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US Airways Group, Inc. Message Board

  • wgrsh wgrsh Feb 7, 2013 1:49 PM Flag

    Implications of 25/75 split

    Just using round numbers ... Forward estimates put LCC making $600+ million with their $14-15 billion in revenue.

    If AMR gets 75%, that implies they should make $1.8+ billion with their $24 billion in revenue. (They only need $8 billion in revenue to produce the earnings that LCC produces with $14-15 billion in revenues.) DAL has trouble making $1.8 billion with $37 billion in revenue, but we are to believe AMR can make that much?

    Well if AMR does make that much, then LCC's earnings estimates will be unchanged ... and why would the stock go higher? If AMR contributes less than $1.8 billion in profits ... the stock price drops.

    This is actually getting ridiculous.

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