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US Airways Group, Inc. Message Board

  • janasbud janasbud Jul 6, 2013 6:32 PM Flag

    Merrill yo-yo

    Engel said the closed end bookings turned this month: business and travel agencies had a decisive turn in bookings in June. Raised qtr eps to 1.53 from 1.45, 2013 full year to 3.05 from 2.70, and 2014 to 2.50 from 2.30 (after tax numbers). Acknowledges LCC outperforming as stand alone, but ML forecasts AMR will miss 2013 EBITDAR company forecasts by billon and street consensus by half billion. Engel forecasts 3.03 billion EBITDAR for AMR in 2013. Says AMR dragging down the price now as merger is built into pps.

    Sentiment: Buy

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    • I couldn't agree more. The merger will have a negative affect for the LCC shareholders, and the growth rate for the combined companies will be much lower than LCC as a stand alone. The LCC shareholders will not get enough of the pie (23/28%). I know my vote against the merger won't mean anything, but I will continue to hold my shares even though the merger terms are holding down the price. I have commented for several months that, IMO LCC would be above $20 without a merger given the current outstanding fundamentals.

      Sentiment: Hold

      • 3 Replies to investech77
      • bump....

      • investech ... certainly understand your feelings as we discussed before, but consider what's needed for the merged company to do better than LCC's standalone eps. I realize that the synergies are back ended towards 2015, but if the synergies are realized, after tax that is at least a buck a share. LCC next year is forecast to make $2.50 after tax. With synergies the merged companies only have to make $1.50 after tax to match LCC's standalone eps. Can the AMR side contribute $800 million pre-tax? I'd say so, and probably much more. Regardless, (and you can mix various amounts of synergies and what AMR contributes) it comes out to more eps than LCC' standalone eps. And I would say there is a better chance than not that the merged company matches, or beats LCC's standalone eps not counting the synergies.

        First approval/disapproval comes Friday.

      • Stroxkholders would be far better off but not dougie and his select group.

        Sentiment: Strong Sell

    • Does Engel bat at least .500? ... This sounds like he is quickly reversing a recent call on LCC. At least he isn't saying it was his negative call on LCC that is holding it down ... blaming it on AMR ... ah ... so it is his call either way.

      Does he know what he is doing with AMR as well (bad) as he was doing with LCC a few weeks ago? It seems he should have had a handle on AMR a few weeks ago if they were going to miss by a billion ... what new happened for AMR in a few weeks to make a billion disappear? (That $4 billion EBITAR had a lot of asterisks. And I'm not well versed in BK accounting but I think there are expenses that are possibly reversed upon exit.) Or does he just want to keep the negativity there? If he is right, who knows, maybe the smart money shareholders will vote no. And I know you are just the messenger ... and thanks for the info.

      LCC forecasts pre-tax earnings in 2014 as $23 million less than 2013 ... about 7 cents less eps.

      • 1 Reply to wgrsh
      • I didn't post the AMR numbers on his last call, but he said there would be a significant shortfall in earnings. IMO engel like Cramer has been a show me guy and his calls have lagged the stock price. IOW a typical analyst.

        Posted info because he is one of the analysts that go into the yahoo consensus. His analysis may be typical of most analysts and the reason the pps has lagged lately.

    • Or me - sorry doing this on iPad and the default nicks are reversed from desktop.

      Sentiment: Buy