American Airlines Group (AAL – Analyst Report) reported higher-than-expected earnings in the second quarter of 2015. The company recorded adjusted earnings per share of $2.62, beating the Zacks Consensus Estimate by 3 cents.

The earnings beat pleased the investors, resulting in shares of the company gaining value in pre-market trading.

American Airlines Group Inc. – Earnings Surprise | FindTheBest

Share American Airlines Group reported operating revenues of $10.83 billion in the second quarter, representing a 4.6% decrease over the comparable figure in the year-ago period. Quarterly revenues were lower than the Zacks Consensus Estimate of $10.93 billion.

Consolidated passenger revenue per available seat miles (PRASM) declined 6.9% to 13.57 cents in the reported quarter. Consolidated passenger yield declined 6.1% to 16.28 cents. Consolidated load factor (% of seats filled by passengers) declined to 83.3% from the comparable year-ago figure of 84%. Load factor declined 70 basis points (bps) domestically and 120 bps on the international front.

American Airlines' results in the reported quarter benefited from low fuel costs. This is because fuel costs account for a major chunk of an airline's operating expenses. Total operating expenses declined 10.5% to $8.9 billion on the back of a 36.9% reduction in fuel costs.

The company looks to return more to shareholders through dividends and share repurchases. During the second quarter, the company bought back shares worth in excess of $750 million and declared quarterly dividend of 10 cents per share. The dividend will be paid on Aug 24, 2015, to shareholders of record as of Aug 10.

Moreover, the board of directors has authorized an additional $2 billion share buyback program. We are impressed by the company's efforts to reward shareholders consistently through stock repurchases and dividend payments.

Upcoming Release

JetBlue Airways (JBLU – Analyst Report) will release its second quarter earnings numbers on Jul 28, 2015.