airlines Training.

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