American Airlines Lowers 2015 Guidance, but Why?
Lower capacity guidance In its latest update, American Airlines (AAL) lowered its full-year overall system capacity growth outlook by approximately 1%. The company estimates its full-year domestic capacity growth will be…
The North American airline majors such as Delta Air Lines and American Airlines are locked in a dispute over market access with the major Gulf carriers such as Qatar and Etihad Airways.
American Airlines took advantage of lower interest rates due to its improved credit ratings to refinance each of its secured term-loan facilities at lower interest rates.
American Airlines (AAL) stock was listed on the market after it completed its merger in December 2013. The stock has generated about 50% returns since then.
American Airlines experienced a large decline in passenger unit revenues. Yet at the same time, it derived enormous fuel-cost benefits thanks to its no-fuel-hedging policy.
American Airlines announced its quarterly results on July 24, 2015. Positive expectations saw the stock open about 2% higher at $43.08. And the company reported its best-ever quarterly profits.
The EIA published its latest report on capacity factors for power plants on July 27. Coal-based power plants surpassed natural gas-based power plants in utilization.
In its July 27 report, the EIA published data regarding coal inventories with utilities at the end of May 2015. Utilities benefited from low coal prices.
After losing the top spot to natural gas in April 2015, coal regained its leadership position as a fuel in electricity generation by a narrow margin.
Since the ’80s and ’90s, Latin American banks have stabilized. Today, the largest banks in Latin America are concentrated in two countries: Brazil and Mexico.
The Brazilian banking industry had an average return on equity (ROE) of 13.2% in 2013, falling far below its pre-crisis levels, when it exceeded 15%.
As of 2Q15, Brazil’s total credit outstanding was 3.08 trillion real. Of this, ~55% comes from public financial institutions and 45% from private banks.
The Brazilian banking system is highly consolidated as a result of significant M&A activity. The six leading banks in the country account for 80% of the overall bank assets.
During a conference call to announce its 2Q15 earnings, Google’s management mentioned that watch time on YouTube has grown by 60%.
Newmont’s outperformance is mainly due to the strengthening of Newmont’s balance sheet as a result of non-core asset sales and unit cost reduction.
Newmont Mining’s (NEM) stated strategy is portfolio optimization. It’s disposing of high-cost, non-core assets and acquiring low-cost assets with long mine lives in safer jurisdictions.
Newmont Mining (NEM) faces challenges in Indonesia. It’s working with the Indonesian government to effect modifications to its contract of work and renew its export permit.
Newmont Mining’s (NEM) project pipeline remains one of the strongest among its peer group. Its three main projects are running concurrently and on schedule.
Prepaying debt and strengthening its balance sheet is Newmont Mining’s (NEM) top priority. It plans to repay $750 million in 2015.
Newmont is focusing on a lower cost outlook. Its overall cost guidance for full year 2015 has been lowered by 4%, from $960–$1,020 per ounce to $920–$980 per ounce.
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